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Canadian Tire customizing stores to serve more of Canada


TORONTO —One size does not fit all for Canadian Tire. The retailer is honing its ability to tailor stores to individual communities to make them more competitive, customer friendly and suitable to a wider range of markets, all at the same time.

Canadian Tire, in fact, is preparing to launch a new smaller format and, while it isn’t saying too much about it, spokes-woman Lisa Gibson did tell Retailing Today that merchandising will fit tightly with the unique needs of the communities targeted. The new format will take lessons the company has gleaned from the current Concept 20/20 generation of stores—particularly about how units can be modified to fit specific communities—and apply them in the smaller prototype.

The rural communities Canadian Tire will serve with the new format often have peculiar needs based on particular economic and lifestyle considerations, whether in localities that weekending cottage-dwellers frequent, or in isolated towns where vehicle maintenance may be a factor. “In Canada, there’s like a whole area of cottage country and smaller communities,” said Gibson. “There’s a huge opportunity there.”

Despite sitting in Canada’s largest urban area, a store in the East Toronto community demonstrates how the company is tailoring its prototype, and even provides some hints about how it might approach smaller-format stores. The East Toronto unit reflects developments in how Canadian Tire is fitting stores to recreation-oriented markets, for example, as well as how it is addressing communities that exist in relative isolation and how it is working to incorporate apparel.

East Toronto is a growing community fronting Lake Ontario but is isolated from downtown by the Gardiner Expressway. Canadian Tire addressed the area’s special needs with a store familiar in outline—built around the company’s core auto, hardware, sporting goods, home and, lately, workwear and outdoor apparel operations—but unique in several respects.

The store represents an evolution of Canadian Tire’s Concept 20/20 prototype. In a concession to the constraints of the urban environment, the store is laid out over two stories and includes Canadian Tire’s first cart elevator.

The company’s research indicated that the surrounding community largely consists of young families who spend more money than average on home appliances, decor, outdoor recreation and DIY home repair. So the retailer expanded its assortment in those categories and moved product up front in a position at the opening of the traffic pattern.

On the main, upper level, shoppers immediately pass through the seasonal department and reach housewares or, as Canadian Tire terms it, the Living section. Hardware, or Fixing, and sporting goods, Playing, also take part in the space, with customer service stations and checkouts up front.

Because of the emphasis on appliances and tools, the store merchandises more products out of boxes. “Research has told us that people want to touch and feel appliances and tools…so we tried to create a lot more space so you can pull them out,” said Gibson.

The idea is to demonstrate that Canadian Tire understands and addresses community priorities. Ultimately, the company wants to take what has worked best in Canadian Tire stores and build off that in a way that suits the local style. “We start off with our standard floor plan and then make changes,” Gibson said. “For example…this area has a ton of bike paths, so we bring in a lot more bikes than we would normally have.” The company also has an assembly service that, for a fee, can put together difficult-to-deal-with products for customers.

Canadian Tire outlets are owned by individual operators who are part of the company network. The relationship allows for the expertise of both the corporation and the entrepreneur to come to bear on operations, and it can be an asset when an owner brings local knowledge. In the case of the East Toronto store, Canadian Tire was able to look at the evolving community and make recommendations about how to address the particulars of the market, yet the owner remains free to stock from Canadian Tire offerings according to personal judgment.

“The way it works is, there is a whole list of products dealers can order. We forecast what we think they’ll need, but they order what they want,” Gibson said.

The lower level in the East Toronto store houses an easy-access auto parts department that is convenient to parking, another adaptation to the community that allows busy customers to deal with car maintenance issues with in-and-out convenience. It also includes a Mark’s Work Wearhouse location. Canadian Tire has been working its Mark’s operation more closely into its main business. In East Toronto, the Mark’s unit is in a space that’s separate from the rest of the departments, but, because elements of Canadian Tire’s automotive department are incorporated on the store’s lower level, apparel is about as close as it gets to integration into the general operation while maintaining a separate doorway.

While work is still a focal point of Mark’s operations, outdoor living, apparel and casual fashions are also major elements today, which suits East Toronto and an increasing number of Canadian communities, or at least that’s what Canadian Tire has concluded so far. The company has had limited in-store tests of certain apparel products, but now incorporates all apparel operations, outside of some sports-related items, into Mark’s.

So, a lot is happening at Canadian Tire on the store and corporate levels, but it doesn’t seem appropriate to characterize the company as being in flux. It posted solid operational earnings for the last fiscal year, despite a flat comparable-stores sales result based largely on late-year weakness. It might be more appropriate to say Canadian Tire is in search of a better fit with a broader range of consumers.

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