“The Americans are coming, the Americans are coming!” These words have been echoing in the hallways and meeting rooms of corporate and regional offices and store locations of many Canadian retailers for some time. But now two Canadian retailers have formed a strategic partnership that changes the retail landscape in Canada.
In a proactive move to reaffirm their position in the Canadian marketplace, Loblaws and Shoppers Drug Mart (#8 on the Best Canadian Brands list) are joining forces to fight off the likes of Target, Walmart, Costco and Whole Foods in the über-competitive and converging grocery, drug and mass retail segments. This merger comes hot on the heels of Sobey’s announcement last month to buy the Safeway operations in Canada thereby achieving a long sought-after coast-to-coast presence.
What does it all mean for brand managers and customers?
Two words: relevance and presence.
While the complete integration plans of Loblaws and Shoppers are as of yet unknown, we know that the President’s Choice brand will be on Shoppers’ shelves and Life brand will be on Loblaws shelves as soon as possible. Longer term, we foresee the proliferation of the store-within-a-store retail trend, with Loblaws and Shoppers Drug Mart co-existing in a single, seamless retail experience.
But before Loblaws and Shoppers can integrate effectively, they need to take stock and inventory of their current brand portfolios. They need to understand how their respective portfolios complement or overlap each other. More critically, they must analyze and assess how the new brand portfolio will fit with consumers’ ever-changing needs, desires and decision criteria. This will allow the newly combined entity to determine which brands are relevant now and in the future, and which ones need to be repositioned or retired.
It’s tempting to assume that a combined Loblaws and Shoppers will provide consumers with less choice. However, the recent expansion plans announced by Walmart, Costco and Whole Foods coupled with the current opening of 124 Target stores across Canada should continue to give consumers plenty of choice. In addition, the Shoppers presence in urban centers will give the newly combined company the platform to deliver greater assortment and convenience to the growing small-urban sector.
All of these brands offer a combination of grocery, drug, fashion, home and general retail items for consumers. If all are expanding through new locations or the store-within-a-store concept, the role that brand plays in attracting and retaining customers becomes even more crucial. With more superstores offering virtually everything, consumers won’t split their spending decisions across so many brands. As a result, brand managers and the broader organization gain access to an ever-expanding wealth of consumer data. The entire organization - not just the brand managers – that can harness this “big data” to uncover consumer insights and ultimately translate the insights into meaningful and relevant brand experience will be able to drive choice and engender loyalty with consumers that have more choice and more convenience than ever before.
By joining forces, these Canadian retail stalwarts are strategically responding to changing consumer and marketplace dynamics and positioning themselves for even greater success in the future. The Americans aren’t just coming – they’re here. And they’re committed to Canada. This is the start of the next Canadian retail revolution.