Each week, we seek out expert advice to help a small or medium-sized business overcome a key issue.
When Amy Nichols visited Vancouver three years ago, inspiration struck her. The founder and chief executive officer of Dogtopia, a dog daycare and spa business based in Virginia, noticed how devoted and affectionate Vancouverites are toward their pets.
“I said to myself, ‘Those are our people,’” says Ms. Nichols, who is planning a rapid expansion of her company into Canada. “Our customers are very committed to their pets and highly educated.”
Vancouver was an easy market to add to the company’s list. But Ms. Nichols and her team have had more difficulty picking locations for several of the planned 35 Dogtopia franchises in Canada.
Over all, she senses a big opportunity. Dogs can be found in one-third of Canadian households, according to Ipsos Reid, and Canadians spent $6.5-billion in 2012 on their beloved animals, according to the Pet Industry Joint Advisory Council of Canada.
Last year, sales from Dogtopia’s 29 U.S. locations amounted to more than $14-million (U.S.). Clients drop off their dogs for care that includes exercise, gourmet treats, shampoos and even pedicures. When owners leave for vacation, Dogtopia provides overnight stays in accommodations far more comfortable than a kennel.
Though dog lovers share similar qualities wherever they live, Ms. Nichols knows that Canadian regional and cultural differences must be respected.
“It’s always very different when you go into another region, and Canada is even more unique because it is another country,” she says, adding that Dogtopia is aiming to find a local owner for each franchise. “We see the value of having a local developer, knowing there are subtleties in different states and provinces, and on the different coasts.”
Ms. Nichols has partnered with Peter H. Thomas, a British Columbian and founder of Century 21 Real Estate Canada, to devise a strategy. Dogtopia also has hired the research company Environics to produce a demographic study to help plot out the locations. Still, the company’s goal is to spend less than 18 per cent of the projected revenue in each location on a commercial lease; that figure has proven to be key to the financial success of Dogtopia’s U.S. operations.
Finding Canadian sites that match that criteria and also meet the demographic profile has been difficult. In the U.S., most of the Dogtopia locations are in the suburbs. With Canada’s population based around its major cities and its distinct cultural differences, the company is carefully scrutinizing the locations during its expansion plans.
The Challenge: How can Dogtopia expand into Canada while preserving its profitable franchise strategy and brand?
THE EXPERTS WEIGH IN
Joey Caturay, president of the advertising agency Little Room, Toronto
Canadian consumers are in general more contemplative and conservative than their American counterparts. My advice to Dogtopia is that they err on the side of caution for their customer acquisition projections. They can accelerate their acquisition rate through a dog-lover community outreach program before they launch their service.
They can tap into a wealth of local dog demographic information through social channels and local blogs related to dog walkers and breeders. Commercial websites, such as petpriority.ca, offer “DRM” systems: dog relationship management programs that may be used to survey dog owners.
For triangulating franchise locations, look for maps of dog off-leash facilities offered by major Canadian cities. This, combined with the demographic information, should produce a short list of viable locations.
Iveta Koskina, financial planner, Investors Group, Toronto
Pets are difficult to entrust into anyone else’s hands. And Canadians like supporting Canadians. With that in mind, here are a few suggestions that will help Dogtopia win over Canadian hearts.
Through marketing or while creating rapport with consumers, support Canadian culture. Know the cultural symbols and how to incorporate them in a campaign that will find emotional engagement. Understand the topics that create regional pride and also become aware of interprovincial differences.
Canadians are becoming more and more health conscious, which also means they will demand that their pet’s nutrition is of top quality. It will be a good idea to have different choices of “menu” items at the Dogtopia centres.
Once the trust and emotional bond has been made with the brand, the location issue becomes less difficult. As long as clients know there is an element of fun, safety, exercise, good food and top-quality care, they won’t hesitate to make a drive to entrust their loved ones to Dogtopia.
Brooke White, vice-president of corporate communications for Nordstrom Inc., Seattle, Wash.
(The U.S. department store Nordstrom is expanding to Canada with five locations, the first of which is planned to open in Calgary in fall 2014.)
We wouldn’t want to give advice to another company because we wouldn’t want to think we are experts at this. What we do believe in is listening to customers, finding out what it is they want and how we can best serve them. We’re taking the lead from Canadians. For example, all the customers we’ve heard from have made it clear they don’t want “Nordstrom lite” – they want what the large stores in the U.S. have and we’re working to give them just that.
THREE THINGS THE COMPANY CAN DO NOW
1. Use demographic information on the Web to spread the word and find customers.
2. Develop marketing tactics that will resonate with Canadians no matter where they live.
3. Listen to what Canadian customers want.
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Special to The Globe and Mail
Interviews have been edited and condensed.
(Correction: An earlier version of this story mis-attributed the statistic about dog ownership in Canada. It came from Ipsos Reid, not Statistics Canada.)