Canadian Tire FAIL

With very little fanfare or notification, Canadian Tire, a Canadian Institution for going on 87 years, put a notice on thier website that they would be ceasing all internet sales activity on January 29th 2009.

On it’s own, this is a non-remarkable announcement.  Put into context of the current state of the global economy, the trend to move toward internet sales and the sheer massive distribution capabilities of this home service giant, this becomes a rather remarkable announcement.

From where I sit (and this is my blog so I can sit wherever I want) I see massive loss of opportunity here that Canadian Tire seems to be giving up.

I’m sure they have had a long and hard look at the numbers and the effort required to run an online shopping experience.  They probably had a lot of high priced consultants come in and run various scenarios and advise that there was limited opportunity given the current economic downturn in the marketplace and that the best option was to abandon the online store (because someone on high really ultimately wanted to hear that message).

Lets take a look at some of the outsiders viewpoints and see if they make any sense shall we?

Managing product in a warehouse or via drop shipping is a more cost effective means of managing margin.  There is no need to do massive distribution chain to stores for products sold online as they can be shipped from the warehouse or direct from the manufacturer if the model allows.  Look at Amazon.  Do you think they keep millions of copies of titles in stock?  Nope.  They keep a few in stock and request more from the printer or publisher when they are required.  They have centralized distribution and warehousing to facilitate easier pack and pick operations and aggregated shipping.  Now I’m not saying that Canadian tire is Amazon but there are opportunites to learn from the likes of Amazon to build a more efficient distribution model for online sales.

Canadian Tire did little in the way of driving customers to the website.  A little footnote at the bottom of the page on a flyer is insufficient to advise subscribers that they can buy online.  There was also no incentive to purchase online.  I can’t recall ever seeing a “Web Only” deal that required a customer to purchase an item through the website to get some great deal.  Most successful online store have a daily door crasher that can only be purchased from the web.  Dell, Newegg, Home Depot, The Source, The Bay, FutureShop, Best Buy, etc… It keeps people coming back for more.  Canadians love a good deal and with Canadian Tire’s penchant for taking that 3000 piece socket set that you absolutely must have and marking it down by 75% to the low low price of $67.95 there had to be some opportunity to leverage this daily deal mania.

Canadian Tire also did something that most people (at least in the online community) feel is an act of cowardice.  They did not issue a press release or notify the media, they simply and quietly put a page on their site advising anyone who happened to click on it that this action was happening in a matter of weeks.  This type of approach to online marketing and treating your online customers with little respect is probably the main reason that the online store concept failed at Canadian Tire.  They just didn’t *get* the opportunity.  They assumed, like most noobs, that if you put the page up, people will automatically flock to it ‘For Great Justice’ (sorry, got a little ‘All Your Base…’  there).  This is a rookie mistake and one that should have been dealt with a little more effectively by a company with the pedigree of Canadian Tire.  They didn’t give the online store the proper care and feeding that it required to flourish and become a great presence in Canadian Online Retail.

There are many opportunities for companies with an online presence to advertise such presence via traditional media to drive traffic.  The old guard at Canadian Tire forgot to include the online presence in these media spots when placing the million dollar ad buy’s.  I guess that Canadian Tire did what so many Canadian companies are so great at.  They built a great product/service but didn’t tell anyone about it and then stood by scratching thier heads wondering why it was not a great success.

Here is my view of this act of cowardice as told by the fine cast of Zero Wing . The names have been changed to include… You 🙂

Computer: Main screen turn on.
You: It’s you !!
CT.com: How are you gentlemen !!
CT.com: All your base are belong to us.
CT.com: You are on the way to destruction.
You: What you say !!
CT.com: You have no chance to survive make your time.
CT.com: Ha ha ha ha ….

Sorry couldn’t resist.  It just seemed to fit.

Matthew Ingram said it best on Twitter today ‘I love how Can Tire tries to sell it “You’ve told us how great we are… so we’re making our site even less useful”

For those of you who are interested, Here is a screengrab of the impending shutdown notice.

Captured from Canadian Tire Website Jan 21, 2009

Captured from Canadian Tire Website Jan 21, 2009

have to go and see how I’m stocked for Socket Sets.  I think I’m running a bit low.

Update Jan 21:added image of Can Tire message. fixed typo’s

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4 Responses to “Canadian Tire FAIL”

  1. Lisa Says:

    Hello,

    I work in communications at Canadian Tire and thought I would take the opportunity to reply to some of the comments on your blog.

    canadiantire.ca continues to be one of the busiest sites in the country with online traffic growing significantly over the past few years. The decision to discontinue home delivery of online products had nothing to do with cost-savings as some media outlets have alluded to, but had everything to do with our customers and what they were telling us they wanted from our site.

    The reality is that the overwhelming majority of traffic to our site was research-based, people looking for more information about the products we carry. After researching and reviewing tools such as our Rate n’ Review of products, the majority of customers would then drive to one of our stores to make their purchases. Only a small minority were actually using the site for online shopping.

    As a result, it made more sense to reallocate the funds to develop new capabilities and features that would create an even more compelling experience for our customers and ones that they would value. Let me assure you that Canadian Tire remains committed to its online offering and to making the site more informative and exciting for our customers.

    With respect to the communication around this decision, we again were focused on our customers. We felt direct communication with our customers, in particular the users of the site, was personal and preferrable. In addition to the posting that you saw on our website, we also sent letters to those with online accounts letting them know of our decision.

    As a retailer who has been around and grown significantly over its more than 85 year history, I can assure you that the decisions we make are made only after extensive research and are based on feedback from our customers. We are excited about the new capabilities and features we will be able to bring to our online experience.

    I hope my note addresses some of your concerns.

    Thanks,

    Lisa

  2. cglynne Says:

    Hi Lisa,
    Thank you so much for responding to my post regarding the Canadian Tire webstore.
    You raise some very interesting points that illustrate that there was some thought behind the closure of the Candiantire.com webstore.
    I respectfully maintain that there was not enough effort applied to drive traffic to the site and encourage customers to purchase from the site as opposed to going to the local store to pickup a product. By leveraging simple marketing tools that drive traffic to a webstore with web-only sales offerings, many brick and mortar store in Canada and the US have been able to survive and even thrive in both mediums. I have shopped at Canadian Tire for as long as I can remember and there was no specific incentive for me to purchase a product from the website that I could drive to the store to purchase. This is supported by your research but is not indicative of a customers desire to purchase a product online.
    With web sales and distribution, there is a cost savings that can be passed along to the customer which provides incentive to make use of the web as a shopping tool. Agreed, as consumers are becoming more savvy, they are increasingly using the web only as a research tool before venturing out of the house to buy a product, as supported by your research. Given the right opportunity though, consumers are more willing to purchase a product over the web as I have indicated previously, which you make no mention of in your response.
    It will be interesting to see how/if the new site features can add value to the online experience and I wish you nothing but success.

    Again, thank you for your comments. They are very much appreciated.
    Chris

  3. David Suydam Says:

    As a longtime Canadian Tire customer and fan of online shopping, I find I must agree with you Chris. Shutting down online sales to focus on a better browsing/research experience seems to miss the point. WHY DON’T customers like to use canadiantire.ca for online shopping?

    Rather than dropping online shopping entirely, wouldn’t it have been worth it to figure this one out? Was it a poor online experience that resulted in so few conversions? Canadian Tire’s policies for shipping and returns? Too expensive shipping? Lack of online incentives?

    Lisa, as Chris rightly points out, there are so many examples of retail stores whose ecom sites have done well.

    Growth in Canadian online sales through to 2007 was stellar. Yes, e-commerce spending was down 3% in 2008 (can anyone say recession?), but this still represented $25.5 billion during the Nov. 1 through Dec. 23 Christmas season. While J.C. Penneys, Toys ‘R’ Us and Circuit City were all down, and Best Buy was essentially flat, red-hot Apple.com, Amazon.com, Walmart.com, and eBay were all up significantly.

    Which makes me think that even in a recession, people enjoy shopping online. During a recession they are flocking to hot products and discount chains, but are still buying from many other e-commerce sites. Why can some stores make it work, while others can’t? It’s not all about expensive shipping for patio sets – there must be another reason why customers don’t like to shop on candiantire.ca.

  4. MicidHey1 Says:

    Interesting write-up. Thanks for sharing


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