Canadian Tire Corp. has announced a multi-billion dollar plan to improve customer service and bolster sales. The retailer, which operates several banners including Canadian Tire, SportChek and Mark’s, says the $3.4-billion investment will “bolster omnichannel capabilities” and drive long-term growth.
The company says the investment will help improve customer experience across its online and brick-and-mortar stores while growing its loyalty program. Canadian Tire says it will also strengthen its supply chain fulfilment infrastructure and automation and modernize its information technology infrastructure. Chief executive Greg Hicks says the investments will improve customer experiences, create jobs and help drive local economies.
A major part of Canadian Tire’s planned investment is a $2.2-billion plan to build its digital operations. Of that, more than half will go toward stepping up digital services connected to its physical stores, including speeding up curbside pickup operations, rolling out lockers for automated pickup, and creating “connected stores” with digital appointments and more mobile-app features to help customers find what they are looking for.
Another $675-million of the investment will go toward improving the company’s supply chain. Canadian Tire will be adding 1.6 million square feet of warehouse space, will open a 1.3-million-square-foot facility dedicated to e-commerce fulfilment in the Greater Toronto Area and will introduce robotics into distribution centres to improve efficiency.
A big part of the investment in digital operations includes expanding the retailer’s Triangle Rewards loyalty program to encourage more repeat visits by shoppers. Canadian Tire wants to boost purchases by loyalty members – who tend to spend more – to 63% of sales, from 58% now.
The company has been testing an annual-fee-based program called Triangle Select that it will launch nationally this year. In exchange for the $89 fee, the program provides perks such as more Canadian Tire Money on purchases, and is designed to encourage shoppers to buy its more profitable private-label brands by attaching more attractive points offers to them.
Canadian Tire also plans to expand its private-label product lineup. The company plans to launch more than 12,000 products by 2025 across all its store chains, including Canadian Tire, Mark’s and Sport Chek. The company’s goal is to expand its private-label brands to 43% from 38% of sales currently.
The announcement was made as Canadian Tire kicked off its virtual investor day, where the company’s leadership team are expected to provide further details on the plan. “The future will belong to retailers who can provide the most seamless experience across digital and physical channels,” Hicks said during his opening remarks. “We’ll create a seamless omnichannel experience that is unified across our portfolio of retail banners, products and services.”