Learning From Americans

No, this article isn't about health care, gun control or politics. It is a collection of ideas from my travels across the continent. This year, I have spent over half my time in the US learning from retailers. It is easy to think that we have very similar business styles and admittedly, I believed that when I first started working on Sequel's US business in 2007. However, over the past three years, I have noticed slight differences in the way the US retailers operate compared to us here in Canada.

Courage to admit you don't know

I don't know how airplanes fly. It is amazing with the amount of flights I have been on that I really don't know all the points that make it possible. It isn't realistic for me to understand all the points, so every time I fly, I ask different questions of the experts to better understand how it is all possible. This seems like a simple concept, but how often have you consulted a marketing expert about your promotional efforts? Or a store designer on the layout and flow of your store? It always amazes me when visiting a US retailer how many consultants, or high level talent they have working with them. Remember though, experts are not there to tell you what to do, but provide an education and insight to help you make better decisions. Remember to always trust, then verify, that it is true.

World domination

This is probably the starkest difference. The US mentality is to be the best or the biggest at any cost. This translates right into their retailer operations. Think of Home Depot, Costco, Wal-Mart and Whole Foods Market. None of these retailers are init to just sell hardware or health food. They operate to be the number one retailer and dominate the landscape. This permeates down to every retailer that I talk to; they are there to be number one in something. Whether it is selection, price or locations, it is a constant battle with their competition to take market share. As Canadian retailers, we need to adapt to this un-peaceful co-habitation with our competitors. As more US retailers in the health food space move to Canada, we need to fight back with the same aggressive mentality. I suggest you take inventory of what you are the "best" at and expand on it. Understand who your customers are, and understand who your competition's customers are. This will give you the information needed to make decisions on how to market your business and what products to carry.

Willingness to take risks

I think we can all agree that Canadians are a little more reserved in our political positions, fiscal policy and decision making. Our cousins to the south do not have as much respect for reserved as we do. This can be seen in their health care and banking. Risk is exactly as it sounds, not guaranteed, and occasionally it fails. However, risk usually means big reward. A prime example is a US retailer named Sprouts that opened in 1999. Since then, they have opened over 50 stores in markets that are dominated by some of the biggest health food chains. It is a risky proposition to be that aggressive with store expansion, but they know what they are good at and have brought in the necessary talent and resources to make it a success. The largest retailers in the US also don't bring in just one or two units of a product. They usually jump into a new product with big end caps and promotions to make it work. Sure, some are not successful, but in making a big splash with new products, they create an environment to be successful.

Partnerships

If you have ever shopped at the Home Depot, you would think that they owned the Behr paint brand. Well, they don't. They do, however, have an exclusive partnership with the brand. This is a prime example of a retailer partnering with a brand to make both a success. Now, this isn't possible in our channel because of the relatively small size, but what I do see happening is US retailers dedicating the largest amount of shelf space to the brands that do the most to drive consumers to their store. You could say shelf space is proportionate to the manufacturer's advertising budget and how much money is spent at the retail level to promote the brand.

Ask your account manager

To take advantage of this idea, look at your store and by brand list the amount of linear feet each has. Rank each brand for the amount of advertising they spend externally in magazines etc, and then rank them on dollars spent at your store. Your account manager should be able to help you with some of the info. Once you have that info, does the shelf space you are dedicating to the brand reflect not only store sales, but their contribution to foot traffic and category awareness?

If we as Canadian retailers can take advantage of some of these ideas, we will not only continue to thrive in the face of increasing competition, but maybe there will be a Canadian business invasion into the US. •