NEIGHBOURHOOD RETAIL ON EGLINTON AVENUE WEST, TORONTO. PHOTO: THE EGLINTON WAY BIA
As Canada continues to combat COVID-19, mass closures, reduced hours, and limited social gatherings have all impacted the retail industry. With people being strongly encouraged to self-isolate, work from home, and avoid public spaces, small businesses, in particular, are suffering the consequences.
The food and beverage industry has been doing what it can to keep some aspect of normality during the turmoil. Until recently, many bars and restaurants were remaining open for business, but with the past 48 hours seeing major adjustments within Ontario alone, including the restriction of sit-down service and only allowing businesses to operate their take-out/delivery options, normality is fading fast and making room for unprecedented uncertainty.
While other industries can operate remotely with relative success, restaurants, bars, and coffee shops are feeling the impact of these closures unlike most others. Employees are left without paycheques, perishable stock is left uneaten, and rents are left outstanding. Despite the allowance of take-out food to be delivered and picked-up, the industry is suffering greatly as COVID-19 wreaks havoc on the economy.
As people are encouraged to self-isolate and avoid exposure of any kind unless absolutely necessary, food delivery services are availing of the increased demand. Uber Eats is offering free delivery to surrounding communities and its website is asking customers to think of their local restaurants and support them by ordering from smaller establishments rather than chain restaurants.
UBER EATS (IMAGE: TECHCRUNCH)
People are being encouraged to buy gift cards from their favourite local hotspots, offering just a small injection of cash into the business to help with the low margins many are struggling with. Some restaurants across the country are appealing via social media to their loyal customers to remember them during the outbreak and to think about making reservations for the coming months or buying gift cards, even just to sustain morale within the communities.
Despite most closures being deemed as temporary, it is currently unclear as to how long these closures will last. COVID-19 has proven to be relentless in many aspects, perhaps meaning that some smaller establishments could face the possibility of never opening their doors again. In the face of this possibility, the government will be forced to evaluate possible tax deferral measures to help small businesses manage their cash flow and payroll obligations.
On a somewhat positive note, meal prep delivery services such as Fresh Prep, CleanBite, and HelloFresh are sure to see heightened demand as people refrain from buying groceries in the traditional sense. These services offer everything one needs to prepare full meals from the comfort of their own home. All ingredients are delivered to one’s door in correct quantities, ready to be prepared, and generally people subscribe to the service for weekly delivery.
Vancouver-based Fresh Prep has seen great success in recent years, with many people opting for the meal prep delivery service to shoulder some of their everyday stress.
STARBUCKS SEATING AREA CLOSED OFF IN WINNIPEG. PHOTO: WINNIPEG NEWS
EMPTY STARBUCKS SEATING AREA IN HAMILTON. PHOTO: THE HAMILTON SPECTATOR
The QSR (Quick Service Restaurant) portion of the industry is also taking drastic measures in attempts to flatten the curve. On March 12, Starbucks CEO, Kevin Johnson, released an official statement on Starbuck’s website stating “as we navigate this dynamic situation community by community and store by store, we may adapt the store experience by limiting seating to improve social distancing, enable mobile order-only scenarios for pickup via the Starbucks App or delivery via Uber Eats, or in some cases only the Drive Thru will be open.” These steps have since been implemented in Canada. At this point all QSR seating has been cornered off or removed across the country.
McDonalds has reminded its employees that all of its corporate-owned restaurants in Canada and many of its franchisees have existing policies in place to offer paid time off. Tim Hortons is taking similar steps as everyone else, and even completely closing particular stores in high-volume areas such as malls and universities.
It is clear that the fast-food chains will not struggle as severely as the smaller businesses, however it is unclear how COVID-19 will impact the sector in the long run. People may refrain from choosing to sit in close proximity to others for a prolonged period of time even after the pandemic is under control. Only time will tell how people’s habits will be affected. This could mean continued prosperity for delivery services and meal prep companies.
As the whole world continues to grasp the magnitude of COVID-19 and adapt to the necessary precautions put in place, one thing is clear: this pandemic is sure to leave lasting effects on the food and beverage industry. No establishment will come out unscathed — already so many are suffering — but with worries that some will not make it out at all, the possibility that whole retail communities may deplete is a valid concern.
This week Craig & Lee talk about COVID-19 and the early impacts on the Canadian retailers and landlords.
The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.
Oberfeld Snowcap is a full-service real estate and retail advisory firm that focuses on retail tenant representation, strategic planning, property and project leasing, as well as real estate investment sales.
Montreal-based entrepreneurs Marlee Rabin and retailer Laura Laoun have launched a unique initiative to help small and medium-sized businesses that have been hit hard by the COVID-19 pandemic. They are encouraging others in Canada to participate by creating similar initiatives in an effort to foster community and help businesses stay afloat as consumers isolate after new announcements by the Prime Minister of Canada during a press conference on Monday.
Over the weekend, Ms. Rabin launched the SUPPORT MTL Online Silent Auction which is intended to provide a financial injection to businesses suffering amid reduced consumer spending in the city. Laura Laoun, Director of Communications at Georges Laoun Opticien, jumped at the chance to help organize the initiative. The SUPPORT MTL Online Silent Auction web platform encourages visitors to buy gift cards from participating businesses to provide cash flow as shoppers remain indoors. “As Montrealers responsibly trade their social calendars in favour of self-quarantine and social distancing, purchasing behaviours have naturally shifted. Local small and medium size businesses are hit hard and working harder to find creative ways to face new challenges,” says the website.
MARLEE RABIN, ENTREPRENEURLAURA LAOUN, DIRECTOR OF COMMUNICATIONS AT OPTIQUE GEORGES LAOUN INC
Retailers, restaurants, cafes and service providers are welcome to join the platform which Ms. Rabin launched on AirAuctioneer on Monday. “The goal was to create a sense of community while helping one another,” said Ms. Rabin. “This is a concept that can be rolled-out by anyone across the country, and I encourage people to do so. This will be a very challenging time for businesses across the country and we want them to survive.”
Ms. Rabin explained that without cash flow, businesses that have already been struggling following the December holiday season could collapse at a time when retail was already struggling in many sectors.
Current SUPPORT MTL Online Silent Auction items:
The SUPPORT MTL Online Silent Auction encourages people to bid for their favourite Montreal-based products and services. Visitors to the website can also make a donation. “The total donation amount will be distributed equally among all local businesses who have registered to this website.”
Ms. Rabin explained that she hopes that as many businesses in Montreal will sign up on the new platform and that she is spreading the message far and wide for consumers to log in and make a purchase. Ms. Rabin is the founder of Ocurent, a unique dress rental business that has also seen a temporary slowdown amid the COVID-19 outbreak.
After the December holiday season, January and February are typically quieter months at Ocurent. The spring social season, which included various galas and other scheduled events, was expected to see an uptick in orders. “At the moment, all of our dress reservations have been placed on hold indefinitely, as events are all postponed or cancelled,” Ms. Rabin said. “I decided to utilize my time productively and create a platform to help struggling businesses through this unexpected and difficult time”.
Bringing a message of positivity to a challenging situation is one of the goals of SUPPORT MTL Online Silent Auction. “We need to come together as a community and support hardworking business owners”.
RED DIRECTION SIGNS IN OLD TOWN AREA OF MONTREAL.
The AirAuctioneer site is live and available for Montreal business owners to register and create gift certificates that can be bought by the masses.
Already, retailers across the country have announced that stores will be closing in an effort to halt the spread of the virus. Shopping centre landlords have also reduced hours and allowed retailers to operate on limited hours as shoppers stay indoors. Restaurants across the country are also seeing declining traffic at a time when margins are already thin.
On Monday, Canadian Prime Minister Justin Trudeau announced in a press conference that borders would be shut down to non-citizens/permanent residents temporarily, while keeping the US border open for now (likely for political reasons). International flights coming into Canada will be routed through major airports in Toronto, Montreal, Vancouver and Calgary. This will result in a halt in tourism that will have an impact on retailers that choose to remain open. At the same time, global shipments will continue in an effort to keep supplies coming into the country.
One impact of the economic shutdown is an increase in online shopping. Retail analyst and founder of Vancouver-based DIG360, David Ian Gray, said that online habits formed during this time could result in an increase in online shopping once the pandemic is over. That could include a significant boost in online grocery orders as many shoppers may try it for the first time. The online shift could have a longer-term impact on physical retail once things return to normal in this country, he said.
Seattle-based Nordstrom announced Monday evening that it was shutting all of its stores amid the COVID-19 pandemic. That includes six full-line stores in Canada as well as its six Nordstrom Rack stores. It comes at a challenging time for Nordstrom in Canada, which has yet to launch its ecommerce site which was planned for the spring.
“The health and safety of our customers and employees remain our top priority as we continue to make decisions during this rapidly evolving situation. We’re taking decisive actions across the business to help protect employees, customers and others in the communities we serve,” said Nordstrom’s CEO Erik Nordstrom. The retailer also revised its financial outlook as part of the announcement.
The six Canadian stores will remain closed from Tuesday for at least two weeks. Employees will receive pay and benefits during the planned two-week closure period.
Closures include three Nordstrom units in Toronto — the flagship store at CF Toronto Eaton Centre, a store at Yorkdale Shopping Centre, and a smaller unit at CF Sherway Gardens. The CF Toronto Eaton Centre closure will be particularly disruptive as the store acts as a passage way between two components of CF Toronto Eaton Centre. The north wing of CF Toronto Eaton Centre containing Uniqlo, H&M and Samsung connect to the much larger southern component of the mall via the main level of Nordstrom, which is said to see tens of millions of people pass through annually.
Other Nordstrom stores temporarily shutting down in Canada include the Calgary store at CF Chinook Centre, which was the first Nordstrom store in Canada when it opened in September of 2014. Other mainline Nordstrom stores shutting this week include a unit at CF Rideau Centre in Ottawa as well as the highly productive flagship store at CF Pacific Centre in Vancouver which last year was said to be the chain’s top performer.
NORDSTROM RACK AT VAUGHAN MILLS NEAR TORONTO. PHOTO: NORDSTROM RACK
Canada’s six Nordstrom Rack stores will also close for an initial two-week time period. That includes three stores in the Greater Toronto Area at One Bloor East, Vaughan Mills and Heartland Town Centre. Nordstrom Rack’s other three Canadian stores are located in Calgary at Deerfoot Meadows, South Edmonton Common in Edmonton, and at the Ottawa Train Yards in Ottawa. Nordstrom Rack had been scheduled to open its seventh Canadian store at the Willowbrook Centre in Langley, near Vancouver, on April 23 of this year.
SCREEN SHOT FROM NORDSTROM’S CANADIAN WEBSITE
This spring, Nordstrom planned to launch its Canadian ecommerce site to further grow its market share in this country. In the United States, Nordstrom’s online business represents about a third of its sales. Given that Nordstrom’s first Canadian store opened about 5.5 years ago, its delayed online business is concerning for the retailer. Lost sales in Canada will be substantial over the next two weeks at a minimum, and the retailer’s Canadian stores are said to be not meeting expectations except for the Vancouver unit, according to a source in the company.
When Nordstrom does launch its ecommerce site in Canada at Nordstrom.ca, it is expected to be as robust as its popular US online shopping portal. According to Nordstrom’s Canadian website, the new transactional component will include free standard shipping and returns, online order pick in stores, and duty-free purchases in Canadian currency. Canadians can still shop on Nordstrom’s US site for the time being. According to Nordstrom, the US site offers Canadians flat-rate international shipping and returns though prices will vary given currency fluctuations. Duties and taxes are calculated at the checkout of the US site for Canadians.
Concern over the spread of the COVID-19 virus (aka coronavirus) has led to retailers announcing temporary store closures in Canada while mall landlords announce reduced operating hours. It comes at an already challenging time in the retail industry and could lead to the demise of some retailers if the situation persists.
Over the past few days, several retailers have announced that stores would close temporarily in Canada in an effort to reduce the spread of the illness.
Seattle-based Nordstrom announced Monday evening that it would shut all of its stores, including six full-line stores in Canada and six Nordstrom Rack locations. Sephora announced Tuesday that all of its North American stores would shutter — some had expressed concern over the retailer being open given the ‘hand-on’ nature of product testing. H&M announced on Tuesday its stores would close for the short-term as well, as did Japanese retailer MUJI that operates stores in the Toronto and Vancouver markets.
US sportswear brand Nike, which over the past several years has been opening direct-to-consumer storefronts in Canada, announced Sunday that all of its stores would be closing at least until March 27th.
Apple shuttered its 29 Canadian stores over the weekend for at least two weeks as well. Apple stores are the most productive in Canada in terms of sales per square foot. Apple says that it will continue to fulfill orders online. Along with the Canadian store closures, Apple is closing its stores worldwide temporarily while reopening its 42 units in China where the virus has reportedly been mostly contained. On Tuesday, Microsoft also announced all stores will close temporarily.
Oour goal has always been to provide you with safe spaces to come together, laugh and be inspired. In the meantime, we’re here to answer questions, keep you entertained, and to continue to engage with our UO Community however we can. Take care of yourselves. ❤️ pic.twitter.com/p5J8kI2XOh
US apparel retailer Urban Outfitters Inc, which owns brands including Anthropologie and Free People, announced on Saturday it was closing all its stores worldwide until at least March 28. That includes several storefronts across Canada. Outdoor retailer Patagonia shuttered its stores globally including units in Canada. New Balance announced Monday that is stores would shutter temporarily.
On Sunday, Lush Cosmetics announced that it was temporarily closing all 258 stores in North America at least until March 29. Production will also be slowed. “Because our products are all made fresh by hand weekly for our shops, these closures will also require us to significantly scale down our manufacturing and distribution operations for the duration of the shop closures,” owners Karen and Mark Wolverton said in a statement. The Wolvertons are based in Vancouver.
Montreal insider Maxime Frechette informs us that the beauty hall at the downtown Montreal Hudson’s Bay store has shut down for now. He also informed us that stores including Abercrombie & Fitch, Hollister and Hermes have closed all stores temporarily. Hermes was set to open its new Montreal store at Holt Renfrew Ogilvy on April 10. On Monday, Mr. Frechette confirmed that Levi’s had shut its stores in Canada — Levi’s has been expanding its retail footprint in Canada significantly over the past four years. On Monday as well, Mr. Frechette informed us that Canadian retailer Laura had shut its stores for the time being, as has athletic retailer Foot Locker.
Montreal-based Browns Shoes on Monday announced that its stores would close “until further notice” while continuing to operate online. That includes stores under the Browns, B2 and Browns Outlet banners.
Vancouver-based Lululemon announced on Sunday that the retailer would shut its stores from this Monday until at least March 27. It will continue to pay workers for all of their hours during this time. And employees will receive pay for 14 days if they are asked to self-quarantine due to COVID-19.
Vancouver-based fashion retailer Kit and Ace, which operates a network of stores in Canada with an Edmonton location that was scheduled to open this spring, announced Monday evening that it would close its stores at least until March 27. Employees will be paid for hours that they would have worked during the shutdown, according to an email sent to subscribers.
Vancouver-based women’s fashion retailer Aritzia announced Sunday that all of its stores will be shuttered “until further notice”. Online profit from sales during the time will be donated to the retailer’s ‘Aritzia Community™ Relief Fund’.
Montreal-based vegan accessory brand Matt & Nat announced Monday afternoon that it would shut all of its stores temporarily. That includes several locations in Canada as the brand has been growing by opening in major malls.
Shaw Communications announced Sunday evening that its Freedom Mobile and Shaw retail stores would close for at least two weeks. Telus also announced it would shutter its mall kiosks as of the end of the day Monday. J.Crew shut its remaining three Canadian stores as of Tuesday, as did Burton snowboards which operates a store in Toronto. Exercise bike brand Peloton closed its Canadian showrooms on Monday for two weeks. Footwear and accessory brand Steve Madden has shut its stores until at least March 27, including its SHOO location at CF Toronto Eaton Centre. Footwear brand Vans shut its Canadian stores as well. Bath and Body Works announced Monday evening that its stores would shutter with no timeline given for reopening. Beauty brands Saje Natural Wellness, Aesop and Sephora are shuttering temporarily and Uniqlo as well.
Canada Goose announced that as of Tuesday, all of its stores globally would shutter until at least March 31. The brand operates seven stores in Canada and has started construction on a CF Toronto Eaton Centre location. Canada Goose stores sell tens of millions of dollars of product annually. Production of all Canada Goose products will be halted for at least two weeks and the company has revised its financial outlook.
Some independent retailers have also announced temporary store closures. Edmonton-based women’s fashion brand EMMYDEVEAUX, which operates a storefront in the city, shuttered Friday for at least two weeks. In an email, the brand said, “We are a very high touch business with many people trying on several items each visit.” Business is moving online only until at least March 25 according to the brand. “You can shop online anytime at emmydeveaux.shop. We are offering free shipping and returns in Canada and we will still be available via support@emmydeveaux.com and social media to answer sizing questions. Our products will still ship out, as usual, we ship every business day of the week.”
Other retailers and brands, particularly those relying on China for production, are said to be struggling amid concerns that product isn’t available for stores. Production in China came to a halt for weeks as the country was essentially shut down over coronavirus. Sources say that some retailers heavily reliant on Chinese goods were expected to have to shutter temporarily amid shortages, and some struggling retailers may never reopen depending on finances. Some struggling global brands may also shut down due to the situation according to one source Retail Insider interviewed last week.
Store closures, both temporary and permanent, will cause a headache for landlords. Shopping centre landlords in Canada have also made announcements that include reduced operating hours for centres in an effort to stem the spread of COVID-19 through less social-contact.
Landlord Cadillac Fairview announced on Saturday that it would reduce the operating hours of its 19 Canadian shopping centres effective Monday. The new mall operating hours will be 11:00 am to 7:00 pm every day except for when regularly scheduled closing hours are earlier. Cadillac Fairview says that these hours will be in effect for at least two weeks. Leasing staff for the landlord told Retail Insider that many will be working from home for the time being.
“At Cadillac Fairview our first priority is the health and safety of our guests, tenants/their employees and our employees across our portfolio. In light of many local governments taking actions to support our communities during this difficult time, Cadillac Fairview, as well as our industry peers will be limiting the hours of operation at our shopping malls,” the landlord said in a statement.
Events planned for malls have also been cancelled. Maintenance crews will focus on enhanced cleaning procedures for common areas, washrooms, stairwells, elevators, and any employee common areas. Hand washing signs, based on Health Canada’s best practices guidelines, have been installed in mall washrooms. Hand sanitizer stations have been added where possible.
YORKDALE SHOPPING CENTRE – COVID-19 UPDATE SECTION. PHOTO: YORKDALE.COM
WEST EDMONTON MALL – COVID-19 UPDATE SECTION. PHOTO: WEM.CA
Other landlords have also reduced store hours. Oxford Properties announced on Saturday that retailers at Toronto’s Yorkdale Shopping Centre were permitted to reduce hours to 11:00 am to 7:00 pm. The mall itself will remain open between 10:00 am and 9:00 pm for the time being except for regularly scheduled closing hours that are earlier. A review of mall websites shows other Oxford-managed malls have also permitted reduced hours while enhancing cleaning protocol. Ivanhoé Cambridge also reduced hours at malls such as Metropolis at Metrotown in the Vancouver area, which is one of the largest and most productive centres in the country. QuadReal’s Bayview Village in Toronto is allowing retailers to reduce hours though it says it will “postpone all social gatherings, club activities and programming until further notice.” Other announcements are expected to be forthcoming this week as the situation unfolds.
One landlord Retail Insider spoke with over the weekend said that at some point, shopping centre properties in Canada could shutter entirely depending on the spread of the virus. In the United States, the American Dream retail and entertainment centre, which was set to unveil its retail offerings this week, has closed at least until the end of the month. That includes the centre’s extensive entertainment options — American Dream is owned by landlord Triple Five which also owns West Edmonton Mall in Edmonton and the Mall of America in suburban Minneapolis.
At West Edmonton Mall, attractions such as Galaxyland, the Sea Lions Rock Show, and some slides in the World Waterpark have shut down. The waterpark’s hot tub will operate at a reduced capacity, and the Galaxy Land 7D theatre reduced its capacity.
Information that we received Sunday evening indicates that mass closures may soon be expected in Canada that could include all malls, restaurants and retailers excluding grocery and pharmacy, with announcements forthcoming. We’ll continue to monitor the situation as well as post updates in our Canadian Retail News From Around the Web.
The Body Shop has launched a new concept store in the CF Pacific Centre mall in Vancouver with elements of it to be rolled out in select store locations across Canada.
“Our new concept store reflects all of the key elements of our brand rejuvenation and The Body Shop’s values. We have long believed that business should be a force for good, and customers can see that across this new store. We’re thrilled to introduce our new Shower Gel Refill Station. We’ll continue to share our Community Fair Trade stories, particularly those focused on plastics,” said Hilary Lloyd VP of Marketing and Corporate Responsibility at The Body Shop.
“One of the store’s key features is its sink, a place where staff and customers alike can roll up their sleeves and test and try their favourite products. The new shop will even feature a raw slab of Shea for customers to sample and take home. A second key feature of the new store is our Activism Corner – a physical space where our store teams and consumers alike can engage and campaign for issues that matter to us – things like fighting for gender equality and fighting to end cosmetic animal testing.”
PHOTO: PROVIDED BY THE BODY SHOP
The retailer, which has 123 stores across Canada, has transformed the Vancouver store into an activist workshop that encourages visitors to explore, recycle products and “discover how, together, we can fight for a fairer and more beautiful world.”
It features a shower gel refill station and a water bottle refill station. The store has also been outfitted with sustainable store fixtures like reclaimed wood and recycled plastics to help minimize its environmental footprint. Examples include zinc facade cladding; an eco-friendly material that requires less energy production than other metals and can be produced from recycled materials taken from demolished or re-roofed structures. The store also boasts worktop surfaces that are manufactured from 100 per cent recycled material destined for landfill.
The activism corner is where consumers can discover the brand’s activist roots as well as campaign for social change around issues ranging from gender equality to fighting cosmetic animal testing. Consumers can also find out how they can get involved and take a stand with The Body Shop’s global and local collective of fearless activists.
PHOTO: PROVIDED BY THE BODY SHOP
Lloyd said the activist component will be rolled out in additional locations in Canada and the retailer is also working on taking key experience features from the new store – like its refill bar – and adding it to select store locations across the country.
“This year marks The Body Shop’s 40th anniversary in Canada, and that includes our presence in British Columbia. We have a large, loyal base of ethically engaged customers in the Vancouver market and this new concept store gives us the opportunity to provide our Vancouver customers with an experience that they expect from us and that perhaps they’ve missed from us in recent years. We’re rolling up our sleeves, refocusing on sustainability and reigniting our activist spirit,” said Lloyd.
“We hope to attract visitors who will join us in fighting for a fairer and more beautiful world. From community fair trade and plastics recycling, to refill stations and campaigning for causes that progress social equality, this new concept store is a marked return to our roots. Our ambition is to attract a collective of customers who want to roll up their sleeves and take a stand with us.”
PHOTO: PROVIDED BY THE BODY SHOP
Lloyd said the new Vancouver concept store marks the return to the retailer’s activism roots.
As part of The Body Shop’s new refill program, consumers can now purchase refillable 250mL aluminum bottles and fill them with shower gel favorites including; British Rose, Shea, Pink Grapefruit, Almond Milk & Honey, Satsuma, and Coconut. Combined pricing for the aluminum bottle and shower gel is $12, and shower gel refills are $7.
Lloyd said the revamped Vancouver location will also continue its ‘Return. Recycle. Repeat.’ program. The program, in partnership with Terracycle, encourages shoppers to return their empty bottles, jars, tubs, tubes and pots in exchange for a future purchase voucher.
PHOTO: PROVIDED BY THE BODY SHOP
“In 2019, The Body Shop was B Corp certified joining a select group of companies united in their mission to drive change in society through ethical and sustainable business. In partnership with fellow B Corps, The Body Shop is committed to doing business in a way that does good for both people and the planet.
B Corp certification is awarded to businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability to balance profit and purpose,” said the retailer.
The Body Shop was founded in 1976 in Brighton, England. It operates about 3,000 retail locations in more than 70 countries.
New York City-based retailer Aéropostale has made its return to the Canadian marketplace with a new store opening recently at the CF Polo Park shopping centre in Winnipeg.
Aéropostale was in Canada a few years ago but left the market in the spring of 2016 after the bankruptcy of its US division. The company had 41 stores in Canada at the time.
But it made its return to the Canadian market in time for Black Friday last fall with its first collection of products appearing in 75 Bluenotes stores across the country.
The ‘shop in shop’ stores were part of an overall plan Aéropostale has to establish a number of freestanding new concept stores in Canada from coast to coast this year.
PHOTO (LEFT TO RIGHT): GABBY GRAY (REGIONAL MANAGER), CATHERINE DELA CRUZ (AREA MANAGER), MICHAEL RODEN (CEO), & MYSELF SHANE BUTNER (DIRECTOR OF MARKETING & BRAND)
Shane Butner, Director of Marketing & Brand for Bluenotes, Aéropostale Canada and Thrifty’s, said the company chose Winnipeg as its first entrance back into the market because the Manitoba city “was a strong market for Aéropostale when they were last in Canada and a great market to learn from before we open a store in Toronto.”
“Winnipeg, along with our upcoming openings at Place Rosemere, Montreal and Mic Mac, Halifax, gives us a nice diverse mix of customers to learn from before we open a lot more locations,” he said.
The CF Polo Park location is 2,200 square feet.
“Right now we’re looking at probably 15 stores this year,” said Butner. “Fifteen is the initial. We’ll see how the marketplace is responding to it. You’ve got a combination of the freestanding Aéropostale plus you still have the ‘shop in shop’ inside Bluenotes. That’s already putting us at about 90 stores by end of year as far as that market footprint goes.
Real estate company Oberfeld Snowcap is handling leasing for the standalone Aéropostale locations under the direction of Andrew Laudenbach.
Aéropostale at CF Polo Park. Photos: Aéropostale
“We don’t want to oversaturate where you’ve got an Aéropostale in every single mall. We want to be smart and strategic about it. See if the customer responds. See where we’re doing the best. Expand into those areas and learn from it. It’s different from a Bluenotes’ customer. We’re definitely learning that. There’s two different sets of customers shopping it. There are those that have the nostalgia of remembering Aéropostale and coming back to shop it again and then you have a whole new younger generation that knows Aéropostale in this new format and doesn’t remember the prior.”
Butner said the new store design is really fresh, clean and simple. More lighter woods and white brick. A more digital experience has been introduced with a video screen. The space has been kept open and spacious. The retailer didn’t want the store to feel too crowded and too overwhelming of product.
“But still a high unit, intensity store,” he said. “Obviously when you get a lot of product you get a lot of the sales there.
“From merchandise and promo, we’ve kept it very sharp pricing. The Aéropostale merchandise on average is about $5 to $10 more than the Bluenotes product. We’ve got a little bit more of a quality finish in it which gives the customer value for the dollar difference. When Aéropostale was in Canada the last time there were a variety of different promos and the prices were very inflated and then they take a big deep discount on it. We’re not taking that approach. We’ve gone sharp with the price points and then have every day promo on top of it.”
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Aéropostale at CF Polo Park. Photo: Aéropostale
Aéropostale at CF Polo Park. Photo: Aéropostale
Aéropostale at CF Polo Park. Photo: Aéropostale
Aéropostale at CF Polo Park. Photo: Aéropostale
The Halifax store is scheduled to open at the end of April or early May. The Montreal store will also open about the same time. Those stores will be about 4,000 square feet each.
Butner said the retailer has seen a good response from consumers to the new Winnipeg store and the brand’s return to the Canadian market.
“If you think about it, there hasn’t been a new retailer, at least in our demographic, for quite a few years now. So it’s definitely something new and exciting for the customers,” he said.
In an interview with Retail Insider last year, Michael Roden, CEO of Bluenotes and Aéropostale Canada, said the Aéropostale main age demographic can be as young as 15 years old up to the early 20s – high school to early college and university.
“We’re very excited. We’ve been working on this for quite some time. We’ve been working with the merchandising group and we’ve been going back and forth to New York learning about the brand, learning what works,” he said.
Bluenotes has been a Canadian company since 1942 with the original store called Thrifty’s at the corner of Queen Street and Church Street in Toronto. Bluenotes is known as one of the top denim retailers in Canada.
Bluenotes is the exclusive licence partner of Aéropostale in Canada. The merchandise is designed in Canada in partnership of Aéropostale USA making it an exclusive collection to the Canadian stores.
SHELVES THAT HELD HAND SANITIZER AND HAND SOAP ARE MOSTLY EMPTY AT A TARGET IN JERSEY CITY, N.J. ON MARCH 2, 2020. AS FEARS OF THE PANDEMIC GROW, CONSUMERS ARE STOCKPILING GOODS IN CASE THEY’RE QUARANTINED. (AP PHOTO/SETH WENIG)
By Xiaodan Pan, Benny Mantin and Martin Dresner
As the fear of the coronavirus spreads, consumers have been flocking to stores to stockpile emergency supplies, resulting in empty shelves as retailers can’t keep up with demand. This situation will likely intensify.
Consumer stockpiling in the face of the COVID-19 outbreak can be viewed as unconventional inventory accumulation, mainly meant to minimize a perceived threat of loss or fear of going without.
Consumer stockpiling can also be explained using commodity theory and prospect theory. Commodity theory proposes that the value of a product is positively related to its scarcity, so perceived shortages may stimulate stockpiling behaviour. Prospect theory describes how people are risk-averse when choosing between uncertain alternatives. To avoid potential losses in the face of uncertainty from the coronavirus outbreak, consumers may stockpile or hoard essential items.
CLASSIFICATIONS FOR INVENTORY HOLDINGS.
Consequences of stockpiling
Consumer stockpiling has immediate and long-term effects on retail operations. At the early stage of an outbreak, retailers may increase product availability in anticipation of stockpiling behaviour. However, depending on supply readiness, stockpiling can soon lead to retailers selling out, with shortages persisting for several order cycles.
SHELVES STAND EMPTY IN THE AISLE FOR TOILET PAPER AT THE WAITROSE SUPERMARKET IN SURBITON, SOUTH WEST LONDON, ON MARCH 11, 2020. (AP PHOTO/MATT DUNHAM)
As retail stocks dwindle, prices rise for at least two reasons.
Firstly, because lower-priced products are sold out, consumers must purchase higher-priced alternatives, also known as the product substitution effect.
Secondly, sellers can capitalize on the imbalance of supply and demand and boost prices. Retailers may also hike prices because their suppliers have, thus driving up costs throughout the supply chain.
Overall, under the stress from the coronavirus, scarcity of supply may induce consumers to pay higher prices.
We find that drug stores are associated with the highest consumer stockpiling propensity prior to hurricanes. They carry a large array of essential items that consumers may stockpile in advance of emergencies, such as bottled water, prescriptions and personal hygiene products.
SHELVES WHERE DISINFECTANT WIPES AND SPRAYS ARE USUALLY DISPLAYED SIT EMPTY IN A PHARMACY IN PROVIDENCE, R.I. (AP PHOTO/DAVID GOLDMAN)
However, after the hurricane passes, consumers may find the best product availability in grocery stores and warehouse clubs. By contrast, discount and dollar stores are associated with the lowest availability of emergency essentials in the weeks after a hurricane.
When demand exceeds supply, distributors may allocate products to their best and most reliable retail customers, leaving low-margin retailers without stock.
In general, high in-store product availability is associated with fast inventory turnover and short processing lead times, characteristics of retailers with quick recovery capabilities.
INVENTORY TURNOVER RATIO AND PROCESSING LEAD TIME BY TYPES OF RETAILER. WHARTON RESEARCH DATA, AUTHOR PROVIDED
As they stockpile essential products, consumers exhibit another interesting behaviour. They tend to purchase from national retailers with extensive retail networks. National retailers carry greater inventory across their networks, meaning they may respond to regional demand shocks by shipping in inventory from outside the affected regions.
SHOPPERS RUSH TO PICK UP TOILET PAPER THAT HAD JUST ARRIVED AT A COSTCO STORE ON MARCH 7, 2020, IN TACOMA, WASH. (AP PHOTO/TED S. WARREN)
For example, using data from the United States, our research finds that as the national store network increases from about 600 to 7,300 stores across the country, consumer stockpiling propensity prior to hurricanes more than doubles. So a store from a chain with 7,300 stores experiences double the amount of consumer stockpiling relative to its operations in normal time compared to a store from a chain with 600 stores.
However, shipping costs may limit a retailer’s inclination to accommodate regional shortages, so affected retail outlets from these national chains may sell out of needed products, even if other stores in the chain have excess inventory of the same goods.
Unique coronavirus challenges
Both retailers and local governments face challenges caused by consumer stockpiling when emergencies such as the coronavirus outbreak hit.
Compared to more predictable environmental emergencies such as hurricanes, the diffusion process of the coronavirus outbreak is difficult to forecast. The widespread outbreak of the coronavirus may also lead to global shortages on a larger scale than the hurricane events, thus making it more difficult for retailers to shift inventory around their networks to accommodate regional demands.
EMPTY SHELVES WHERE WATER IS SOLD AT A GROCERY STORE ARE SHOWN IN AUGUST 2019, IN NORTH MIAMI, FLA. AS HURRICANE DORIAN APPROACHED. (AP PHOTO/WILFREDO LEE)
On the plus side, hurricane forecasts may only be made days in advance. The progression of the coronavirus can be measured in weeks or months, thus providing retailers and their suppliers with additional time to prepare for potential stockpiling behaviour.
Policy-makers may be able to influence both the supply and demand for critical products through public announcements and advisories, thereby altering stockpiling behaviour and retail stocking habits.
Overall, collaboration and communication among government officials, emergency organizations, retail managers and consumers can allow for better allocation of essential supplies amid the coronavirus outbreak.
This article was originally published by ‘The Conversation’. Click here to view the original article.
Dr. Xiaodan Pan
Dr. Xiaodan Pan joined the John Molson School of Business at Concordia University in 2018. She obtained her Ph.D. degree in Supply Chain Management from the University of Maryland (UMD).
Professor Benny Mantin
Professor Benny Mantin is the Director of the Luxembourg Centre of Logistics and Supply Chain Management (LCL), at the University of Luxembourg, which is a member of the MIT’s SCALE network.
Martin Dresner
Martin Dresner received his Ph.D. in Policy Analysis from the Sauder School of Business at the University of British Columbia. His research focuses on two broad areas, air transport policy and logistics management.
An off-schedule podcast interview with Mark Ainley, a retail flow analyst and consultant from Sense of Space in Vancouver.
Mr. Ainley discusses the flow of retail and how physical spaces can be more welcoming to customers.
The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.
Online is overtaking the store for browsing, search and discovery phases of the shopping journey, while brick and mortar is still the preferred venue for completing a purchase, says a new research report by Eagle Eye.
The Connected Customer report said establishing consistent digital customer connections and extending those connections into the store is an essential advantage for retailers and brands.
The report found that Canadian consumers visited three digital channels on average before making a purchase and Canadians are more likely to complete their purchase in a store (77 per cent).
MIYA KNIGHTS, HEAD OF INDUSTRY INSIGHT, EAGLE EYE SOLUTIONS
Miya Knights, Head of Industry Insights at Eagle Eye Solutions, said the consumer survey confirmed that consumers are increasingly using digital to inform their purchasing journey.
“They prefer to browse on a website before purchasing in-store,” said Knights. “Canadians in the context of how much they have incorporated digital into their pre-purchase mix were pretty much in line with the other markets that we surveyed (UK, US and Australia). About 67 percent are saying that they visit websites before making purchases,” she said.
“But actually, Canada was the only country that came out highest in terms of the portion of customers that then go on to visit a store. That has many far-reaching implications, but I think the good news is it confirms the store is an essential part of the consumer engagement mix.”
LEIDEN, THE NETHERLANDS – June 17, 2018: Hudson’s Bay store. The Hudson’s Bay Company is a Canadian retail business group.
The report also found:
Canadian consumers are significantly more likely to visit a ratings and review website (33 per cent) or social network (31 per cent) than consumers in other regions surveyed;
74 per cent of Canadians choose a retailer based on the best price, while 64 per cent are influenced by the variety of offers and 63 per cent by a loyalty scheme;
59 per cent surveyed collected or used loyalty points or vouchers recently;
61 per cent of Canadian consumers conducted at least one online activity prior to purchase in-store; and
64 per cent of Canadian consumers said relevancy in marketing is very important to them.
“Canadian consumers prefer to research products online and on their mobile devices before buying, but ultimately complete their purchase (including ‘click & collect’) in a traditional store. Retailers should therefore support customer shopping journeys by bringing digital connections in-store, using mobile apps and other interactive touchpoints, such as electronic shelf labels, to make the shopping experience easier and faster,” said the report.
“By all accounts, Canadians are active online. Ecommerce sales growth in Canada increased 18 per cent year-over-year as of April 2019 versus only 2.8 per cent growth for brick and mortar,” it added.
Key findings of the report include:
Many Canadian consumers prefer to carry out research online and via mobile before making a purchase. Retailers and brands must support the entire shopping journey and establish digitally enabled, data-driven customer connections. Generations X, Y and Z are using more channels before making a purchase – up to 3.4 touchpoints for high-value purchases – reinforcing the need for retailers across sectors to have a consistent omnichannel presence;
Digital customer connections provide invaluable shopping journey data that should be used to gain insights into what influences a customer’s choice of retailer. “Value for money” is still the top driver of consumer choice. But their growing expectation of rewards and recognition also has a powerful influence on whether a consumer chooses a particular retailer or brand;
Although price and promotions are the main influencers on a consumer’s choice of retailer, it is essential to take action and demonstrate added value doesn’t always have to mean a discount. Canadians perceive loyalty program apps as added value. It’s their most favored means for promotion delivery;
Taking effective and timely action in response to customer needs, preferences and expectations can boost engagement, as a prerequisite to promote loyalty that can drive sales and frequency. Relevancy (i.e., something consumers want or like) is the most important factor in whether the vast majority (94 per cent across all regions) of consumers across markets, age groups and gender redeem a promotion.
“Canadian consumers, like shoppers worldwide, are increasingly digitally connected. They have effectively migrated the browsing, searching and discovery phases of their shopping journeys to digital channels, though they still prefer to complete their purchases in a store,” said the report. “Effective performance marketing provides a way for retailers and brands to engage with consumers through any channel – and at any phase of their journey.
“Effective performance marketing also enables retailers and brands to follow their customers across touchpoints and understand them better by tracking their behaviors and preferences. Anonymous, mass-market, traditional marketing is not enough anymore. Retailers and brands must embrace personalization, shopping convenience, sustain relevance, and market “in the now” to engage with their customers and influence their purchasing habits more effectively.
“This is where the DIAL (Data, leading to Insight, driving Action to promote Loyalty) approach matters most. The “give to get” dynamic of most loyalty programs, which rewards consumers who provide access to their shopping information is evolving. Consumers today expect more from their chosen retailers and brands. This is why retailers and brands must always keep their eyes on the prize — to attract new customers, increase interaction and improve retention. In this fast-changing retail environment, retailers must utilize digital customer connections and data to develop insights into their behaviors for more effective marketing that can drive sales and foster more loyal repeat customers.”
Knights said the underlying factor in consumer trends is the increasing adoption of technology and that they are increasingly embracing the use of mobile for shopping.
“That’s anywhere and everywhere,” she said. “The whole search, browse and discovery phase of the shopping journey is increasingly going to be conducted by digital and increasingly via mobile technology. So, it is essential that retailers and brands harness this opportunity consistently, both online and in-store.”
Eagle Eye is a leading SaaS technology company transforming marketing by creating digital connections that enable personalized performance marketing in real time through coupons, loyalty, apps, subscriptions and gift services. Eagle Eye AIR enables the secure issuance and redemption of digital offers and rewards at scale, across multiple channels, enabling a single customer view.
It creates a network between merchants, brands and audiences to enable customer acquisition, interaction and retention at lower cost whilst driving marketing innovation. The company’s current customer base comprises leading names in UK Grocery, Retail and Food & Beverage sectors, including Asda, Sainsbury’s, Tesco, Waitrose and John Lewis & Partners, JD Sports, Burger King, Greggs, Mitchells & Butlers, Pizza Express and in Canada, Loblaws, Shoppers Drug Mart and Esso.
Eagle Eye is headquartered in Guildford, United Kingdom and has offices in Manchester, Toronto and Melbourne.
