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Apple Fitness+ Disrupts Canadian Fitness Industry

By
Lee Rivett
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Apple Fitness+ Suite. Photo: Apple
Apple Fitness+ Suite. Photo: Apple

Prior to the COVID-19 pandemic, the Canadian fitness market place was becoming saturated amid competition for a slice of the Canadian fitness segment. COVID-19 chased Canadians into lockdowns and quarantines causing havoc on many levels, including affecting fitness routines from coast-to-coast. Some Canadians turned to eating their way through the pandemic but home fitness equipment sales skyrocketed.

Retail Insider reported in September 2020 on how gym memberships and attendance plummeted in Canada. Some fitness chains tried to pivot into online or virtual offerings like guided workouts or interactive Zoom-like sessions. December 2020 wrapped with an unpleasant gift to struggling fitness businesses as Apple launched its ‘Apple Fitness+‘ service which promises to disrupt the Canadian fitness industry.

Apple Fitness+ is an online platform that requires an Apple Watch to participate and provides guided workouts for treadmills, rowers, yoga enthusiasts, dance, core, strength, high intensity interval training (HIIT), cycling, and more.

Apple Fitness+ Workouts. Photo: Apple

Apple Fitness+ Reinventing Canadian Fitness Industry?

For our “type A” readers in the crowd, the simplest and quickest example of Apple Fitness+ disrupting the fitness industry can be summed up in the following consumer-focused example, based on using Apple Fitness+ since it launched on December 14, 2020:

  • Pre-Pandemic: Unlimited OrangeTheory Membership was $189 per month per person. 20 minutes to drive each direction to get to studio. 450 calories burnt during a 45 minute guided HIIT workout.
  • Apple Fitness+: Unlimited workouts (HIIT, rowing, strength, yoga, etc.) for $12.99 per month for a family up to five. 650 calories burnt in my basement home gym during 45 minute workout (broken down by a 20 minute HIIT, 20 minute jog on treadmill and a 5 minute mindful/guided cool down).

Based on price, Orange Theory cost $378 per month for a couple plus an hour of driving time (gas costs, parking, etc.) versus Apple Fitness+ cost of $12.99 per month for a couple.

Based on effectiveness, an OrangeTheory 45 minute workout burnt 450 calories on average for me. Apple Fitness+ burnt 650 calories in 45 minutes based on the workouts which were selected.

Based on time usage, OrangeTheory required a 40-60 minute commute to get to and from. Apple Fitness+ is in-home and it can be done anywhere (in a hotel, at home, in a fitness gym).

Apple Fitness+ is the clear winner based on price, effectiveness and time-usage which garners it the title of being a fitness industry disrupter. Even at launch, the variety alone is also an asset for the service.

Apple Fitness+ Classes. Photo: Apple
Apple Fitness+ Price Plans. Photo: Apple

Price Point

The monthly fee for Apple Fitness+ varies from country to country, but the Canadian monthly fee is $12.99 per month and this give us up to five family members access. It is also available through the Apple One premier bundle which give a family access to Apple Fitness+, Apple Music, Apple TV+, Apple Arcade, Apple News+ and 2TB of iCloud storage.

In contrast, unlimited Orange Theory in-studio workouts were $189 monthly per person. During the pandemic with shutdowns, OrangeTheory has launched an unlimited OTLive offering for $129.99 monthly per person. OTLive are Zoom-like OrangeTheory classes focused on floor workouts where live coaching in a group (limited number of participants). You still need to provide your own equipment for weights and benches. All interactions with a coach through a chat and camera interface while lunging, planking, side-to-siding and various other workouts.

$378 per month for a couple for OrangeTheory in-studio or $260 for OTLive Zoom-like classes versus $12.99 per month for a couple using unlimited Apple Fitness+ isn’t fairing well for the future of OrangeTheory.

Apple One Premier Bundle. Photo: Apple

The Apple Advantage

The first iteration of the Apple Watch came to the market in 2015 and it has progressed with a new version every year with a focus on fitness and health. “Apple Watch owns half the worldwide smartwatch market and remains the clear industry leader” said Neil Mawston, Executive Director at Strategy Analytics in a press release. “Apple Watch shipped 7.6 million units worldwide in Q1 2020, rising an above-average 23 percent from 6.2 million in Q1 2019. Apple’s global smartwatch market share has grown from 54 percent to 55 percent, its highest level for two years” said Mawston.

The Canadian fitness industry has cast a wide net to cater to every possible path to the Canadian fitness dollar imaginable, from the value-priced chains (like Fit4less and Planet Fitness) to the luxury market (like Equinox) to group fitness (like Crossfit, Orange Theory, F45 Fitness and Barry’s Bootcamp) to virtual/remote fitness (like Peloton).

  • Value Priced chains: The appeal is the price. Fit4Less is $10.49 biweekly (or $21 monthly) for 24 hour access to a fitness facility with various amenities, like sun tanning booths, aqua massage equipment, etc.
  • Luxury Market: The appeal is prestige and exclusivity. Towel services, group fitness classes, etc. to turn the gym experience into a destination experience.
  • Group fitness: The appeal is working out with others to achieve a balance between cost and staying motivated by working out with a community.
  • Virtual fitness: The appeal is convenience and it usually comes at a cost. Peloton locks in users by having them purchase the proprietary bike or treadmill (yes, there are many hacks on Youtube to get a knock-off equivalent).

Looking across the four markets, Apple is coming in at $12.99 per month (sorry value chains) with exclusivity for Apple Watch users (sorry luxury market) where you can work out with the trainers (sorry group fitness) in a virtual environment (sorry virtual fitness market).

Apple Fitness+ Suite. Photo: Apple

Apple Fitness+ Disadvantage

After all the disruption review, Apple requires users to own an Apple Watch to use Apple Fitness+ service. This likely will not go over well in the Android market but Apple has had six years of developing the typical Apple cult following for the Apple Watches, including coming out with a more economical Apple Watch SE version this year.

Next Steps for the Canadian Fitness Industry

Returning to the Canadian fitness industry view, the various fitness business models being used by the Canadian fitness titans like Orange Theory, Fit4Less and other facilities took a front-facing hit from Apple with the launch of Apple Fitness+ due to price, convenience and effectiveness. Most Canadian fitness retailers have been expanding aggressively pre-pandemic, including Orange Theory’s expansion, Barry’s Bootcamp expansion and Soul Cycle’s expansions featured in Retail Insider.

Many will try to rest on the ‘fitness community’ they build; however, anyone who knows the Apple cult culture knows that isn’t going to sustain their business models. Technology has played a role in Peloton as well as boutiques like F45 and Orange Theory which gives these titans experience on getting ahead of Apple but do they have the research and development abilities of Apple?

Aside from the #ShopLocal and #SupportLocal movements, the Canadian fitness industry is likely revising their business models as they speak. As Apple revolutionized the mobile phone market with the iPhone and the music consuming market with Apple Music, we are about to see some new developments in the Canadian fitness market in 2021 as entrepreneurs get their juices flowing to attempt to pivot and thrive with the new normal of Apple Fitness+.

Let us know if you would like to hear more about fitness products by Retail Insider. Sound off in the comments below.

Montreal Design Marketplace SOUK Goes Digital for the 1st Time

By
Jessica Finch
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Interior of SOUK Habitat showcasing the participating designers. Photo: Alex Lesage
Interior of SOUK Habitat showcasing the participating designers. Photo: Alex Lesage

This year, in response to the COVID-19 pandemic, the 17th edition of SOUK, an annual design marketplace showcasing the creative works of Montreal’s finest designers and makers has gone digital. The popular Montreal-based event has been transformed into a global virtual marketplace running from November 17th to December 17th, 2020, and brought to life with a new year-long physical design space hosted in the iconic 1 Place Ville Marie in the heart of downtown Montreal.

Azamit
SOUK Founder, Azamit. Photo: Alexis GR

Thanks to its close partnership with global Montreal-based cloud commerce leader, Lightspeed, SOUK has been able to launch a fully-integrated digital platform to provide its virtual attendees with the same engagement and immersive environment previously enjoyed by its in-person customers. Credited for putting Quebec’s design scene on the global map, the annual design exhibition, founded by Creative Director & Curator Azamit, is known for its promise of pivotal and enriching conversations about local Montreal designers.

“We wish to educate people about local artists and designers. That has always been SOUK’s main goal. Now with our partnership with Lightspeed we are able to show others how to innovate in the face of COVID-19.”

Launched in 2003, SOUK has traditionally been a five-day event featuring 60-150 local Montreal artists and designers. The pre-COVID SOUK usually saw approximately 16,000 attendees each year. Renowned as the city’s much-awaited yearly eclectic gathering where connections are made and stories are told, SOUK is indispensable to Montreal’s creative scene.

“From a design point of view, we are highly-selective. In order to participate in SOUK we ask each designer to propose a piece that will be exclusive to SOUK. We try to ensure that most of our products are eco-friendly and locally-sourced — we ensure to highlight those that are on our website.”

In addition to the launch of the 17th addition, SOUK unveiled an online shop on November 17th,  showcasing the 2020 jury-selected products and exclusive collections. And in keeping with previous SOUK events, the online platform offers singular and attractive content to highlight the participant designers and their products. SOUK’s eCommerce presence allows for a wider audience outreach and engagement, while also providing the participating designers with an omnichannel retail experience — a route becoming increasingly crucial for small and medium-sized brands to take if they want to survive in 2021.

COVID-19 was the catalyst for SOUK’s entire virtualization, however Azamit says that the eCommerce route was high on her priority list prior to the pandemic experienced this year. “I knew having an online presence was going to be very important going forward and our partnership with Lightspeed actually started last year. However, it was impossible to know then the significance it would have going forward.”

Azamit added, “we are proud of the voice SOUK gives our featured designers. We also believe that SOUK reminds people of the value and necessity of shopping local now and into the future. All of our products come from local designers”.

To add to the month-long virtual event, SOUK has launched SOUK Habitat — a fully-immersive shoppable apartment, designed within Place Ville Marie and curated with SOUK products, all of which can be purchased on the spot through its partnership with Lightspeed. Built to represent the soul behind SOUK, which is the city of Montreal and its creatives , SOUK Habitat encompasses the full workings of an actual apartment, with a bedroom, a living room, a kitchen, and a home-office, a dining room, a walk-in, and a kids room, giving customers the opportunity to familiarize themselves with the pieces before any potential purchases. Housed on the 20th floor of the iconic 1 Place Ville Marie building in the heart of downtown Montreal, SOUK Habitat will offer a scenic view of famous monuments and landmarks of the city. SOUK Habitat is open all year long and is available by appointment only. To learn more or to make an appointment visit soukmtl.com/en/habitat/.

In lieu of the traditional setup, SOUK has availed Booxi — a cloud-based appointment management platform for small to midsize businesses — to ensure that customers still have the ability to make appointments and meet with the participating designers. “SOUK is all about creating an immersive experience. We were adamant not to lose that this year despite what’s happening around us.”

To learn more, visit soukmtl.com/en/edition/edition-2020/

The Future of the Retail Footprint in Canada Amidst the Accelerating Shift to Digital from Stores: Expert Q&A

By
Retail Insider
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Farla Efros & Anthony Karabus
Farla Efros & Anthony Karabus

Retail Insider interviewed HRC Advisory’s leaders, Antony Karabus, CEO, and Farla Efros, President, to get their perspective on the situation facing the retail industry. The purpose of this interview was to get the perspective of experienced Retail Experts on the future of retail including addressing one of the most crucial questions – finding the right balance of brick and mortar stores and e-commerce.

Before starting the formal Q&A, Karabus and Efros said that they wanted to express their strong view that consumers love shopping in brick and mortar stores and that the future of retail will always include a meaningful brick and mortar presence. However the reality is that retail in many categories (other than food and certain other categories such as home improvement) are heading slowly but surely towards a world of “50:50”, where 50% of retailers’ sales will be digital or digitally-driven and 50% will originate in brick and mortar. HRC Advisory advises retailers to not plan incrementally on this issue and to develop a business model that reflects an outsize investment in scaling and expanding digital and omni-channel capabilities to be able to enable this transformation, while revamping their lease portfolio to increase occupancy cost flexibility that allows them to gradually exit or repurpose marginal and under-performing stores and locations that don’t have a clearly-defined future ( for example, locations where the main anchors have or are likely to be departing—these locations will likely decline over time).

The following is the Q&A interview:

Retail Insider: There is much being said about the so-called retail apocalypse. What do you think is really going on?

HRC Advisory: We feel very strongly that there is no retail apocalypse. If the health of the retail sector is judged by the number of CCAA and liquidation announcements since 2019 and the off-again, on-again restrictions dictated by governments, some are predicting that retail is facing an apocalypse. But we at HRC Retail Advisory believe that the reality is far more nuanced.

The bar for successful performance has been raised since the onset of the digital era, coupled with the arrival of the pandemic which has lasted longer than any of us expected. Significant opportunities exist for retailers that are committed to deal with the most pressing challenges and opportunities for fundamental transformation. While there are many retailers whose business models are under siege – some of them will either not be with us in a year or two and others will survive in a smaller and very different form – there will be many winners – those that evolve to become the destination and authority for target customers in their category.

RI: Is the consumer still spending and what is the health of the consumer?

HRC: Consumer spending remains strong. Consumers are still shopping, but their habits and choices have changed significantly since March of 2020. Higher-income and high net-worth consumers have for the most part not been negatively impacted by the pandemic ( in fact the media reported this week that Canadian billionaries have significantly increased their net worth since the start of the pandemic) and are shifting considerable spending from dining-out, entertainment-related categories and travel towards spending on their homes and backyards, cooking at home, pets and exercise, both outdoor and at home. Those categories that are the recipient of spending shifts are experiencing significant growth while the others are really challenged. The pandemic has unfortunately exposed the fault-lines of asymmetrical consumer strength. The medium and lower-income consumers are focusing on spending on essentials which is leading to growth in discount, dollar stores and club retail, while the higher net worth consumers are doing at least as well as they were previously and many are doing much better.

RI: Can we discuss the impact of the pandemic on different kinds of retail real estate?

HRC: That’s an excellent question as there is no doubt that retail real estate will experience a secular shift. Mall foot traffic has continued its steady multi-year decline and this trend will continue for a long time to come. Obviosuly this has been sharply accelerated since the start of the pandemic. The shift of sales from physical stores to digital has accelerated sharply and while we see the continued acceleration abating somewhat after a successful vaccine and herd immunity, we do see the increased importance of digital to be a long-term reality and we see the transition to a 50: 50 environment as happening much faster than anyone could have anticipated ( 50% digital and 50% in physical stores). Without a doubt, consumers are being more careful and many are avoiding crowded environments with direct exposure to outside entrances. We are concerned about underground shopping, enclosed malls, crowded department stores especially in downtown cities. However, we believe that street retail, strip malls, power centers, big box and mass retail, and any other retailers whose stores are open directly to the outside and are best positioned for curbside and BOPIS will be happy recipients of the sales shift. While we see a good long-term future for the top-notch malls such as Pacific Centre, Yorkdale, Toronto Eaton Centre, Chinook Mall, West Edmonton Mall, Square One, and a few others, we expect that numerous suburban malls in Canada will need to transform their properties by adding densification projects such as condo buildings on the parking lots and other lifestyle and mixed-use amenities and stronger and more direct access to public transportation hubs.

RI: What should retailers do to fortify themselves for the new retail future?

HRC: This is a complex answer but the first question is to ensure where possible that retailers are able to participate to the extent possible in essential categories and those categories that are now more important than ever before. For example, tailored clothing will improve after the pandemic but we believe casual, lounge-wear and athleisure will become a much more important component of clothing purchases. Retailers must fortify their digital and omni-channel capabilities and capacity, as well as their inventory management and assortment planning processes and systems. Lastly, if one believes the hypothesis that retail will be a 50:50 split in time and that an increased percent of total retail sales will be made in essential retailers who sell both essential and non-essential categories, then the discretionary retailers need to take a hard look at their store fleets – how many stores, where they are situated, what occupancy costs they can afford and which stores can double as digital fulfilment operations as well as serve walk-in customers.

Antony Karabus and Farla Efros are CEO and President of HRC Advisory respectively. HRC Advisory is Canada’s leading retail consulting firm that has assisted more than 150 national retail chains to adapt their economic operating model and key processes in order to compete more profitably and effectively. Visit www.hrcadvisory.com for more information as to how HRC can assist your company in this unprecedented time.

Read More Retail Insider Interviews:

COVID Crisis Driving Need for Digital Retail Acceleration and Deeper Customer Engagement: Study

By
Sean Tarry
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Vala Afshar, Photo: Forbes

Long gone are the days when a great, even exceptional, in-store experience was enough to satisfy the consumer and keep them coming back. If it remained a notion for brands before the impacts of COVID-19 began to take hold, it has surely been blown up since. Restrictions associated with the pandemic, on both consumers and businesses alike, have transformed the lives of people all over the world, changing the way we interact and operate in this new crisis-laden environment. As a result, consumers are expecting retailers to respond to these transformations in order to assuage the challenges they face and meet their increasing demand for personalization and convenience.

A recently released report conducted by Salesforce – the fourth edition of its State of the Connected Customer – finds that 90 percent of Canadian customers believe that the way a company acts during a crisis demonstrates its trustworthiness. And, according to Vala Afshar, Salesforce’s Chief Digital Evangelist, the opportunities available for retailers to reinforce or even elevate their value in the eyes of customers and secure their continued loyalty to the brand are plentiful and immense.

“What we’ve all experienced over the past nine months or so is truly unprecedented,” he says. “The impacts of the pandemic have set in motion a titanic shift concerning the way we do things right across the board. One of the most profound changes is in the country’s workforce. In March, only 9 percent of the workforce in Canada was working remotely. Just 30 days later, that number increased to 60 percent. It resulted in more than 5 million people immediately shifting to a decentralized, digital-only construct. It’s fundamentally altered the way we communicate with one another, as well as the way we want to be communicated to by businesses and brands. What it’s resulted in is a consumer who wants to engage with their favourite brands in different ways than they have in the past, and they want those brands to respond accordingly. It provides retailers with massive opportunities to listen to their customers and innovate to meet their demands.”

Digital Acceleration

One of the areas in which today’s consumer is demanding innovation from retailers, according to the Salesforce report, is with respect to their digital capabilities and offering. The study reveals that 89 percent of Canadians expect companies to accelerate digital initiatives. Further, it also indicates that it’s a digital shift that is likely going to be long-lasting, with 66 percent of respondents admitting that COVID-19 has elevated their expectations of digital capabilities. Combining these responses with the fact that an estimated 53 percent of their interactions with businesses will take place online this coming year leaves little doubt that the ways in which retailers choose to address these attitudes and intentions will directly influence their appeal among consumers during the months and years ahead.

“We’ve seen tremendous growth in e-commerce adoption over the past several months,” asserts Afshar. “It’s part of a digital shift that’s been happening over the last number of years. But, with the obvious forcing function that the pandemic’s presented, these attitudes and behaviours have been significantly quickened. As a result, the ways in which today’s connected customer wants to engage with businesses has transformed. It’s disrupting all of the norms and forcing businesses everywhere to rethink the ways they communicate with their customers, both existing and prospective, at every touchpoint.”

Evolving Methods of Engagement

The dramatic change is highlighted in the fact that 57 percent of those participating in the study say that the way they interact with businesses has evolved throughout the past year. Some of their new expectations of businesses include the introduction of alternative ways to receive existing products and services, such as providing digital versions of traditionally in-person experiences (69 percent), and an expansion of the customer engagement methods they deploy (54 percent). They are expectations that are challenging businesses to innovate. And, as Afshar explains, they are expectations that will provide all businesses with a platform for differentiation, as well as a moment of truth in which trust in brands will either be forged, or not.

“Throughout all of the change that we’ve undergone in 2020, one thing remains very clear,” he says. “The experience that a brand provides for its customers still serves as a significant way for them to separate their offering from competitors. As part of that experience, businesses need to develop and execute on an omnichannel engagement strategy that takes into account the customers’ preferences and the multitude of channels on which they interact. If done properly, businesses will nurture a true understanding of their customers’ needs and drive an experience of value and convenience that services their uniquely evolving needs and engenders within them a trust and support for the brand.”

Understanding and Empathy

During this most difficult time when everyone across the globe is attempting to navigate through the challenges and evolving circumstances presented by the spread of COVID-19, a business’ recognition of the needs and preferences of today’s consumer is perhaps more important than ever. According to Salesforce’s report, 66 percent of customers expect companies to understand their unique needs and expectations. And 68 percent expect brands to demonstrate empathy as a result of their understanding. The sentiment offers retailers that can realize it a tremendous opportunity to strengthen relationships with customers and bolster the image of the brand.

It all represents a need for businesses to continue cultivating deeper connections with consumers, appealing to their heightened needs to make their lives easier and less cluttered. And it seems that the customers’ desire for businesses to display empathy is also parlaying into an expectation for brands to continue improving their corporate and societal values as well. According to the report, factors including a brands’ treatment of employees and customers during the pandemic crisis, environmental practices, actions on racial and economic injustices, and community involvement are all considerations made by consumers when making a purchase decision. In addition, 56 percent of customers have re-evaluated the societal role of companies this year, with a significant 71 percent stating to be paying more attention to companies’ values than they did a year ago.

“The impacts of COVID have resulted in highlighting the responsibility of companies everywhere,” he says. “Customers want to see that the brands they shop at are making the right decisions with respect to the hiring of workforces that more accurately reflect the communities they serve, the ethical use of technology, advocating for human and civil rights, and the implementation of more environmentally-friendly and sustainable practices. Today, Canadian consumers are demanding that brands demonstrate their values with 85 percent stating that they believe the societal role of companies is changing. For those brands that are truly dedicated to making improvements in these areas and invest the resources to do so, the rewards for their efforts could be immeasurable.”

The Future of Retail

“The pandemic has impacted and disrupted every facet of the customers’ daily lives. The colossal shift it has caused requires businesses to adapt and transform the way they do things, not only to remain competitive, but in some instances to survive. The ways in which brands respond to these changes and the concerted efforts that they make toward enhancing their digital capabilities and increasing their accessibility to customers across all touchpoints will not only prove to be critical to their success, but will also help shape the future of retail in Canada.”

All told, the report helps weave a narrative surrounding the attitudes and preferences of today’s connected customer and their collective desire for businesses to elevate their operations and practices to better serve their needs. It represents a tall order for brands looking to meet these expectations. But, as Afshar points out, it’s quickly becoming an imperative for them to do so in order to continue growing and attracting the interest of engaged and loyal shoppers.

Canada’s Main Streets and Small Businesses Face Uncertainty with Declining Foot Traffic

By
Mario Toneguzzi
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Flatiron Pub on a quiet Front Street East in Toronto. Photo: Dustin Fuhs
Flatiron Pub on a quiet Front Street East in Toronto. Photo: Dustin Fuhs

Canada’s main streets and small businesses face extreme uncertainty with foot traffic down substantially due to the COVID-19 pandemic.

A new research study, which examined seven of Canada’s main streets, found that foot traffic on main streets has plunged since September with visits down 35 to 70 percent compared to the same time last year and 58 percent of businesses operating with reduced revenues – often less than half of pre-COVID levels.

The research was done by Vancity, Vancity Community Investment Bank (VCIB), and the Canadian Urban Institute.

“Right across the country small businesses are struggling. And if we let them fail, the whole country will be poorer for it. Local businesses form the backbone of the Canadian economy and they have shown determination and resilience during the pandemic. Given the extraordinary measures and investment they have made to continue operating, they are now counting on us to get behind them,” said Christine Bergeron, Interim President and CEO, Vancity, a values-based financial co-operative serving the needs of its more than 543,000 member-owners and their communities, with offices and 60 branches located in Metro Vancouver, the Fraser Valley, Victoria, Squamish, and Alert Bay. It has $28.2 billion in assets plus assets under administration and is Canada’s largest community credit union.

Christine Bergeron, Interim President and CEO, Vancity

Survey Focused on British Columbia & Ontario

The survey looked at blocks in the following neighbourhoods in Ontario and British Columbia: The Beaches in Toronto; Surrey-Newton, BC; Downtown Hamilton; Wexford Heights, Toronto; Downtown Victoria; Strathcona-Vancouver; and the North Shore in Kamloops.

Bergeron said the first round of research showed that small businesses connected to community were doing better. That’s still the base but the foot traffic drop has been so large that they really need that stay local community to take their shopping online because it’s hard to make up for that drop.

“When we did ask what is most helpful to you as a small business, of course we expected perhaps grant programs would be the top but actually what they really want is to see people shop local and to see whether there are any programs that government could help introduce incentives to really drive that local shopping behaviour,” she said.

Key findings from the study include:

  • Downtown Victoria saw almost a million fewer visits from April to September compared to the same time last year. In The Beaches neighbourhood in Toronto, there were 550,000 fewer visits and on the North Shore in Kamloops, a community in the BC Interior, there were 140,000 fewer visits;
  • Business owners in downtown blocks report an exponential increase in vandalism, including graffiti and broken windows, that they fear is keeping local residents off the main street. In Victoria and Strathcona in BC, 77 percent and 67 percent of businesses respectively, said their biggest challenge is increased safety issues in the neighbourhood;
  • More than 25 percent of businesses say that selling more online and through delivery applications have positively affected their business. And while these services have become a significant source of revenue for restaurants, the high commission rates charged by mainstream meal delivery services continues to put a strain on profits;
  • Encouraging local shopping was the most widely cited example of a meaningful support business owners wanted from government (57 percent). It was more popular than creating a more competitive tax environment (40 percent) or better access to financing (20 percent) as the most important thing governments and other main street advocates should do to support them going forward;
  • Over 60 percent of businesses have built an online presence, but the overall loss in visitors – which averaged just below 500,000 for a small two-block segment of a main street – will be difficult to make up for, particularly as public health restrictions are being tightened at the very moment when the holiday shopping season is starting; and
  • There is a growing presence of REITS and large investment companies on main streets, which tend to be less invested in the well-being of businesses and local neighbourhoods.
Mary W. Rowe, President and CEO at The Canadian Urban Institute

“This is a crucial time for our main street businesses. Community members can continue to support their local shops, especially throughout the holiday season. These businesses also need support from all levels of government. The stories, data, and insights from these block studies guide policymakers to implement measures to help main street businesses weather these challenging times. Consumers and government must step in right now and take action to bring back our main streets – the heart of Canadian communities,” said Mary Rowe, President and CEO, Canadian Urban Institute.

“It’s clear from this study that Canada’s small businesses need our support more now than ever before, and there are simple steps we can all take to help out, such as shopping local. By investing in our small businesses now we will be futureproofing our economy in the long run, helping our business owners stay resilient to the impacts of the pandemic,” said Jay Ann Gilfoy, CEO, Vancity Community Investment Bank (VCIB).

Bergeron said people are craving social interaction and want to see their local community thriving.

“The main feedback from this research and what we’re seeing is just really thinking about how to ensure as many people are buying local whenever possible and hope that gets them (businesses) through,” she said.

“We’re on the cusp of a vaccine. There is some light at that end of the tunnel. How do we think about new programs and new initiatives along with getting as many people in supporting these local shops as possible?”

The full research study can be found online here.

Online Resale Marketplace StockX Reports Record-Breaking Cyber Weekend

By
Sean Tarry
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StockX store interior. Photo: StockX
StockX store interior. Photo: StockX

The online resale market is booming. Represented by one of the fastest growing consumer segments, one whose collective tastes and preferences are epitomized by a penchant for exclusive, hard-to-find, limited-run products, the space is rife with opportunities for those within the industry that are savvy enough to develop an offering that satisfies their unique interests. Combining the growth of the segment with the current pandemic-induced acceleration of e-commerce activity around the globe has resulted in increased demand within the category and a plentiful bounty available for merchants that can meet it.

It might help explain why StockX, the global leader in the online secondary resale market, experienced a record-breaking Cyber Weekend. That and, according to Scott Cutler, StockX CEO, the enthusiasm shown by StockX buyers, sellers and frontline employees.

“As in-person shopping has become increasingly difficult this year, consumers have turned to online retailers like StockX to meet their needs,” he says. “Despite lockdowns that continue around the world, our platform has remained open, stable and strong. Thanks to the diversity and liquidity of our global marketplace and the incredible work of our frontline team members, we’ve managed to continue growing at an incredible rate during this time. Our recent Cyber Weekend performance is the most recent indication of our growth.”

Record-Breaking Growth

Scott Cutler (LinkedIn)

The company, headquartered in Detroit and operating multiple authentication and distribution centres throughout North America and Europe, including one in Toronto, specializes in facilitating the resale of authentic product across categories that include sneakers, apparel, electronics, accessories, and collectibles. Its powerful platform connects buyers and sellers of high-demand consumer goods from brands that include Jordan Brand, adidas, Nike, Supreme, BAPE, Off-White, Louis Vuitton, Gucci, and many others. Leveraging dynamic stock market pricing mechanics, StockX provides its users with unparalleled access and transparency powered by real-time data that empowers buyers and sellers to determine and transact based on fair market value.

It’s an approach that users of the site seem to trust and appreciate. And it’s also one that’s reaping benefits for the online marketplace which recently surpassed $2.5 billion in lifetime gross merchandise value. It’s an incredible achievement for an operation that hasn’t even celebrated four years of business. And it seems as though the wave of growth StockX is experiencing has yet to crest, averaging a record 25 million monthly global visitors to its website during its third quarter, and recently wrapping up an astonishing Cyber Weekend, with a 100 per cent increase in average daily gross merchandise value during the four-day period compared to Cyber Weekend 2019.

An Ever-Expanding Segment

The astounding success, which included ten million visitors to the StockX site between Friday, November 27 and Monday, November 30, is significant for the burgeoning company. But what’s more is the fact that nearly 100,000 of those visitors were new buyers transacting on StockX for the very first time. It represents a manifestation of the ever-increasing opportunities that exist within the space. And, as Cutler points out, it’s also representative of a continued shift in consumer behaviour, one that is benefitting the company exponentially.

“Resale is a rapidly expanding segment of the market,” he asserts. “As consumer preferences shift, people in Canada and around the world are increasingly choosing to shop on secondary platforms. While the global shift in consumer behavior is undoubtedly linked to Gen Z, we’re also seeing a halo effect on older generations. This growing group of next gen consumers, who seek limited-edition products over fast fashion and demand unparalleled access and complete transparency from brands, are helping to rewrite the rules of commerce.

While change is afoot for traditional retail, StockX is one of the companies that is uniquely positioned to meet the needs of a consumer that is ever-evolving.”

Breadth of Product

In addition to the impressive sales posted by the company over the recent Cyber Weekend, the breadth of product sought by its visitors located in all corners of the world is another clear indication of the expansion of the segment that continues unabated. Over the four-day shopping event, more than 20,000 different types of product were sold through StockX to buyers from more than 140 different countries.

Among the top selling products, there were lots of sneakers – the first product category offered by the company when it originated in 2017 – including the Air Jordan 4 Retro Fire Red 2020, Air Jordan 1 Retro High Black Metallic Gold 2020 and the adidas Yeezy 500 Utility Black, among an array of others. Next-gen gaming consoles were another big hit with visitors looking to scoop up the recently released Microsoft Xbox Series X and Sony PlayStation 5 Blu Ray Edition consoles just before the holidays.

The company estimates that more than one of these consoles were sold every minute on the site.

Apace With the Consumer

Experiencing such rapid growth since its inception, the pace that the leader in the online resale space has set for itself is extraordinary. But, according to Cutler, it’s a pace that’s required in order to keep up with the ever-expanding and evolving segment of willing and enthusiastic customers that it serves. And if the company can continue to do that – to satisfy the unique needs, tastes and preferences of its visitors – he believes that there remains untapped potential for StockX to grow its operation even further.

“The resale market, and the StockX platform, are growing faster than ever before, and we’re very optimistic about the future. Right now, we’re hyper-focused on global growth and category expansion while we continue to strengthen the core of our business and introduce StockX to new consumers. As we plan for 2021 and beyond, ensuring we scale the platform in a way that authentically connects with customers across the globe remains paramount.”

Q&A Interview with Jest Dempsey Sidloski, VP of Marketing, Customer Experience & eCommerce at Peavey Mart

By
Retail Insider
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Avenue Code Spotlight Series - Jest Dempsey Sidloski

By Avenue Code

Jest Dempsey Sidloski, VP of Marketing, Customer Experience & eCommerce at Peavey Industries LP/Peavey Mart, discusses how his company is emphasizing community care as it adapts to COVID-19 and merges its brands. The interview was conducted by Avenue Code.

Avenue Code: Tell us about your personal career path. How did you get to where you are today?

Jest Dempsey Sidloski: I started working at Peavey Mart during high school, which means I’ve spent more than half of my life working for Peavey Industries LP. Interestingly, I went to college for Emergency Medical Services but accepted an invitation to join Peavey’s Manager trainee program during the recession of 2008. At 21, I had 16 staff members and was running a multi-million dollar a year store. I successfully grew sales, improved employee culture, and was able to help impact my community with my team’s support. I was then promoted into the Home Office as the company’s first corporate Training & Development Manager, where I created an LMS system, and developed a program for finding and training new talent within the company. I also accepted an interim role as District Manager for 10 stores, including our flagship home office store in Red Deer, Alberta. After this, I was promoted to Director of Customer Experience, where I helped define customer journey maps, improve customer experience, manage the complaints call center, and update customer-facing policies. From there, I was promoted to Director of Marketing, which incorporated our customer experience department. In 2020, I was promoted to Vice President of Marketing, Customer Experience in eCommerce. My current role includes flyer, eCommerce, social media, videography, magazines, community sponsorships, partnerships, branding & public relations, customer service, and call centres.

AC: What are you personally most passionate about in your career?

JS: A passion for client happiness, customer experience, and sales attracted me to retail initially. Today, my passion still starts and ends with good customer experience, whether for external customers (buyers) or internal customers (employees). I try to constantly improve experiences, systems, and software. As a former President of the Suicide Information Center, 100 Men, and The Women’s Outreach, I am very oriented toward charity and service. Peavey Industries allows me to exercise that same passion through company-sponsored philanthropic endeavors while still having time to focus on my family and home life.

AC: You’ve spoken of COVID-19 as a positive force for accelerated change. How have your digital initiatives related to eCommerce and marketing pivoted since COVID-19?

JS: We were one of the first retailers in Canada to pull our flyers from distribution to improve consumer safety. This led to an instant eCommerce growth strategy, which included adding more products and offers online as well as facilitating a seamless curbside pickup experience. We learned that our consumer was eager to explore our business digitally, which allowed us to put more time and energy into creating better workflows, tighter eCommerce timelines, and new rules to make it easier for customers to shop with us according to their preferences. When we felt it was safe, we re-introduced both traditional and digital flyers and launched a new, comprehensive digital strategy. We also launched an education portal for our consumers in just 2 weeks. This was in response to an incredible shift in consumer behavior and purchasing habits as people began growing their own food, raising animals, and enjoying nature in their own backyards. Connectedtotheland.info works with Canadians from coast to coast to develop educational blogs, live stream education, articles, how-to’s, and even a podcast that made it to #3 on the Canadian podcast charts under home and garden. This initiative fits within our marketing strategy, dubbed “doing retail different.”

AC: What are the most important factors in sustaining and growing retail and consumer brands through the pandemic?

JS: My keywords this year are transparency and integrity. These two words speak to everything we’ve done as an organization to sustain and grow through the pandemic. We didn’t have all the answers or all the experience customers were looking for at the onset of the pandemic. We had to transparently tell our customers what we could do today while letting them know what we were working on for tomorrow. We listened to feedback from our staff and our customers and were able to pivot and quickly react to expectations. This was extremely important in letting customers know how we planned to continue to support them and their essential needs. Transparency is at our core – we had daily updates from our president at the onset of the pandemic. With transparency came teamwork I’ve never seen before – we had constant meetings with department stakeholders from Human Resources, Health & Safety, Store Operations, and our supply chain to ensure we were all on the same page. That teamwork allowed marketing to address its aging website infrastructure and sign on to build a new website, which we hope to launch in March of 2021.

AC: Which strategies did Peavey Industries LP implement ahead of its larger competitors, and how was this possible?

JS: The pandemic was declared on March 11, 2020. On March 20, 2020 we launched and marketed our curbside pickup options. Later on we launched drive through pickup and payment options. Peavey Industries LP brands sell a significant amount of growing supplies, including soils for consumer gardens, and we were quickly able to implement a drive through, load up, and pay system for customers to purchase large quantities of these items without ever leaving their vehicles. This was made possible by technology like mobile payment systems.

Peavey Industries LP logos
Peavey Industries LP logos

AC: Peavey Industries LP is recognized for its strong internal culture and brand reputation. How has your leadership style adapted during COVID-19, and what remains constant?

JS: The pressure on every single one of our retail employees was incredible in 2020. From balancing consumer expectations to constantly changing rules to new consumer shopping patterns to trying to keep a smile on our faces, it’s safe to say everyone experienced new levels of stress. COVID-19 did one thing: it brought our culture even closer together. One of the greatest things a business can do is listen, both to its customers and to its employees. We ensured we heard as many voices as possible through the pandemic. While we faced criticism for certain decisions, we also received praise, and that led to ensuring we continued to be transparent with each other and with our employees and customers on what we were doing and why we felt it was best for everyone. During the pandemic, I had to throw the leadership books in the garbage, because they simply weren’t relevant. I had to ensure I was not only a manager, but also an ear of support. My employees were afraid, nervous, eager, and exhausted. So was I. My walls came down, and I had moments of utter joy and utter emotional exhaustion. Empathy remained consistent and should be at the forefront of any challenge. Very few people alive today have experienced a pandemic before, and it’s okay to not know how to feel, to be vulnerable and afraid. Empathy allowed us to react calmly, to do what we felt was best, and to admit when we failed. Through an empathy lens, anything is possible.

AC: Tell us about Peavey Industries LP’s decision to merge its brands this year. What opportunities are in store, what challenges are you facing, and how are you addressing those challenges?

JS: One thing COVID taught us early on was that if we were going to be disruptive, now was the time. Peavey Industries LP purchased TSC Stores in 2016 and operated with two major banners in Canada. Both brands shared a similar history: they both launched only one year apart in the 60’s, both were originally American-owned companies bought by Canadians, and both offered similar segments of consumer products. With our eCommerce growth in 2020, a consumer market share increase, and the merging of our systems and technology, we still had two separate major corporate brands. (We also have a regional MainStreet Hardware brand and a primarily dealer-owned ACE Canada brand.) For Peavey Mart and TSC Stores, it meant one team doing double the work. We had 2 flyer programs, 2 websites, 2 social media accounts for each platform, 2 brand stories, and 2 different logos. But that’s about all that separated the brands since the acquisition.

The company has spent the last 4 years aligning product selection, pricing, customer service, systems, and even rewards programs. So it made absolute sense to continue our path of positive distribution in the Canadian retail landscape and to rename our TSC Stores to Peavey Mart – a brand that has supported rural communities since 1967. With this change comes better marketing strategies, more philanthropic opportunities, better culture alignment, and, most importantly, we can proudly say we work for the same company that’s aligned to create a unique retail experience in Canada.

AC: What is the key to successful strategic partnerships?

JS: For me, it comes down to reputable engagement. Everything we do at Peavey Industries is based on being authentic, real, and transparent with our customers, suppliers, and employees. Successful strategic partnerships are based on alignment in these areas.

AC: How have both COVID-19 and your decision to merge brands driven changes related to in-store experiences?

JS: “We want our customers to love us” is a phrase we use in the executive group and with important strategic pillars in our company. From new policies to the way our consumers shop with us to our employee service training to rewards and promotional programs, we must always ask ourselves: will this make our customers love us? This opens a door to ensure we continue to listen with intention and heart and to make changes to do what people need us to do. We are a retailer, but that doesn’t mean we can’t also be a community builder and a proud Canadian partner trying to do things a little more personally.

AC: Thanks for your time today, Jest! It’s a pleasure to hear how Peavey Industries is caring for its community as it continues to adapt.

Alfredo Moro

Alfredo Moro is a Business Development Specialist at Avenue Code who is passionate about sales and loves to connect with clients all over the world! In his spare time, he enjoys watching the soccer games of his favourite team and cooking Brazilian BBQ in his backyard.   

Ontario Retail Shutdown Extension into January 2021 Will Cause Severe Harm to Industry: Experts

By
Mario Toneguzzi
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Shuttered Starbucks location on Toronto's Queen Street East. Photo: Dustin Fuhs
Shuttered Starbucks location on Toronto's Queen Street East. Photo: Dustin Fuhs

The Ontario government, in consultation with the Chief Medical Officer of Health, is extending all COVID-19 orders currently in force under the Reopening Ontario Act until January 20, 2021. 

The announcement came the same day (Thursday) that iconic Canadian retailer Hudson’s Bay issued a statement related to its application for a judicial review of the current regulations governing non-essential retail in Toronto and Peel.

Hudson’s Bay Calls for Judicial Review of Ontario COVID-19 Regulations

“The Ontario Government’s health data shows that retail shoppers are not contributing to COVID-19 spread in any significant way. On behalf of thousands of large and small retailers in Toronto and Peel, we have been left with no choice but to ask the Court to recognize the unfairness of the current situation and the need for a fair and evidence-based solution that puts health and safety first and doesn’t jeopardize the livelihoods of thousands of retail workers, or the future of many businesses,” said Hudson’s Bay.

“Last week we signed an open letter, along with 46 other retailers of various sizes, to advocate for a 25% capacity limit on all retailers across the province as a means to achieving better public health outcomes with less economic fallout and unfairness. The decision to close some retailers in these regions has not achieved public health objectives. Rather, it has potentially increased health risks by funnelling more shoppers into fewer, increasingly crowded stores. Public health evidence regarding the importance of physical spacing and other health measures supports doing the complete opposite.

“The Government’s approach is unreasonable and unfair, does not support our shared public health objectives and is causing undue stress and hardships to thousands of retail employees and businesses across the region. The situation is dire and untenable for thousands of retailers but it’s not too late for the Government to make a better decision for Ontario, the local economy, public health, and the millions of citizens who live or work in Toronto and Peel.”

In a statement, Solicitor General Sylvia Jones said safeguarding the health and well-being of Ontarians remains the government’s top priority at every stage of its COVID-19 response.

Bruce Winder
Bruce Winder

“As we prepare to implement a safe and effective immunization program, extending these orders will ensure tools remain in place to address urgent public health situations until all Ontarians can be vaccinated,” she said.

Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said overall this will have less of an impact as January is a slow retail month.

“Having said that, there are some retailers such as those that sell fitness equipment and gyms that count on January as a prime sales/recruitment month. We could see crowds though at essential retailers as customers return products that were bought for the holidays,” he said.  

“Those non-essential retailers that participate in Boxing Day and Boxing week activities will be disadvantaged as will restaurants that use New Year’s Eve as a major sales driver.”

Dan Kelly, President and CEO of the Canadian Federation of Independent Business, said the organization is supportive of the principle behind the Bay’s lawsuit.

“Our preferred outcome is different than theirs but the principle behind saying Costco and Walmart can open and yet retailers cannot we support what the Bay is saying,” added Kelly. “It makes no sense to prohibit buying clothing at the Bay or Susan’s Ladieswear but to allow it at Costco and at Walmart. So we support the principles behind the Bay’s lawsuit.”

Gary Newbury, a retail supply chain strategist and serial transformation executive, said the alleged court action being mounted by The Bay to the government will be watched by many retailers to see the quality of the argument and any potential success. 
“If they are successful, which is unlikely, there will be a class action which could bankrupt the province. It has been a concern, with various federal schemes to help retailers through this situation, this is simply not adequate with too many retailers having to dip into their own funds and pockets to weather this storm,” he said.

“When the state imposes closure, there has to be some logic, just as when you cause damage to a neighbour’s property, you create a path to be liable for all reasonable consequential losses. If we think of it this way, the government is using emergency powers to “flatten the curve” on the demand for ICU services. One could argue the state should, through it’ pandemic planning protocols in previous years, thave established the requirements, in absolute numbers, for ICU wards for pandemic management and had a fiscal plan over several years to ensure their provision. If the governments in Ontario have chosen not to do this, then the closures, surely could be argued under the tort of negligence in which case, there is a risk of a substantial class action, and other provinces will be watching this situation develop.”

Newbury said any closures which impact any time between Black Friday through to the conclusion of January sales, including Boxing Day sales, will be devastating for any independent or chain retailers, not deemed “essential”. 

Gary Newbury
Gary Newbury

“This is traditionally a very busy time for retailers, in a normal year they would plan to make 80-90 percent of their profit during this short window, and given most were locked down for two to three months during March – May, they would have been looking forward to getting a clear run to try and regain their cash flow during this time,” he said. “For those retailers who have moved their operations to a split of online and in store, they will find the costs of processing returns prohibitive if they have to close their stores, especially if they have been offering free returns via the store channel. All they might be able to negotiate is a longer returns deadline. The challenge with this is consumers may be worried they will not be around to get their money back and be engaging their credit card companies to reverse the transactions due to situations beyond their control.

“After the investment many retailers, especially the independents have made in being COVID-19 secure, they will feel severely let down by the Ontario government. The extra protocols have had to be funded out of their own scant cash flow, but it would have been done on the basis that “at least we can keep trading as we enter the holiday peak”. This extension to 20th January will force many to shut up shop permanently while their “essentially classified” competitors will be seen to gain a free pass to the party. Although COVID-19 is a real risk for community spread, the medium-term consequences to society’s view of public spaces is going to be transformed substantially. Anyone given to a degree of nostalgia will not be wanting to visit main streets, strip plazas and malls full of boarded up store fronts and tumbleweed, worsening the situation for those that struggle through this localized retailing apocalypse.”

Recently an open letter to Doug Ford, Premier of Ontario, and Christine Elliott, Deputy Premier of Ontario and Minister of Health said:

Dan Kelly
Dan Kelly

“Dear Premier Ford and Minister Elliott, about 47 retailers, including the Bay, wrote that “Ontario’s policy of segregating ‘non-essential’ retailers from those deemed essential might actually be making things worse” for the economic recovery.”

Current Policies Push Canadian Consumers Towards Big Box Retailers

The letter said the current policy pushes more Canadian consumers to a handful of big box retailers and discount stores, thousands of small, independent and local stores sit shuttered, with their hands tied, even though many sell the very same goods.

Canadian retail businesses are being destroyed and tens of thousands of jobs are being lost. This, despite the fact that only 0.2 percent to 0.9 percent of recent weekly cases related to outbreaks have been associated with retail environments, according to the Government of Ontario’s own statistics, said the letter which was dated December 1. 

It added that retailers of all sizes are being forced to lay off good people in hundreds of stores closed by an ineffective policy. Rather than hire thousands of temporary workers to handle the holiday rush, so-called non-essential retailers will hire zero. Once lost, many of these jobs won’t return.

“We ask that you move immediately to open all retail in Ontario, and impose a 25 percent capacity limit on ‘non-essential’ retail in lockdown regions, just as several other provinces have done, all with guidance and support from public health officials. This will put fewer people in more stores, increasing safety for all. The current policy does the opposite,” said the letter. “Together with mandatory mask policies, social distancing, hand sanitization and the numerous other safety measures already in place, capacity limits can further reduce the potential for community spread while enabling more businesses to stay open across all regions during a make-or-break season for retail businesses. 

“Large and small retailers need each other to create a vibrant retail ecosystem. Collectively, we are asking that you join with us in common cause and a shared commitment to keeping Ontario families safe and secure through this extraordinarily challenging period. Capacity restrictions backed by strong social distancing and other safety measures already in place will deliver better health outcomes in a way that is effective, fair, saves jobs and supports local businesses and families.

“On behalf of our respective companies, members and all of the various businesses and individuals that depend on the retail sector for their livelihoods, your thoughtful consideration and bold leadership on this matter will be greatly appreciated.”

In a news release, the Ontario government said the extension of all orders currently in force will support the safe delivery of health care and other critical services until COVID-19 vaccines are approved and widely available.

The government said amendments to the ROA, which came into force December 4, permit indoor farmer’s markets that primarily sell groceries, to be open. For post-secondary institutions, the amendments increase the limit on the number of persons permitted in an instructional space at any one time for in-person instruction or in-person exams from 10 to 50 people for certain programs critical to supporting the health care workforce as set out in the order.

The Gap to Close Bloor Street Flagship Store in Toronto in January 2021

By
Craig Patterson
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The Gap store on Toronto's Bloor Street. Photo: Craig Patterson
The Gap store on Toronto's Bloor Street. Photo: Craig Patterson

San Francisco-based fashion retailer The Gap will close its three-level store at 60 Bloor Street West in Toronto at the end of January 2021. The store has anchored the northeast corner of Bloor and Bay Streets since its opening in November of 1999.

A Gap spokesperson provided a statement to Retail Insider: “As part of our company strategy to adapt to the changing needs of our customer and growth of our online business,  we are looking thoughtfully at our real estate to support the best path forward. As a result, we are closing  a number of stores across the Gap Inc.  fleet, including our Gap brand store on Bloor Street at the end of January 2021. We remain committed to making appropriate and timely decisions on stores that  don’t fit our vision for the future of Gap Inc. We are confident these closures will help strengthen the health of our company moving forward.”

The Gap store spans three levels and almost 17,000 square feet. The street level spans more than 7,000 square feet and the second level is nearly the same size. A basement level adds nearly 2,800 square feet to the store. The store recently saw an exterior renovation as part of the overhaul of the 60 Bloor office tower that is owned by Morguard.

50-60 Bloor Street West ground floor lease plan. Image: Morguard
50-60 Bloor Street West ground floor lease plan. Image: Morguard

The corner of Bloor and Bay is considered to be prime property. Last year Birks CEO Jean-Chrisophe Bedos said that the intersection was the “best retail location in all of Canada” —that includes a Birks flagship store with an adjacent Van Cleef & Arpels boutique. For decades David’s Footwear occupied the northwest corner of the intersection at 66 Bloor St. W. until its bankruptcy last year, and Hakim Optical now occupies part of that space. A TD bank has occupied the southwest corner of the intersection at 77 Bloor Street West for decades.

The immediate area has seen some significant investments. Last year Manulife completed the overhaul of the commercial podium of the Manulife Centre at a cost of over $100 million that includes a new 50,000-square-foot Eataly location. Holt Renfrew, which is shut because of the pandemic, recently completed a renovation of its facade as well as the main floor luxury hall. Most of Cumberland Terrace, located to the north of the Gap will be demolished next year for a major redevelopment.

Gap 60 Bloor – Photo by Dustin Fuhs
Click for interactive Google Map of 60 Bloor Street

It’s Unclear What Will Replace The Gap Store After its 21-Year Run on Bloor Street

It’s unclear what might replace The Gap at 60 Bloor Street West. One rumour is that CIBC bank could look to occupy the corner, as CIBC’s street-level banking space at 2 Bloor Street West will eventually be incorporated into a larger redevelopment at that corner. A 3,800-square-foot retail space at 60 Bloor St. W. adjacent to Holt Renfrew is also for lease — despite being next to Holts’ street-level “world of” Saint Laurent boutique, the vacant 60 Bloor space may be difficult to lease given that it is not completely at grade.

This week it was also announced that The Gap’s three-level Chicago flagship store at 555 Michigan Avenue will also be closing in January. The Gap is reevaluating its real estate and is looking to close many of its stores in North America amid a strategy to operate out of strip malls and other rent-favourable retail locations.

Gap-owned Intermix at 130 Bloor Street West is also said to be closing in January of 2021, and The Gap has not yet confirmed this information. That space has already secured a new tenant with details to follow.

Bloor Street will struggle with vacancies in the coming months as some retailers have shuttered. Already, retailers J. Crew, Browns Shoes, Guerlain, Calvin Klein, Banana Republic, Mulberry, Michael Kors, Victorinox, MAC Cosmetics, and others have exited the street. Club Monaco at 153 Bloor St. W. and others will join it. At the same time, brokers say interest in leasing is picking up and negotiations for some spaces are ongoing.

Digital Transformation Required to Keep Canada’s Retail Afloat: Expert

By
Retail Insider
-
Go Digital Canada
Go Digital Canada

By Dr. Yu Ma, Associate Professor of Marketing and Bensadoun Faculty Scholar at McGill University

As the second wave of the COVID-19 pandemic sends Canadians ducking for cover, we are become increasingly aware of a grim reality: COVID is not going anywhere, at least until we have a vaccine.

Dr Yu Ma
Dr Yu Ma

While the Amazons and Costcos of the world have only increased their sales as consumers make their purchases online, Canada’s small businesses are struggling mightily to weather the storm. According to the Canadian Federation of Independent Businesses (CFIB)’s Small Business Recovery Dashboard, only 30 percent of Canada’s small businesses are currently hitting normal sales numbers. One in seven small businesses, particularly those in the arts, recreation, and hospitality sectors, are at risk of closing their doors permanently. In light of the fact that Canada’s small businesses comprise 98 percent of all businesses and employ 8.3 million people, it’s no wonder that the retail sector as a whole experienced significant challenges over the summer.

The Race to Digitize

With no end to the pandemic in sight, the most significant barrier that many Canadian businesses face is the urgent need for digital transformation. Businesses with an online presence and robust digital operations entered the pandemic with a distinct advantage. They are more efficient in that consumers can buy from them at any time or any place. They are more transparent as customers can easily track their products from the point of sale. They are also safer, allowing for transactions without any personal contact.

In May 2020, retail e-commerce sales in Canada reached a record $3.9 billion, doubling total sales from February. The rapid shift in consumer habits has widened the gap between businesses with an online presence and businesses who are still relying entirely on brick-and-mortar locations. For the brick-and-mortar only group, establishing a strong online presence will be increasingly vital for survival.

On top of the challenge of rapidly digitizing, businesses are also forced to navigate major disruptions in supply chains and plan manufacturing capacity for an uncertain future. Those who fail to overcome these hurdles face mounting losses and inefficiencies. Turnaround management, the process of pulling businesses back from the edge of insolvency, has taken on new relevance in the age of COVID-19.

Help is Here

Canadian business does not have to struggle alone. Partners in the private sector, government, and higher education have the capacity and the interest in making a tangible difference for local retailers. In the private sector, for example, e-commerce giant Shopify has teamed up with the Canadian government to launch a new initiative called Go Digital Canada, which offers courses, resources, and consultants to help small businesses create an online presence.

On the government side, local and provincial governments have stepped up support for struggling retailers as well. In Quebec, the provincial government is directing funds toward organizations like Le Panier Bleu, which actively connects Quebec consumers with local products and businesses.

While government and private sector partners are effectively meeting the needs of retailers in the short term, they are less focused on providing solutions to the long-term challenges that retailers face. The higher education community, on the other hand, is perfectly suited for the task.

Photo of Book City sign advertising alternatives to in-store shopping amid COVID-19 pandemic. Photo: Dustin Fuhs
Photo of Book City sign advertising alternatives to in-store shopping amid COVID-19 pandemic. Photo: Dustin Fuhs

Both now and into the future, Canada’s retailers will continue to face the complexities of digitizing their operations, maintaining an online presence, and building more resilient supply chains. The COVID-19 pandemic has inspired a renewed commitment to educating the next generation of retail leaders. My colleagues and I recently launched a new Master of Management in Retailing degree that emphasizes digital transformation in order to prepare students to lead in an increasingly complex retail landscape.

Even when COVID-19 is finally a distant memory, the retail sector will face another challenge, and another after that. As they continue to fight to remain competitive at this unique moment in time, Canada’s retailers have a capable and willing partner in the higher education community.

Dr. Yu Ma is Associate Professor of Marketing and Academic Director of the Masters of Management in Retailing at McGill University’s Bensadoun School of Retail Management. He obtained his PhD in management from Olin School of Business, Washington University in St. Louis. His research interest includes food marketing, retailing and big data analytics. He also examines broader marketing issues such as the influence of macro environment on the retail sector and the impact of food marketing on population health.

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