SAINTS PRESERVE US
Crash and Burn
Beyond the city limits in
a super-duper outlet mall is rising in the environs of the Edmonton
International Airport (EIA). From the highway the massive structure resembles a
prison, complete with watchtowers. Costco, with all its concrete Soviet
Brutalist charm, has been confirmed as a tenant. The Alberta Aerotropolis
project envisions the province’s capital city, the city of Leduc County and industrial Nisku as an inland port,
anchored by the EIA and big box stores. Despite explosive growth along the
Queen Elizabeth II, the Leduc Calgary – corridor, I
wonder if the retail component is a decade behind the times. As is, perhaps,
the high stakes bet on the long term robustness of the fossil fuel industry and
its Nisku service companies. Edmonton
The city currently boasts two premium malls. West Edmonton of course, and
now host to the cavernous vacuum of the debacle that was Sears. Toys “R” Us
will probably leave some big, empty boxes strewn about. Secondary commercial
properties are struggling with abandoned Zellers and Target leases. Some are
reeling from the double whammy of Sobeys’ Safeway acquisition; grocery banners
which no longer compete with each other merely require a single space for their
wares. Most malls are depressingly populated with medical service and supply
companies, and dental clinics whose signs always feature a gigantic, rooty
molar. Neighbourhood strip malls tend to be even drabber, shabby convenience
stores tucked between FOR LEASE signs and whitewashed windows. Southgate
Loblaw was once
’s most innovative grocer,
thanks to visionary gourmand Dave Nichol. The President’s Choice (PC) brand was
audacious, promising consumers a private, exclusive and superior product to
that of any of the nationals. The foundation of the PC line was somewhat
ironic, the formula of Royal Crown cola, a deceased and forgotten though tasty
brand, an early victim in the war between Coke and Pepsi. After the gift of
President’s Choice cola Nichol graced us all with “decadent” chocolate cookies. Canada
Last week Loblaw announced that it intended to extort its vendors again, shaving invoices for a modest percentage to cover processing costs. The company announced the launch of a fee-based loyalty program. The company announced too that it would close 22 of its stores but was coy about which ones where. The company announced an e-commerce initiative predicated on consumers’ needs featuring premium pricing which may potentially be eased somewhat by signing up and paying for the enhancements touted by the fee-based loyalty program.
The Sobeys attempt at being digital is the ludicrously codenamed “Project Sunrise.” The only quantifiable result to date is the termination of the careers of 800 of its employees.
The golden or perhaps black metric for traditional retail has been same-store sales. Ever upward! Amazon never cared a whit for this dusty model. It didn’t have to. So this is why e-commerce can become something like Hercules’s Hydra for newcomers, old school operations. E-commerce will reduce foot traffic. Reduced foot traffic will reduce impulse purchases, incremental sales. Less busy stores require less staff. A lack of staff, especially cashiers, will annoy average shoppers inside stores who are not professional third party pickers with lists. They may ultimately decide to spend their money elsewhere, some place with a human face and a modicum of customer service. But where will they go?
My guess for baby boomers like myself is that we’ll just give up and go home, a safe place to click-step into the new, emerging world order. Younger people, prizing experiences over consumer goods, are already mobile, shopping from anywhere without actually having to endure the hassle of going to a store. Chain retailers are twigging to the new reality, that they don’t need hundreds of locations so much as a few warehouses and a virtual store. Amazon seems to be going against the trend it created with its Seattle shop and its acquisition of Whole Foods, a modest operation, but it doesn’t strike me as a strategy so much as a novel attraction, like a themed corporate outlet on Times Square.
Electronics retailer Best Buy has long complained that consumers utilize its stores as mere showrooms before purchasing items from less expensive, competing online vendors. Chapters-Indigo, a bookseller, seems convinced the path to profit is lit by votive candles and padded with aphoristic throw cushions. Why visit a bookstore that doesn’t sell books? The HMV music chain closed its doors leaving
with one decent
record shop; that one hurt me. Edmonton
My sweeping generalization of economic digital disruption is that most sectors have or will become more efficient while utilizing less labour. Retail provides a fine example of the paradox posed in this period of transition. Online shopping is a relatively painless and positive experience. A venture into the actual physical marketplace has been degraded into something akin to agony, no staff, no stock, no satisfaction. And anyway, people who are out of work or juggling multiple part-time obligations or struggling with their new roles in the gig economy tend not to throw money around.
But if you’ve got the money, honey, why settle for the wares of a dowdy banner still trying to figure out the modern world which already went by in a Doppler engine drone? Direct-to-consumer startups are offering viable alternatives to Gillette razor blades, Kraft Dinner and Heinz ketchup; they’re as disruptive now as Loblaw was in the 80s when it launched its President’s Choice brand to humble the nationals: Dave Nichol versus Goliaths.