Canadian Chain Counts on Canadians’ Loyalty
There’s no doubt that Canadian consumers are different than
Americans.
Here in the U.S., consumers have shown a willingness to throw off "Made
in America" products and local retailers for a better deal. Now, as retail
chains from the U.S. and elsewhere look to Canada as a growth market, will
Canadians stick with their own?
Robert Dutton, chief executive officer of Rona,
the largest home improvement retailer in Canada, thinks they well.
In a speech
to the Economic Club of Canada, Mr. Rona said that high unemployment in the
country due to the recession has made people "more conscious" about
supporting homegrown companies.
That consciousness, according to a Canadian
Press report, also seems
to have extended to Mr. Dutton’s company.
"That’s the reason we’re working so hard with Canadian suppliers — because
we have to preserve the jobs here in Canada not only in retail but the real
good jobs — well-paying — in the manufacturing sector," he
said.
Mr. Dutton said Rona has managed to grow its share of market despite the
presence of American rivals, including Home Depot and Lowe’s.Â
"In 2010 our share of the Canadian market was higher than Lowe’s
and Home Depot’s combined," Mr. Dutton said.
Rona is looking to grow
its share of the home improvement market through acquisitions.Â
In a speech
made in January, Claude Guévin, executive vice president
and chief financial officer for Rona, said, "For a good decade now we’ve
been the market consolidation leader in Canada. We intend to bank on that leadership
and to make the most of this strategy. Our long-term objective is to have one
square foot of retail space for every Canadian, increasing our market share
from the current 19 percent to 25 percent."
Discussion Questions
Discussion Questions: Is local or national pride messaging a winning marketing strategy for retailers and/or brands? As a result of the recession, are consumers more likely to support companies that create and keep jobs at home? Will U.S. retailers meet resistance in their expansion efforts into Canada?
You know, I reject the concept that US consumers have a willingness to throw off “Made in America” products and local retailers for a better deal.
Local retailers, maybe? But made in America? Frankly I don’t see that retailers are giving consumers a choice (with the exception of autos, and I’m not prepared to go there yet). It was not consumers who systematically moved all product production off-shore. And in any case, perhaps if they had realized buying the “lowest price” was a bit like cutting off the same branch they were sitting on in a tree, they might have thought better of it.
I think at this point, we might well buy more “Made in America” products if they were equal quality with marginally high prices.
I recommend Canada, hold firm. The road away from domestic production is the road away from a balanced and recoverable economy.
The answer to the broad question is “yes” with examples ranging around the globe from Superquinn’s highlighting items sourced in Ireland on its register tapes to Walmart, et al’s “Made in America” campaigns.
There are even more localized examples such as Chrysler’s latest “Imported From Detroit” campaign.
That said, Canada is a bit unique in that Canadians have always been sensitive to the self-perception that they lived in America’s shadow and were victims of commercial colonialism in the form of U.S. brands and media. I suspect it’s a problem more aggravated by the fact that, with the exception of Quebec, the language is essentially the same so brand messaging doesn’t go through any filters as it crosses the border.
That collective national concern with “Canadian content” in media, the arts and almost all aspects of life has to have a commercial dimension and–yes–in tough economic times people like to at least try to support home grown brands assuming they come close to representing equal value.
“There’s no doubt that Canadian consumers are different than Americans.” THANK YOU George!
With all the marketing analysis going on it is still surprising how few US operations understand what George is telling us. One company set up a Canadian operation and still used the Statue of Liberty as it’s logo. At least they could have used the CN Tower or the Stanley Cup!
I do believe Canadians will evidence a ‘local first’ mindset and it will pay off incredibly for the economics of the country. You can see that already in the health of Canada’s economy–which remains one of the world’s strongest in spite of a looney political scene. Unfortunately too many of us who live in the US have a ‘look out for #1’ mindset, regardless of the economic implications for the bigger picture.
As a dual citizen I almost have to maintain two personas in crossing the border. All that said, there are significant pluses on each side and I value both greatly.
Let’s start by reminding everyone that I’m a Canuck (Canadian for the uninitiated) and live in Canada.
As my grandfather would say…poppycock! Loyalty to a retailer based on the fact that it is Canadian is as common as customer loyalty to any store. Loyalty exists only until something better comes along.
Canadians fell over themselves to give Walmart and most every other global retailer their hard earned money when they set up shop here. We ‘lumberjacks and hockey players’ aren’t much different than anyone else…give us a better deal or experience and we’ll give you our money.
American retailers have been very short sighted in not building and maintaining a built-in-America Strategy. With a little education, smart sourcing and marketing, some retail group could build a strong position in the market.
When it comes to Canada, national pride and not wanting to become the 51st state is going to help Canadian retailers and manufacturers retain a greater share of their market.
As a Canadian, I confirm the recent push by American Retailers into Canada is a concern to…Canadian retailers! While a Canadian-owned retail store has a small home turf advantage, that advantage is thin if the value proposition is not on par with any American counterpart. In fact, many Canadian customers welcome US retailers as a way to increase competition and drive-down prices (we often pay more than American customers for the very sames goods and services).
I further believe that an American retailer can do very well here if it adapts to local tastes and demonstrates it is part of the Canadian cultural fabric and local community. US retailers have a bright future here and I believe they are generally welcome.
For decades, I’ve seen U.S. industries try to protect themselves from cheaper imports with such slogans as “Crafted with Pride in the USA.” And for decades, I’ve seen these industries consistently lose share to cheaper overseas suppliers. I recognize that the Canadian consumer is different, but I have difficulty coming around to the idea that they’re THAT different. When push comes to shove, most people everywhere seem to go for price, unless there’s an obvious difference in quality/value. I don’t see that changing.
I’m going with Kevin on this one. If there’s two products on the shelf, without any discernible difference in features or performance and one simply happens to be made in Canada, the Canadian consumer–like most consumers anywhere else–will check the price tag.
Made in Canada (to a Canadian) is often code for “more expensive.” Sad but true.
The greater portion of consumers, whether American or Canadian, are focused on one thing and one thing only–a good deal.
Retailers in North America know this and the drive to lower prices is what helped those who have survived grow. Walmart grew to its dominant size, not by catering to those who “have,” but by catering to those who “have less.”
They found, in the process, that it wasn’t just those who have less who liked a good deal and subsequently sought to drive down prices in across all categories of products as demand and their business grew.
Never ending demands of their supply base to lower prices was a key factor in the drive towards off shore production of goods formerly made in the USA. Walmart attempted, early on, to counter this with their own “Made in the USA” program and openly encouraged their buyers to “Buy American” where they could. As a former buyer for Walmart, I can tell you that this was pursued in earnest but that the competitive environment within the industry made it nearly impossible to maintain these programs when your competition was able to undercut your prices with imports.
Consumers in Canada may like the idea of buying Canadian (Just as countless polls in the US have shown) but they are just as unlikely to support this idea by actually spending more on Canadian made products.
Unless US and Canadian economies become less consumption driven then the lofty ideals of buying locally or nationally made products over imports are unlikely to take hold.
It makes good press but can come back to bite you when the reality of consumers purchasing decisions select for lower priced imported goods.
Let me take a tangent to disagree with Paula. It is neither the retailers nor the companies who have systematically moved production out to the U.S. It is the consumer, because the consumer wanted better products (autos), cheaper products (TVs), more features (mobile phones). American companies could not keep up in terms of cost, quality or technology. And certainly, the consumer should not support any product (Canadian or American) that doesn’t deliver what the buyer wants.
Fortunately, there are enough Canadians in this discussion to bring it back to reality. A marketer would be hard pressed to find anywhere in the world where the consumer paradigm of cost, features and quality doesn’t trump the flag waving. The growth of global business has been astounding. It wouldn’t exist if patriotism came first.
If Robert Dutton is going to continue to be successful in Canada, it is because he is running his business well, not because he is Canadian. (And he is putting his business at great risk is he is filling his stores with Canadian products, just because they are Canadian while Lowe’s and Home Depot fill their stores with the best products, Canadian, American or otherwise).
Teeing off of national pride is a viable form of marketing the brand and its products, especially among older consumers and blue-collar consumers. But, it can’t be the sole form of marketing the brand because that’s becoming an increasingly difficult hill to climb. For example, “Made In America” messaging is likely to resonate less with younger consumers, at least here in America, in part because this is a more global consumer compared to other demographics.
Re: the recession’s impact, it cuts both ways. For example, among blue collars, a brand message about buying American-made product to keep America economically strong is one that is likely to resonate. But then, consumers are more value focused now, which may lead them to products that cost less, in part because they were made in foreign lands.
One thing touting national pride is unlikely to ever do is hurt the brand. The question is how much it can help the brand, especially among consumers who are increasingly aware that they live in a global economy and that it’s near impossible to buy only product made in their home country. In other words, Rona won’t take any hits for its current homegrown messaging. But I don’t see Canadian national pride being a major hurdle as US retailers look to expand into Canada.
“There’s no doubt that Canadian consumers are different than Americans.”
With all due respect to George (and Ian), there must be SOME doubt, or we wouldn’t be discussing the issue. I don’t think the problem is so much Canadian vs. American (or elsewhere) retailers, as it is smaller vs. larger ones; and, for the obvious reason of a larger market, American retailers tend to be bigger than their Northern neighbors. Being a national icon has both advantages and disadvantages as well: assuring a stable customer base initially, but encouraging complacency and sharpening generational differences in the long run…just ask someone who frequented Eatons.
The message is an acceptable and effective part of branding communications as long as “nationalism” and “pride” are not positioned to cover for poor quality, pricing, or service.
All things being equal, we need to keep more economic value in the US and I don’t slight the Canadians for adopting a similar approach.
Let the competition begin!
The ad campaign that came closest, imho, to reinforcing “buy American” was the “Look For The Union Label” campaign from the Garment Workers years ago before that union began largely assembling garments from imported fabrics. Unions couldn’t get away with that today, given the political climate and legal probes of unions, but wouldn’t it be great if the Obama Nation spent a few of our dollars to launch a superb campaign to support American manufacturing? I mean a really great, well-funded campaign from a top-notch agency or agencies. As a veteran of campaigns for (dancing) raisins, the incredible edible egg, beef – it’s what’s for dinner, Idaho potatoes, California wine, Oh Thank Heaven for 7-Eleven, and pork – the other white meat, I am confident that our ad agencies and media could produce and broadcast an outstanding commodity campaign for American products. Plus, it would create private sector jobs in the ad industry and beyond, an interesting way to spend our tax dollars instead of creating jobs in the public sector.
And go viral! Reward folks who create innovative YouTube stories and music supporting American production. Where is Rosie The Riveter when we need her? Is this a corny idea, too old-school for consideration? Not if it’s done right. Let the Xs and Y’ers have full rein and reign.
To address the question posed, consumers will support companies that create and keep jobs at home if they have a frame of reference. We simply are unaware of where the content of the products we buy are produced. Country-of-origin stickers on imported fruits and vegetables represent the most basic application of this idea, but they are still sketchy in delivery. And domestically, California-grown strawberries are showing up in D.C. supermarkets labeled “locally grown.” What’s the definition of “local?” Toyotas are built in the U.S., but with parts from all over the globe. These are U.S. jobs, but not necessarily U.S. content. John Deere and Caterpillar come to mind as true-blue U.S. jobs-and-content manufacturers, and there are others.
Of course, it would be naive to ignore other aspects to this discussion. A prominent one is our balance of trade with China and our administration’s inability to create a level trading field with that nation. So, the offshore goods flow in. We allow General Electric to hide income offshore to avoid taxes. A simple ad campaign can’t solve these problems and many others, but as a friend of mine who hates saxophones said of a saxophone at the bottom of Lake Michigan, “it’s a start.”