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.
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
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.
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
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?
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
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