Canadian Tire has unveiled a new automotive-centric store format as part of a strategy to improve its customers’ experience when shopping for the products that helped make it a household name.
The test store in Bowmanville, Ont., will draw attention to its auto parts and accessories and provide more customer service in that area. It is also testing out the concept at stores in Orleans and Cambridge, Ont.
Canadian Tire is attempting to overcome sluggish retail sales after spending years trying to brand itself as a general goods retailer. As the company spent more time on other business segments, its automotive competitors were stealing away some of its customers and demand for its auto services declined.
The iconic Canadian retailer hopes to grow the auto division by 4% – 6% by 2015 and regain its reputation as a national authority on all things automotive.
“We believe shopping for auto products and the service experience should be stress-free, hassle-free and as exciting as driving a new car out of the dealership,” said Allan MacDonald, Canadian Tire’s senior vice-president automotive.
“Our automotive store of the future is a testament to our ongoing commitment to innovation and continuous improvement of the customer experience.”
The Toronto-based company announced its refocus on automotive at an investor day in 2010, saying it wanted to become the “authority for all things automotive” in five years.
But since then, the company has faced issues in the automotive space, including weaker consumer demand, more competition and customer complaints about availability of parts and help in stores.
Besides its main Canadian Tire retail stores, the company also owns the Mark’s Work Wearhouse clothing stores, gasoline filling stations and a consumer-oriented financial services division.
Over the past decade, under different senior management teams, Canadian Tire has spent billions of dollars expanding its store network across the country and diversifying – including into clothing through Mark’s and financial services.
CEO Stephen Wetmore has said the company had become distracted by the new businesses,
The new Canadian Tire store includes a sound booth to test electronics and a tire wall to display products. The store’s focus is part of its plan to have more parts available to customers, and more knowledgeable and quicker customer service.
The company has also made its largest ever technology upgrade in order to streamline how the company orders and moves auto parts and improve customer service.
It has already trained 4,000 employees to become experts in tire sales, and has introduced interactive store kiosks that allow customers to type in their car model and see which tires are right for them.
Customers are now able to purchase tires online and have them waiting at the store when they arrive.
The surprise departure of Michael Medline, the executive who had been head of the automotive business for less than a year charged with overseeing the overhaul of the division, threw a wrench into the plan last August, just as the retailer was also seeing a weakening market for auto parts.
He was replaced by long-time executive Glenn Butt as part of a major management shakeup and accompanying cost-cutting plan and commitment to better serve customers of its stores.
Canadian Tire’s automotive sales bring in about $13 billion in business each year.
