Canadians plan to spend an average of nearly $600 on this year's holiday shopping, 8 % less than last year, yet more than half (51 per cent) expect to go over budget in the exuberance of the festive season, according to an Angus Reid poll for CIBC.
Quebeckers continue to be the least inclined to spend on holiday shopping with an average of $406, down from $450 last year.
Interesting look at Lowe's plans in this exclusive interview with the head of Lowe's Canada, Sylvain Prud'homme, in a recent issue of Québec business publication Les affaires.
Objective is to double net profit of the combined Lowe's/Rona business by 2021.
A new operational structure around four divisions with separate P&Ls; big box format, neighbourhood stores, pros and contractors, affiliated stores.
A decentralized structure to cater to regional differences leveraging the retailer's extensive database.
Multi-million dollar investment in e-commerce. According to Prud'homme, online sales do no negatively impact in-store sales - quite the contrary. In the home renovation sector, the web is only the starting point to a bathroom renovation project where shoppers may choose a bath and a sink but eventually visit the store to confirm their choice, get tips from store personnel and complete the project with additional purchases.
Rona signs won't soon disappear from Québec's landscape but Lowe's signs will very likely appear in the province over the next few years. Let's see if the retailer decides to drop the apostrophe as Tim Hortons did when it entered the market decades ago.
Rona may have been struggling in recent years but it remained a jewel and a source of pride for Québec Inc. This pride in being Québécois (and Canadian) ran deep. And Rona flaunted it to differentiate itself from U.S.-owned competitors.
In the days following the announcement that Lowe's was acquiring Rona, signs in and out of stores were still up touting Rona's Canadian pride.
We offer a wide selection of Canadian products.
Because we are proud of being a Canadian-owned company.
Shop at Rona and you'll be served by "The Canadian How To People".
I leave it to others (including Québec's opposition parties) to debate whether or not this is further evidence of a disturbing trend of Québec-based companies being sold to foreign interests. For marketers, this change in ownership raises questions from a branding and positioning standpoint. Lowe's has indicated that it intends to maintain the Rona name. As it loses its ability to stress its Canadian ownership and leverage this as a differentiator, will the Rona brand be weakened? Does it matter that a retailer is a proud Canadian?
Canadian products
Country-of-origin does matter, in some cases. Empirical studies conducted over several years suggest that when consumers are aware of certain country characteristics, they are more inclined to use country-of-origin as an external cue in evaluating product quality; think Swiss watches, German engineering, French wines, or Italian garments. However, most studies on the impact of country-of-origin on purchase decisions have been conducted on status and image-oriented products.
Do contractors and do-it-yourselfers care that a drill, a light fixture or roofing shingles are made in Canada? Some might. Studies on country-of-origin have demonstrated that it matters to consumers with ethnocentric belief systems. These consumers are more likely to select locally made products and likely rate their country's products more favourably than those made in foreign countries. In the food sector, many consumers view locally produced or grown products more favourably. For example, the designation Aliments du Québec has become an important brand cue in Québec’s grocery stores. While country-of-origin may matter to some consumers particularly for some product categories like apparel, many researchers believe that the biases are fading as globalization, outsourcing, alliances, technological advancements and other country-specific factors change the image and product quality of many countries.
Canadian-owned
If the perceived quality of Canadian products isn't a strong differentiator, could corporate ownership be? Again, it's unlikely. Take Canada Goose. The iconic Canadian brand was sold to U.S. private equity giant Bain Capital in 2013. It's doubtful that even those who are willing to pay close to a thousand dollars for an Expedition Parka care about the company's ownership. "We’re authentic and we’re real and we’re made in Canada.” declared Dani Reiss, the chief executive officer and grandson of the company’s founder to the Globe and Mail. He added “I think the market’s tough out there, but we’re committed to manufacturing in Canada.”
That's when corporate social responsibility intersects with branding as CSR becomes a bigger shaper of corporate identities. Lowe’s commitment to keep the Rona name in Québec and a head office in Boucherville, Que., and not to shed jobs in the province is now part of the brand. And it matters.
Walmart learned this the hard way twenty years ago when, citing financial reasons, it closed its store in Jonquière near Chicoutimi, Que. after it became the first Walmart in Canada to vote to become unionized. Quebeckers boycotted Walmart en masse. Reputation surveys by Léger Marketing at the time revealed that positive predispositions to Walmart among Québec shoppers had dropped from 71% in 2004 to just 11% after the store closure in 2005. Today Walmart has regained Quebeckers' respect. One of the main reason was the creation in 2006 of the "buy Québec" program that clearly identified products purchased but not necessarily manufactured in Québec. Walmart also prominently featured a Québec supplier of the month in its stores' entrance.
Perhaps as a way to signal to Rona that it intended to enter the Québec market in one way or another, Lowe's made it known last year that it was meeting with Québec suppliers to understand what products they could offer. Whatever the real intention was, it would suggest that Lowe's management understands the value of "buying in Québec". In fact, some of these suppliers might see their market expand given Lowe's North American footprint and the value of the Canadian dollar. Customers may also see lower prices. And employees may have a more stable employer.
Rona may no longer be a proud Canadian but it would be wise to keep acting like one.
According to a survey by digital offers site RetailMeNot, 74 per cent of Canadians in a relationship don't care about receiving material gifts on Valentine's Day, and more than half (53 per cent) prefer sex to a gift. Canadians prefer to spend money on the experience, with dinner at a restaurant being the number one way lovers will be celebrating this February 14.
Judging by this display this week at a Metro grocery store in Montréal, some Quebeckers might also mark the day with dinner at home over a hot pot of Chinese fondue - a kind of French-style hot pot; thinly sliced meat cooked in a beef broth, seasoned with onions, herbs. It's all there, including the fondue pot, the broth, and the fuel.
See this previous post about Quebeckers' Chinese obsession
By Eric Blais
As expected, the Québec government indicated last week its intention to challenge Québec's Court of Appeal's ruling that the province cannot force companies to add a French component to their name.
UPDATE: At a news conference today, Hélène David, the minister responsible for the French Language Charter, said the government will oblige Québec retailers to add French descriptives to their outdoor banners. However, David confirmed Québec has decided not to appeal the Québec Court of Appeal ruling. Instead, it it will change the law at the level of regulations.
Several multinationals took the province to court after they were told by the Office québécois de la langue française to change their names or risk running afoul of the rules governing the language of business in the province. A Québec Superior Court judge sided with the companies, which included Walmart, Costco, Best Buy, Gap, Old Navy and Guess.
I leave it to others to debate whether this should be forced upon retailers through legislation. It's a sensitive issue but one marketers would be wise to consider from all angles before dismissing it as just one more obstacle to overcome when doing business in Québec.
Québec Premier Philippe Couillard was a brain surgeon before entering politics. He could also have been a marketer. This time, the governments appears to be adopting a slightly different tone. The narrative from past government on this delicate issue has often been about protecting the French language and the Québec nation's distinct identity. It still is but Mr. Couillard gave a different explanation for his government's position - one that sounds more like a marketer's viewpoint than a politician's.
The Premier gave the example of Second Cup:
“Everyone knows that they sell coffee, but it’s like this company said, ‘I know where I am, I know what environment I am in and recognize the existence of the French in Quebec.
“We don’t want to erase trademarks – it’s not that Canadian Tire will become Pneu canadien, let’s be clear on that, but it’s a question of politeness.”
A question of politeness
Most companies operating across geographies comply with local regulations while looking for efficiencies. It's not always an easy balance to achieve and Québec, with its many unique requirements, can be particularly challenging. Those who are frustrated by Québec's demand that a French descriptor be added to English trademarks will view this latest move as one more costly irritant.
Others will view it differently. Many already have; through a marketer's lens instead of a lawyer's.
The Premier called it a politesse, a courtesy. The importance of being courteous is nothing new to retailers. Let's stay with coffee. According to the J.D. Power and Associates 2012 Specialty Coffee Retailer Satisfaction Report, staff, more than price or merchandise offerings, is key to driving higher satisfaction among specialty coffee customers. One of the key staff factor is courtesy. It's not a stretch to suggest that adapting all brand touch points in Québec to cater to French-speaking customers can signal a higher level of courtesy, including the sign above a store's entrance.
A competitive advantage
Quebeckers will view a retailer's brand more favourably if it makes an effort to adjust to their needs. For retailers, adding a French descriptor to an English name is a symbolic way to signal that they are catering to them. There is directional evidence of this in the findings from our firm's What Québec Wants™ study. When we asked 3,000 Canadians whether they agreed or disagreed with the statement "I prefer to buy products and services from companies that make an effort to cater to the specific preferences and needs of people in my locality", 63% of French-speaking Quebeckers agreed compared to 50% of Canadians living in the ROC.
There are no doubt cost and operational implications for doing so. When Crate & Barrel added the word “maison” next to its name, it did what many others have done without being forced to. To quote the Premier again, "it said, 'I know what environment I am in" and I will brand myself accordingly.
There is no law forcing banks and other retailers to have signage in Chinese in Markham, Ontario and in other communities across Canada. They do so voluntarily. Clearly, these organizations see it as an investment instead of a cost. Even Québec's Banque Nationale thinks it's a business practice that will help its brand in that community.
Retailers should carefully consider their position on this issue. Rather than look at this as being forced to invest to protect the French language, they should consider assessing how it might benefit their brand to be the more polite one.
Everybody loves a deal no matter what it’s called.
Black Friday, the retailer-created shopping event following Thanksgiving in the U.S., is increasingly popular in Canada.
A survey by New York-based IPG Mediabrands found a staggering one million Canadian workers plan on phoning in sick on Nov. 28 (Black Friday) and/or Dec. 1 (Cyber Monday), the dates of this year’s retail blitz.
According to findings from a survey conducted last year for BMO, 47% of Quebeckers were planning to make purchases on Black Friday in 2013, up from 41% in 2012.
Wikipedia offers this explanation for the name’s origins:
The day's name originated in Philadelphia, where it originally was used to describe the heavy and disruptive pedestrian and vehicle traffic which would occur on the day after Thanksgiving. Use of the term started before 1961 and began to see broader use outside Philadelphia around 1975. Later an alternative explanation was made: that retailers traditionally operated at a financial loss ("in the red") from January through November, and "Black Friday" indicates the point at which retailers begin to turn a profit, or "in the black”.
Whatever the origins, the name is meaningless, if not depressing, in French Québec.
Retailers have been using different French names to give meaning to their sales events. Some call it Vendredi Noir. Others like Banana Republic call it Super vendredi. Some simply call it Méga Vente Black Friday (it should be “solde”, not “vente”). To be safe, Centre HiFi calls it Vendredi noir and Black Friday.
L’office québécois de la langue française has tackled the problem and is recommending Vendredi fou (Crazy Friday).
Montréal’s La Presse is reporting today that the SAQ is exploring the feasibility of setting up shops in Québec grocery stores to sell champagne, vodka, rhum, and other spirits. The 1,500 sq.ft. space, which might be a stretch for retailers to accommodate, would offer between 400 and 500 products.
According to La Presse, the idea for this pilot project came from the Québec City suburb of Ancienne-Lorette where an SAQ branch had to be closed for renovation. The branch was temporary relocated in a nearby Loblaws store. Satisfaction rates reached 86% and traffic in that store increased. While representatives from the SAQ had much to say about their plan, those from Metro, IGA and Loblaws were more circumspect.
In 2009 Telus reportedly paid $28 Million to acquire Black’s Photography - the retailer of photo-related products and photofinishing services founded in 1948 by William Edward and Robert (Bob) Black in Toronto. We soon saw the rather awkward co-branding of “Black’s featuring Telus” and much space being dedicated to cell phones but the store concept remained essentially the same.
Some questioned the wisdom of the purchase of Black’s by Telus and The Source by Bell to expand distribution of cell phones. Blogger Simon Sage wrote “The end result will be that we’ll start seeing Telus phones in Black’s stores, seems like a strange fit to me. I can’t imagine there would be much tie-in with services… What are you going to do, order prints of your mobile photos?”
That’s exactly it.
A new retail format for Black’s just opened on Yonge just up the street from our Toronto office. With a completely new brand identity and design, the space and the staff are welcoming and you know what this store is about. Black’s is still photography, mobile device photography. Think of it as a bricks and mortar cross between an e-tailer of mobile devices and iPhoto print products, with the added benefit of on-site support when your Instagram photos don’t print as you had hoped.
Black’s operates under the Astral Photo name in Québec which Black’s acquired as a way to enter the Québec market - the same Astral that became Astral Media now part of Bell... It’s not known if the new concept will be rolled-out into the Province.
According to PMB 2013 data, 37% of Canadian adults printed photos in the past year but significantly less did so in Québec at 30%. Quebeckers are also less likely to do so in stores than online. While retailers like Walmart, Black’s, London Drugs, Best Buy, Costco and grocery stores like Loblaws are preferred by Canadians in the RoC, Quebeckers tend to visit Caméra Expert, Japan Camera, Jean Coutu, Uniprix, and Future Shop for their photofinishing needs.
Familiprix and its agency lg2 are pushing the envelope with a new spot that aired during the most recent “Bye Bye” - the much anticipated humouristic year-end review on ICI Radio-Canada.
You can view the spot on Infopresse’s site.
For some context about this campaign, here’s a summary of the 2011 CASSIES case study published by STRATEGY magazine:
Situation Analysis:
Familiprix is a chain of pharmacies in Quebec. It competes with several banners, amongst them Jean Coutu, which has nearly half the market share and has been the leader for many years. In the past, Familiprix had delivered impressive results with the “Ah! Ha!” campaign (CASSIES Grand Prix in 2003, Gold for Sustained Success in 2005), but the chain had been absent from advertising for two years. The return to TV was highly anticipated, and the objective over the winter of 2010/11 was to increase sales by 10%, and to attract a new generation of pharmacists into the Familiprix network.
Strategy & Insight:
Although a pharmacy is a health care destination, most banners rely on beauty products, loyalty programs, daily promotions and proximity (rather than the pharmacy) to demonstrate their added value. However, Quebec was experiencing a shortage of family physicians, so there was an opportunity to focus on the Familiprix pharmacist as a health care advisor. But what type of advisor? Familiprix took the pulse of the public and, unexpectedly, discovered that empathy and understanding were by far the most popular requirements in a pharmacist. Professional qualifications were a distant second.
Execution:
This led to two 30-second commercials based on the thought, “We put ourselves in your shoes.” In “Granddad,” three young kids (one gigantic) play horsey, and bounce up and down on Granddad’s back. However, by the magic of television, we don’t see Granddad; we see a long-suffering young pharmacist in his place. “High School” follows the same pattern. A 40-ish pharmacist is part of a gaggle of schoolgirls. He goes to his locker, sees a zit on his forehead and screeches in girlish horror.
Results:
Sales increased by 13.5% in a market that grew barely 2%. In addition, 17 new pharmacists brought their businesses into the chain.
Cause & Effect:
The TV campaign was the only Familiprix advertising effort in 2010 and 2011. No promotion more aggressive than those of the past was undertaken during the campaign. In addition, if anything, competitive pressure increased, with heavyweight and new campaigns from most of the competitive banners.
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