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Tuesday, January 20, 2009

Canadian Tire Shutters E-Store

My father-in-law, George, is something of a business expert.

An ex-banker, he can generally make sense of a balance sheet. Then he goes around and talks to employees, and pokes around in the stores. For him, it's far superior to golf as a pastime. It might even beat growing tomatoes.

For several years George has had one conclusion about Canadian Tire: "They've got big problems."

George has never visited Canadian Tire's website... nor much of any website, for that matter. That's my department.

Disclosure: Canadian Tire is an ex-client.

We *never* talk publicly about ex-clients, and we certainly don't disclose anything about current clients without their permission. So about all I can say about this as a now outside observer is, they shut down their entire e-commerce operation, and I'm gobsmacked.

In the news release about this, a company spokesperson referred to the cost of shipping heavy items such as patio sets. (!) Come on. Patio sets were never on anyone's radar as an item to buy from Canadian Tire online. Instead there is a long, long tail of attractive items that people might indeed buy. But the online presence didn't make it easy to buy, and needed a total overhaul. I'm not close to the situation, but just over a year ago, one of their most senior and savvy execs left the company -- one assumes out of frustration.

While it's certainly true that the online world faces challenges (the fact that 85% of Canadians live within a 15-minute drive of a Canadian Tire store, leaving little on the table for what is already a small national market), there is only one way to enter that world as a major retailer. One word: investment. Investment, even on a fraction of the scale of the investment in 450 brick and mortar stores.

Lack of investment = failure. "Patio sets are heavy" sounds like one of a string of rationalizations for a lack of commitment to e-commerce. Let's hope the fearful attitude isn't contagious. The last thing Canada needs today is to shrink from innovation and the pursuit of consumer convenience and efficiency (to say nothing of leadership in data mining, etc.). Canadians are indeed reluctant to buy online, as compared with their U.S. counterparts. Without leadership from the highest corporate levels, they may remain reluctant.

Let's not dance around this in typically Canadian fashion. If frickin' Hedonics can sell online here in Canada, then so can Canadian Tire.

If Sonoma-Williams (a U.S. company) American Apparel (a U.S company) can, so can Canadian Tire. If Zappos and NutsOnline (both U.S. companies too) can do it, so can Canadian Tire. If Golf Town can... well, you get the idea. (You don't literally have to ship tires.)

Prediction: the Canadian Tire e-store will be back, after a couple of years of rethinking and hopefully, recruitment of specialists. For now, it sounds like they're piloting a "research online, pick up in store" program, which is interesting, but more or less mimics behavior people already follow tacitly. Another option, if Amazon beefs up its .ca presence to partner with hundreds of retailers as it does in the U.S. , would be to negotiate a preferred partnership with the e-commerce leader. That too would require commitment to study and tweak the program to respond to consumer behavior over several years. It's easy to give up too soon. (Doom was predicted many times for Amazon itself, by Wall Street pundits and "retail analysts".)

Meanwhile, the long, cold winter for would-be e-shoppers in Canada continues. Enjoy that drive to the store.

Posted by Andrew Goodman




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