Canadian retailers of all types will find an action packed year ahead of them. With an economic background consisting of many pluses and minuses, retailers need to be super-sensitive to “messages from consumers” and agile in their reactions. Here is what the advisors at J.C. Williams Group think retail management must look out for.

E-tail (with 82% of Canadians researching products online and 71% making a recent purchase – source: J.C. Williams Group Canadian E-tail Report) is now a formidable and growing force. Commodities like electronics and entertainment have penetration of over 30%—and even apparel has 18% of expenditures spent online. Any retailer not moving to cross-channel or omni-channel retail will be left behind.

Value retailers from Dollarama and Giant Tiger to Walmart and Costco in the price-driven sector, fast-fashion H&M and Zara (Inditex Group), and Best Buy/Future Shop will continue to steal market share. Consumers want clear choices. Retailers without a clear strategy will confuse shoppers and lose buying traffic.

On the opposite end of the scale, Canadians will have more alternatives at the top end. Not to be outdone, Harry Rosen and Holt Renfrew continue bold expansions and upgrades while new entries Nordstrom and Saks Fifth Avenue will offer new shopper experiences. The question for the industry is “Will all of this be over saturation within our small country?”

As Canada builds with urban density, shoppers will see many more stores in city cores – most in smaller formats like the recently announced IKEA “pick up store” of ±37,000 sq. ft. Driving this change is the high cost of retail real estate and the creation of the web-based “endless aisle” where expanded assortments are shown online rather than in-store.

What does seem clear is that the retail life cycle (innovation ⇒ rapid growth ⇒ mass acceptance ⇒ maturity ⇒ decline) is getting shorter. Canadian retailers that are (a) caught in the middle either value-wise or fast-fashion wise, (b) not focused on a micro-segment, (c) not clearly and uniquely differentiated, and (d) not offering omni-channel shopping (with some minor exceptions) will face competitive headwinds.

Canada has many of the best retailers in the world. These creative, service-centred, agile, and entrepreneurial omni-channel businesses will prosper in our country of great opportunities.

J.C. Williams Group is a well-known, full-service retail and marketing consulting firm. It offers clients practical, creative, and in-depth knowledge of retailing and marketing, including up-to-date know-how and techniques to make retail operations better and more profitable. You can also read their informative blog, Retaileye, here: retaileye.wordpress.com.