Is the Canadian Puzzle Solvable?
TORONTO — For a good many years, I’ve periodically covered the Canadian catalog/direct/multichannel market — all, of course, from a U.S. perspective. Dating back to the early 1990s, I reported on catalogers’ experiences in expanding into Canada, usually focusing on brand-new efforts.
More often than not, the results looked encouraging, the outlook appeared great. Most surveys showed that Canada was the number 1 logical choice for international expansion among catalogers. Yet, here we are in 2007, and finding catalogers that do any sort of truly significant business in Canada is just about as challenging as getting a ticket to a Stanley Cup playoff hockey game this week in Ottawa, Calgary or Vancouver.
I was invited to give a presentation at the April 16-18 Direct Summit in Toronto, a catalog- (er, “catalogue”) focused conference staged by Canada Post Corp., a multiple services firm that, among others, is Canada’s sanctioned postal service. My presentation focused on the U.S. catalog market. But knowing that some U.S. biggies, as well as some larger Canadian catalogers and retailers, would be in attendance, I went for the duration of the conference.
Marketing execs from L.L. Bean, Crate & Barrel and Orvis were there. So too were some key Canadian multichannel retail execs from Sears Canada and Hudson’s Bay Co. I wanted to come back from Toronto knowing why the Canadian catalog/retail/multichannel market remains so hard to crack for most U.S. catalogers.
The Key Issues
The biggest issue for U.S. catalogers is the expense of cross-border shipping. Customs and duty charges and expensive shipping costs turn Canadian consumers off. Couple that with the fact that merchandise return rates are considerably higher in Canada than in the U.S., Martin Queen, Sears Canada’s national logistics manager, told me.
That’s probably why only a few mostly bigger names, such as L.L. Bean, have had any success. But it’s hardly been overwhelming. (At about $30 million, Bean’s Canadian business, which is entirely catalog/Web, still represents a pretty tiny portion of the company’s sales.)
