Canadian Tire Corporation Navigates Murky Waters With Robust Store Modernization and Loyalty Strategy
At the Canadian Tire Corporation (CTR), customer spend and retail sales in the third quarter are up over $700 million compared to pre-pandemic levels in 2019, according to a recent company call with investors.
Although the ongoing volatile environment poses challenges for every business, Greg Hicks, president and chief executive officer, attributes the company’s resiliency, and ability to overcome any future obstacles, to several factors: the company’s continued investment in hybrid digital and in-person experiences and a robust loyalty membership that is driving the majority of sales growth.
“We have connected the digital and physical worlds, enabling both channels to complement and amplify each other, ultimately delivering an enhanced customer experience through an expanded assortment and seamless omnichannel shopping options,” said Hicks during the call.
A Modernized Approach Helps Bolster Sales
Among the offerings garnering success across stores are click and collect, curbside pickup, and delivery from home. The company has invested heavily in fulfillment and loyalty in order to provide enhanced customer experiences throughout the full purchase cycle.
CTR has made several changes across its store footprints, launching new stores and making upgrades. Among them is a new 135,000-square-foot store in Ottawa that has a six-car canopy where consumers can pick up their online purchases. This store also features a heavy lean on tech such as electronic shelf labels, scan and buy tech that assists with bulky items, and workforce capabilities that allow employees to access real-time information.
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The company also recently opened a replacement store in Chilliwack, BC, expanding it from 45,000 square feet to 94,000 square feet — the largest footprint in British Columbia. This location features the brand’s Connect store design, which taps into electronic shelf labels, digital appointment scheduling, digital wayfinding, and an enhanced in-store mobile app experience and loyalty offer swapping.
CTR’s store in Welland is the brand’s most automated store warehouse, featuring more than 550 feet of conveyors, advanced product sortation capabilities, new wearable tech, and increased capability to over 170 full truckloads of products.
On the docket are a total of 36 projects to be completed, according to the company. These will add more than 350,000 square feet to the CTR network by end of year. In 2023, the company expects to complete another 22 projects in the first half, and 28 in the second half.
“Providing better experiences in our physical stores is just part of our omnichannel investment story. We continue to invest in ensuring customers have a seamless shopping experience no matter which of our channels they choose,” said Hicks.
Strength in Numbers
The company has also recognized the enormous potential to gather first-party data by leveraging its loyal base, stating that Triangle (CTC) Rewards members are driving the majority of sales growth, with the most involved members “driving a disproportionate share of growth.” In the third quarter, CTR loyalty sales grew 4% to $2.7 billion, and loyalty sales outpaced nonmember sales.
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The company expects to utilize Triangle data and analytics to double down on insights "to understand, engage, and provide real value to our customers.”
Hicks stated that registrations are a key area of opportunity, as registered members are more engaged and participate in more areas of the program, including one-on-one offers. “Registration provides valuable first-party data that enables us to cultivate stronger, more authentic relationships with our customers.”
Registrations among new members are lagging — 73% of all loyalty members are registered, but only 30% of members who joined the program in the last 12 months are.
“We believe that early registration has the potential to unlock considerable additional sales,” said Hicks. “A registered, new-to-CTC member spends 2.5x more than a non-registered new member in the first 12 months post registration.”
Early efforts in this space have been successful — the company already has 200,000 more registered members than last year. Initiatives included adding widgets to the CTR website that encourage customers to activate a Triangle Rewards membership. The widget displays how many bonus points they would receive if they purchased a specific product.
“Now we have scaled this program to include mass promo items,” said Hicks. “And we’ve learned that by displaying the dollar amount to be earned on the product display pages drives results for both one-on-one and mass offers. We will continue to investigate ways to leverage the widget for future brand and category multiplier offers, and identify new and innovative opportunities to meaningfully engage with our customers.”
Navigating Volatile Landscapes
The company is alert of the challenges that exist in the marketplace, and the uncertainty the future holds. However, Hicks is confident that CTR can continue to “manage in dynamic times” and “weather any storm.”
It’s likely that CTR will need to give back what it has gained in 2019 moving into the next year, he said, but through different consumer demands, the brand will not be taking its foot off the gas on its Better Connected strategy.
“We are resilient, have plenty of operating levers at our disposal, and harder insight and perspective from which we can successfully operate our business in difficult times,” added Hicks.
