Understanding The Canadian Marketplace
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Are you looking to expand? Have you considered moving into Canada? If so, let us help! The Canadian marketplace, as you might not know, is actually much different from the United States. Here's some tips to help you out in the process.
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Understanding The Canadian Marketplace
- 2. 2 What We See InThe Canadian Market What We Learned FromTarget What We Hear While Working With Our Clients What We Do To HelpYou Succeed Who We Are The Buxton Solution
- 3. 3 Relationships Some of the Fastest Growing Brands Partner with Buxton
- 4. 4 Reputation Award-winning Business & Analytics
- 5. 5 We Define WHOYour Best Potential Customers Are WHO We Identify WHEREYour Best Potential Customers Are Found WHERE WeTellYouThe VALUE OfYour Best Potential Customers VALUE The Buxton Solution Who,Where,Value
- 6. 6 80,000Sites Evaluated In The Last 12 Months 7,500Stores Opened In The Last 12 Months Results Tremendous Influence on the Retail Industry
- 7. 7 What We See InThe Canadian Market What We Learned FromTarget What We Hear While Working With Our Clients What We Do To HelpYou Succeed Who We Are The Buxton Solution
- 8. 8 1.18% -2.71% 3.37% 2.53% 1.71% 2.02% 2.27% 2.45% 2.36% 2.22% 2.08% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% GDPgrowthcomparedtoprioryear Canada: Real GDP Growth Rate From 2008 To 2018 (Compared To Prior Year) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 What We See in the Canadian Market A Stable, Attractive Economy GDP Growing at 2.45% in 2015
- 9. 9 What We See in the Canadian Market A Stable, Attractive Economy Inflation Averaging 1.64% Source: http://www.inflation.eu/inflation-rates/canada/historic-inflation/cpi-inflation-canada.aspx#sthash.3kc6J88B.dpuf 1.67% 2.38% 1.16% 1.32% 2.35% 2.30% 0.83% 1.24% 1.47% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Annual Inflation (Dec vs. Dec)
- 10. 10 What We See in the Canadian Market A Stable, Attractive Economy Unemployment Rates Dropping 9 8.5 8 7.5 7 6.7 6 5.5 9 8.5 8 7.5 7 6.7 6 5.5 Jan / 01 Jan / 04 Jan / 07 Jan / 10 Jan / 13 Canada Unemployment Rate Percentage of the Labor Force Source: http://www.tradingeconomics.com/canada/unemployment-rate
- 11. 11 What We See in the Canadian Market A Stable, Attractive Economy Population Growth Largely From Immigration Versus Natural Birth Rate Drives Diversity Source: http://www12.statcan.gc.ca/census-recensement/2011/as-sa/98-310-x/2011003/fig/fig3_1-1-eng.cfm 0 0.2 0.4 0.6 0.8 1 1.2 1991 to 2001 2001 to 2011 2011 to 2021 2021 to 2031 2031 to 2041 2041 to 2051 2051 to 2061 Population Growth Rate (%) Natural Increase Migratory Increase % % % % % % %
- 12. 12 What We See in the Canadian Market Increasing Urbanization 45% 55% 00 80% 20% 00 Canadians in Urban Centers 1911 2011
- 13. 13 What We See in the Canadian Market Demographics Diverging from U.S. 60% Asian Descent 30% Mexican Descent Differences in immigrant citizens shifts cultures differently
- 14. 14 What We See in the Canadian Market A Stable, Attractive Economy Retail Sales Growth of 4.7% 10% 5% 0% -5% -10% 10% 5% 0% -5% -10% Jan / 02 Jan / 04 Jan / 06 Jan / 08 Jan / 10 Jan / 12 Jan / 14 Canada Retail SalesYOY Source: http://www.tradingeconomics.com/canada/retail-sales-annual
- 15. 15 What We See in the Canadian Market Higher Spending Habits Home Ownership Food & Alcohol Clothing Shoes Reading Material
- 16. 16 What We See InThe Canadian Market What We Learned FromTarget What We Hear While Working With Our Clients What We Do To HelpYou Succeed Who We Are The Buxton Solution
- 17. 17 What We Learned fromTarget Target Had ReasonsTo Be Optimistic 10% 10% of Canadians Shopped in a U.S.- basedTarget 70% 70% of Canadians Were Familiar with theTarget Brand
- 18. 18 What We Learned fromTarget Q & A Question: With a head start in brand recognition and penetration, why did things go so badly so quickly? Answer: They were opportunistic instead of prepared.
- 19. 19 What We Learned fromTarget Competitors Look Different
- 20. 20 What We Learned fromTarget Customer’s Experience withTargetWas Different in CanadaThan in U.S. Higher PricingThan Expected $ Missing Expected Brands Frequent Stock Outages
- 21. 21 What We Learned fromTarget Inconsistent Brand Identity =
- 22. 22 What We Learned fromTarget In Summary • Consumers spend money on different things • Competitors were not well known & competed on different bases • TheTarget experience provided was different than the U.S. experience: • LocationQuality • Pricing • Merchandise Mix • Stocking Reliability Target Locations in the U.S. & Canada
- 23. 23 What We Learned fromTarget Lessons Learned Recognize that meaningful differences do exist between the U.S. and Canada Expect to customize the merchandise mix to meet local tastes and needs Plan to grow at the pace of your learning It is better to be prepared than fast
- 24. 24 What We See InThe Canadian Market What We Learned FromTarget What We Hear While Working With Our Clients What We Do To HelpYou Succeed Who We Are The Buxton Solution
- 25. 25 What We HearWhile Working With Our Clients Differences That Require Preparation CustomersValue & ExpectA Higher Level Of Service Labor Law Labeling & Signage Differences French Language In Quebec Different Competitors Less Understood Significant Intra-country Differences
- 26. 26 What We HearWhile Working With Our Clients A Few Big Players, But Mostly Fragmented
- 27. 27 What We HearWhile Working With Our Clients Doing Business In Canada Can BeVery Profitable Square Foot Sales 14 Sq. Ft. of Shopping Floor Area CANADA 23 Sq. Ft. of Shopping Floor Area UNITED STATES
- 28. 28 What We HearWhile Working With Our Clients Yet, Canada Represents the Easiest Form of International Growth Success in Canada • The Incumbents • Acquire toWin • Slow & Steady
- 29. 29 What We HearWhile Working With Our Clients Who Is Moving Into Canada Successfully & How?
- 30. 30 What We HearWhile Working With Our Clients Entering CanadaVia Acquisition
- 31. 31 What We HearWhile Working With Our Clients Building Slowly, But Surely
- 32. 32 What We See InThe Canadian Market What We Learned FromTarget What We Hear While Working With Our Clients What We Do To HelpYou Succeed Who We Are The Buxton Solution
- 33. 33 What We DoTo HelpYou Succeed Buxton Can HelpYou… • MakeWiser, More Informed Decisions • FindThe Best Opportunities & Avoid MakingCostly Mistakes • UnderstandYour Existing Customer Base(s) • Discover Differences Between Canadian & U.S.Customers • UnderstandTheir PotentialValueToYou • Forecast Potential Location Performance
Editor's Notes
- Thank you for your time. Compliment their company and add in a relevant story here. As you know Buxton is a Customer Analytics company and we help some of the fastest growing companies understand what drives their business. We help them answer some of their most pressing business questions. Here is a representative list of some of those businesses who we have helped in our 20 year history.
- We have been recognized repeatedly for innovation in this business. We have not only defined the practice of analyzing your customers to inform Real Estate decisions we have influenced the retail industry. These are just a few of the more recent awards we’ve gotten.
- The core of what we do boils down to three things. The rest of the presentation will use this foundation to help you understand your business.
- Our influence on the retail industry is tremendous. It has been estimated that in 2013, one-fourth (25%) of all retail square-footage opened in the United States was the result of a Buxton analysis.
- GDP growing at 2.5% in 2014, consistently between 2% and 3% since dip in 2009
- Inflation 1%
- Unemployment ranges between 6.8% in total, but Canada is very aware of building labor shortages coming about due to a relatively low birth rate, which drives supplemental growth via immigration
- 1.2% population growth coming from immigration vs birth rate 40% of which is due to natural birth rate (0.5%) – and declining 60% is due to immigration (0.7%) This leads to an increasingly changing population as growth is not of the same origin as the incumbent population
- Leading to real estate crunch in urban areas with little development space Smaller spaces being utilized / non-standard footprint sizes altering merch mix
- Demographics diverging from US: Non-native population: 60% Asian in CAN vs 30% Hispanic in US
- Spending habits Higher on home ownership High expenditures on food & alcohol, clothing, shoes & reading materials
- They jumped in boldly with both feet by opening 124 locations in one year, before having any exposure/learning Focus on completing this gargantuan task instead of focusing on what needed to be done differently region by region to be successful (high volume vs customization) They claimed a real estate footprint that was suddenly available vs correctly located for their business
- Loblaw’s is a grocery chain with over 1,000 that has a stylish clothing brand called Joe Fresh that competes with Target’s audience for clothing Canadian Tire, despite its name, is a general merchandizer with strength in household and kitchen goods, two areas Target typically excelled These competitors may not have been on Target’s radar as much as WalMart and Costco when looking at expansion
- Customers’ experience of Target was different in Canada than in the US While slightly higher than WalMart, affordable prices are a hallmark of Target in the US, but Target priced much higher in Canada, a different business model Some of the specific products and brands that Canadians were expecting to see were not offered in Canada Target’s supply chain struggles resulted in frequent stock outs that turned off customers “It’s a little bit of everything, but not everything under one roof.”
- Their pricing strategy was inconsistent with their placement, service & selection Customers were annoyed that the pricing was higher in Canada than the US for the same products, did not see Target as a value brand Customers associated Target with the failed Zellers as Target occupied these locations
- they swung for the fences, but instead of hitting a home run, they struck out with the bases loaded
- Learn as you go, and grow accordingly Realize that Canada is different than the US, and expect to learn something, even many things about that market as you enter Anticipate that Canada is very different even between regions, so expect success in one region to look different than success elsewhere Expect to customize your merchandise mix to meet local tastes and needs It is better to be prepared than fast – don’t rush into a market until you feel confident you have the information needed Expansion into Canada for most clients is the easiest form of international expansion, but we need to recognize the meaningful differences that do exist
- There are differences that require preparation for those entering: Customers value and expect a higher level of service Labor laws Labeling & signage differences French language in Quebec Different Competitors less well understood Significant Intra-country differences (not as simple as going into Canada, but which province)
- Canada has higher sales per square foot than in the US. And Canada only has 14 square feet of shopping-floor area per capita, compared with 23 square feet in the US.
- Proven success stories: Canada; Home Depot, Staples, Costco, Wal-Mart and Starbucks