Why Brands Like Canada Goose Are Opening Retail Stores

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In late May, Canada Goose announced its plans to open two of its first retail stores next Fall—in Toronto and New York City. The new stores are supposed to deliver an experiential environment featuring the company’s heritage and culture, a full assortment of all seasonal collections, and world-class service (Canada Goose Press Release, May 26, 2016). This move into brick-and-mortar follows the successful launch of the company’s U.S. e-commerce site in September, 2015.

A Global Phenomenon

Over the years, we’ve observed a growing global trend of brands “going retail” – either by opening physical or online stores. Canada Goose is yet another example, joining the ranks of U.S. brands Nike and Under Armour; the Swiss chocolatier and confectionery company Lindt & Sprüngli; RITUALS, the Holland-based luxury lifestyle brand; among many others.

J.C. Williams Group’s and Ebeltoft Group‘s latest report, Brands Going Retail, based on extensive research across 22 markets globally, dives more deeply into this trend.

From a category perspective (see chart below), the “going retail” trend is dominated by the fashion, sports and footwear categories, with cosmetics and consumer electronics not far behind.

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While brands opening retail stores is not new, what is interesting is the growing number of online pure players going into brick-and-mortar. (Think Frank + Oak, Warby Parker, and Birchbox.) Their ability to provide consumers with a physical location where they can shop, learn, play, and develop an emotional experience with the brand is an obvious incentive for adopting a “going retail” strategy. J.C. Williams Group is a big believer that brick-and-mortar stores will always have an important place in the retail landscape.

“Going retail” offers brands significant benefits, as we’ve described in the chart below (listed by order of importance).

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Each “going retail” strategy starts with the key objectives that the brand is trying to accomplish. In many cases a company may want to achieve multiple objectives in a retail strategy.

  • Within the first-level objectives (blue), brands pursuing a “going retail” strategy place a high priority on having total control over the marketing, branding, and direct experience of their shopper.
  • The second-level objectives (orange) focus on giving the brand the opportunity to sell a broader range to its customers and increase its direct margins.
  • Lower ranked objectives (green) include more independence from retailers, testing new products, and consumer data collection. This is interesting to note given the influence of Big Data and the importance of customer information to target marketing efforts.

Many Paths Can Lead to Retail

Paths to market now are more varied than ever before. Retailers can pursue alternative retail avenues and brands can move toward developing an e-commerce platform or choose among diverse physical options, ranging from a full-blown flagship store to pop-up shops. While the right retail approach depends on the brand’s strategic objectives, here are a few points to consider:

  • Culture before competence. Make sure retail expertise is anchored within your organization through people, structures, tools and interfaces.
  • Strategy before structure. The chosen strategy should drive decisions on organization and human capital, not the other way around.
  • Define relevant KPIs and let your retail people do their job. KPIs should include a mix of retail and brand metrics, so that all the direct channels are fulfilling their objectives.
  • Think omni-channel right from the start. The likely answer to any future brand’s “going retail” strategy will require solutions that span various channels and routes to market. There is no “one channel fits all” answer. And, the new consumer will demand it.
  • Have the right assortment and range. Many brands have the luxury of being a niche within a larger multi-branded retail space. While successful in this type of environment, they may not have a robust enough range to succeed in a direct channel.
  • Be consumer-centric. Most of all, remember the purpose of a retail store, channel, or website is to fulfill a consumer need.

To learn more, download the report Brands Going Retail.

Is your business missing out on this opportunity? Contact Maureen, Suthamie, or John at 416-921-4181, or Jean in Montréal at 514-781-5429. You have questions…we’ll have answers!

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