After Canadian Tire announced big changes to its loyalty program, Canadian Business‘ James Cowan met with CEO Michael Medline to discuss the retailer’s digital roadmap for its various retail banners. Here’s an excerpt of that conversation.
Michael Medline
When your appointment as CEO was announced in August, you said Canadian Tire needed to become “best-in-class” with its digital strategy. The company ditched online shopping in 2009, but recently started letting people pay online and pick up at a store. Is that the new model?
Michael Medline: You go where your customers want to take you, and at this point, that is a little different by banner. At Sport Chek and at Mark’s, we do deliver to homes. But because there are so many Canadian Tire stores right across the country—I think 90% of the population lives within 15 minutes of a Canadian Tire—it’s much simpler just to order online and pick up at the store. But I can tell you that Canadian Tire will look at every way to compete and beat our competitors to make the customer experience better, and if that means delivering to homes, we will be looking at delivering to homes. If it means delivering to a lockbox or a locker somewhere, we will do that, and if it means picking up in the store, we’ll do that.
How is it simpler to pick up at the store? I have to put on shoes to go do that.
You have to be home, though, to get a delivery.
Ah, right.
And certain items are just easier to pick up in the store. But you may be a deliver-to-your-home customer, and I may be different, so it’s just about being able to do all these things. Sure, they’re more complex, and in some ways more expensive, but as we adapt to the new world, we’re actually seeing better results, both on the top line and bottom line. Maybe 10 years ago people were worried about digital. Now we see them as opportunities, not as threats.
You just announced a new loyalty program. Does that play into the digital strategy as well?
I think it’s one step on the way to that goal. What we’re seeing is a generational shift, and we have to be able to move with our customer. If you put your head in the sand and you don’t move with the customer, someone else is going to eat your lunch. But we had the world’s first loyalty program in 1958, which was Canadian Tire ‘Money.’ It was a great program and continues to be a great program. I think if we had wiped out paper Canadian Tire ‘Money,’ Canadians would have been at the barricades. It would have been like the reaction to New Coke. However, we want to become famous for serving all generations. So we kept the paper money, which doesn’t give us any information to better serve our customers, and decided to give them digital offers that will excite them.
You’ve said Sport Chek is your pioneer or “shock troop” division. Was that a consideration you had going in, that if we get this youth-oriented brand, we’ll be able to innovate?
I’ve gotta admit to you—because I try to be totally transparent—that I don’t think we even had a grasp, three years ago, of how much we would do that. The world has changed so much. Paper flyers—especially at Canadian Tire—are a great marketing tool. But the world’s changing. So at Sport Chek, we made the choice to start exiting paper flyers, which was a big decision. And we decided to try digital flyers,but I don’t mean taking the paper flyer and taking a picture of it and putting it online. I mean, disaggregating that flyer and putting a hockey stick on Facebook, the green running shorts on Instagram and using all of the digital channels. We believed, at the time, that it was a more efficient and flexible way to do business. It turns out, at least at Sport Chek, that it is an incredible tool to boost sales. Now we’re seeing it has advantages in other divisions, too.
Such as?
It snowed in Calgary at the beginning of September and our paper flyers weren’t set up for a mammoth snowfall. But Mark’s, which had started adopting digital tools, was able to quickly inform customers: “You need boots? We got boots. They’re in. You need outerwear? We got it.”
There’s more! Read the full conversationat Canadian Business.
