Retailers pump up services, selection as fierce competition continues

Retailers continue to ramp up their service and selection in the fight for Canadian consumer dollars, but it’s also coming at a great cost to some companies.

Online retailer Amazon.ca said this week it has further expanded its Canadian online store to include musical instruments and wireless accessories.

The addition of these two categories, which includes guitars, oboes and smartphone cases, ups the number of new offerings from Amazon.ca to 16 over the past year, including more recently auto accessories and grocery items.

“We’re committed to delivering an unparalleled selection of everything our customers need – all in one place,” Amazon.ca country manager Alexandre Gagnon said in announcing the extra categories.

The move isn’t that surprising given how much more Canadians are shopping online these days, but it comes amid an ongoing shakeup in the retail landscape that intensified when Target first came to the country last year.

While Target’s Canadian experience has been rocky, other retailers aren’t resting on their laurels. Wal-Mart is planning to invest $500 million in the Canadian market, including new stores and more online offerings. The U.S. retail giant said it plans to have 395 stores in Canada by this time next year, up from 389 today.

Meantime, U.S. department store chain Nordstrom says it’s planning to open six stores in Canada next year, its first foray outside America, while Hudson’s Bay is bringing in luxury retailer Saks.

The competition for Canadian consumer spending is impacting retailers bottom line. Hudson’s Bay said this week that its earnings will be weaker than expected due to investments it’s making to beef up its shopping sites.

Meantime, other retailers are finding they just can’t compete in their current form.

Sears Canada has been cutting hundreds of jobs, shutting call centres and selling off leases for some of its landmark locations – including the Toronto Eaton Centre – to cut costs and pour more dollars into its e-commerce business.

The good news for consumers is that discounts are easy to find and customer service is improving, including in the larger department stores.

According to the latest RetailTrack mystery shopping survey, there has been an 11-per-cent increase in overall customer experience among a handful of Canadian department stores over the past two years. The survey included Canadian Tire, Zellers, Walmart, Sears and The Bay.

Canadian Tire saw the biggest improvement, likely the result of its focus on smaller stores and an improvement of its auto parts and service division in recent years.

“The tremendous increase by Canadian Tire is very impressive, although not entirely surprising. It is a Canadian company that is facing intense pressure from very savvy and aggressive U.S. and Canadian retailers,” stated Shaun Belding, CEO of RetailTrack parent, The Belding Group of Companies.

“The increased overall performance [among all department stores] is a reflection of the effort and focus that all companies, globally, have been putting on customer experience over the last few years.”

Customer experience is expected to become more of a focus for retailers as they fight for consumers and their limited wallet size.

“Companies that aren’t making customer experience their focus are definitely at risk,” said Belding.