Skip to main content

Alma Obeid, associate vice president of Click and Collect for Canadian Tire, demonstrates the use of robotic tower for e-commerce pick-up orders, at a Canadian Tire retail store in Toronto, on Oct. 29, 2018.Mark Blinch/Globe and Mail

Canadian Tire Corp. Ltd. is betting big on e-commerce – again.

A laggard in online shopping among major chains, the iconic Toronto-based retailer has quietly launched home delivery for its e-commerce business across the country, this month rolling it out in its last wave of stores whose staff pick and pack orders for shipping them to customers.

After abandoning e-commerce almost a decade ago, its approach this time involves integrating the digital and in-store experience so customers can research goods and make purchases however they see fit.

Canadian Tire is wagering it can catch up with rival powerhouses, notably Amazon.com Inc., that increasingly offer many of the same or similar products online plus free delivery with paid annual subscriptions or minimum purchases. The domestic retailer is counting on customers coming back to Canadian Tire for items they can’t find elsewhere, while offering product installation, assembly and other “white-glove” home-delivery services for additional fees. It charges $4.99 to about $80 for shipping, based on location and the size and weight of packages.

At the same time, the chain is aiming to boost its free click-and-collect shopping, which has customers ordering online and picking up their orders at stores. Last week, the retailer introduced its latest click-and-collect initiative at five of its outlets: 16.5-foot-high robotic pickup towers that serve as massive vending machines, spitting out e-commerce parcels.

“We’ve kind of gone at our own pace for lots of different reasons,” said Greg Hicks, president of Canadian Tire’s retail division, in an interview at the bustling Queensway store in Toronto, as staff demonstrated receiving a package of Paderno cookware through the new pickup tower in less than a minute. “But primarily we’ve been trying to make sure we keep that experience sound for the customer.”

Canadian Tire was an early adopter of e-commerce but ditched it in 2009 as it grappled with inefficient systems. The retailer returned to online selling with tire store pickups in 2011 and broader click-and-collect merchandise offerings in 2014.

However, it wasn’t until this month that the chain was able to provide home deliveries of most of its merchandise at virtually all of its 500 namesake stores, even while archrivals such as Amazon had stepped up their e-commerce options.

Retail consultant Bruce Winder, a former Canadian Tire executive, said the chain is late to the game. Free shipping tied to paid subscriptions or other promotions is becoming “table stakes” to winning e-commerce customers, even if it makes it tough to operate online profitably, said Mr. Winder, a co-founder of the Retail Advisors Network.

But Canadian Tire is pragmatic in its business strategy and “won’t do anything unless it can make money,” he said. “They’ve taken their time and they’re doing it right.”

Mark Petrie, a retail analyst at CIBC World Markets, said Canadian Tire’s impressive sales gains at existing stores in past years are getting tougher to achieve.

“Amazon is pushing harder than ever in Canada,” Mr. Petrie said in a recent report, adding that Canadian Tire faces a rougher e-commerce landscape. “This does not spell disaster but does present new challenges.”

Even so, Canadian Tire has benefited from investments in sophisticated analytic tools and digital capabilities to better track customers’ online searches and purchases to personalize e-mail offers and make smarter discounting and other merchandising decisions, industry watchers say.

Mr. Hicks said the retailer closely monitors the behaviour of its Triangle Rewards loyalty customers to understand the close links between website searches and sales. Customer digital interactions influence 70 per cent of in-store purchases, he said. “It’s all connected."

He said the potential e-commerce prize is not only wooing more customers but also having them spend three times more on e-commerce orders than on purchases at its bricks-and-mortar stores, as the company’s research has found.

What’s more, 30 per cent of customers who come to the stores to pick up their online orders spend even more when they get there – 4.5 times more than a bricks-and-mortar customer, he said.

He said the new pickup towers, in Toronto, Vancouver, Calgary and Saskatoon, reduce to one or two minutes the average 15-minute wait for online pickup orders in stores. Having to wait in line to pick up orders is “the No. 1 pain point,” his research found.

At the new towers, customers punch in a designated number or scan a bar code from their smartphone and watch their parcel drop down on a tray through a slot. In the Ottawa area, Canadian Tire is introducing self-serve lockers and automated check-in terminals to speed up pickups, Mr. Hicks said.

By next year, the retailer will test free delivery options, he said. But for now customers can cash in on an array of other promotions, including those for Triangle Rewards members, he said.

“If you really want to stimulate demand, you probably need to evaluate opportunities for incentive freight,” he said, referring to free-delivery promotions.

To differentiate itself from Amazon, Canadian Tire is rapidly expanding its private-label merchandise offerings, which now make up 35 per cent of its sales and are targeted to hit 45 per cent in five years, he said. Canadian Tire is also focusing on e-commerce delivery of bulky products such as trampolines, which aren’t as readily available for speedy shipping by rivals, he said.

Report an error

Editorial code of conduct

Tickers mentioned in this story