BrainTrust Query: Who says Canada is the 51st state? Not retailers.
I was perusing the Globe and Mail and came across a few articles about U.S. retailers coming to Canada. For those of you in the know, Toronto just got its first J. Crew store and Torontonians were in great anticipation of its arrival. Toronto is now home to a slew of American brands such as J. Crew, Victoria’s Secret and, coming soon to a power center near you, Target.
We Canadians up here in the tundra love American retailers, and most will have a story to tell you. Mine involves my wife finding a $1.48 dress on Target’s clearance rack at Sawgrass Mills in Florida.
Why do we love American retailers so much? Simple: because of what they do in America. We love sneaking across the border and doing some day-shopping or hitting the stores we love in South Florida, Las Vegas or Scottsdale while on vacation. So, why shouldn’t American brands come to Canada and let us have what we want? From an expansion point of view, Canada is a great market — decent economy; homes still have their value; credit is still available. The problem lies in the execution, and I can tell you, I am not impressed.
Getting back to J. Crew, for some reason, planners and directors felt that Canadians won’t mind paying 15 percent more for its items, nor would they mind paying duties and taxes on online purchases, making it closer to 50 percent more. J. Crew eventually backtracked on the higher prices, but the question remains: if our dollar is close to par, what drove the decision to charge our polite population more than our U.S. friends? Is this the way to start a relationship?
Then we have Target (or soon will) — finally, a mass merchant that sells semi-decent products at semi-decent prices.
However, I hate to be the bearer of bad news but, according to an inside source, Target is simply rebranding the existing Zeller’s locations. Aside from some minor cosmetic and plan-o-gram changes, there will be nothing new — same (presumably) unmotivated and disgruntled employees, same weak merchandising allotment and same uncompetitive pricing. Canadians aren’t getting the same Target products as our southern neighbors, we aren’t getting the same deals — and we aren’t getting Diet Cherry Coke!
Even our Walmarts are lacking in the ‘explosive savings and experience’ department. I feel like I’m actually saving money at a U.S. Walmart where, here in Canada, I don’t. (I do not consider two cents less than their competition saving money to live better.)
Best Buy, Victoria’s Secret (according to my wife), Williams-Sonoma, Pottery Barn and others are guilty of offering something less than their U.S. locations.
So I have to ask again, what’s so different about the Canadian consumer? Yes, we are different. Yes, we are conservative. Some of us even fulfill the “Canadians are polite” stereotype. But we aren’t stupid.
- J. Crew’s Canadian shoppers balk at higher prices – The Globe and Mail
- J. Crew backtracks on higher Canadian prices – The Globe and Mail
Discussion Questions: What do you believe is behind U.S. retailers’ strategies (allegedly) of offering different products and higher prices to Canadians? Do you believe there are differences between Canadian and U.S. consumers that warrant different merchandising and pricing approaches?