One of Canada’s largest retailers is using customer data from its loyalty program and credit cards to drive sales and counteract the potential impact on demand from rising prices.
Canadian Tire Corp. Ltd. said on Thursday that it is focused on attracting and engaging members with awards as a way to gain an idea of shopping habits and shaping sales through promotions.
The company’s focus on its rewards program underscores the growing value of personal shopping data in a highly competitive retail environment.
“In addition to the rich first-hand data we can dig through our Triangle Rewards loyalty program, our Triangle credit card provides critical information about our customers and their shopping preferences and behavior,” said Greg Hicks, president and CEO. on the Canadian Tire. call analysts to discuss the company’s quarterly results.
“Our ability to design demand with our high-low programming in all banners makes us much more relevant,” he said. “We feel ready to deal with any related shifts and cost behavior at the customer level.”
Canadian Tire increased its dividend by 25%, accounting for first-quarter profit and earnings, up from a year ago.
Overall, the company reported a net profit attributable to shareholders of $ 182.1 million, or $ 3.03 per share, compared to $ 151.8 million or $ 2.47 per share a year earlier.
Revenue for the quarter ended April 2 was $ 3.84 billion, up from $ 3.32 billion in the same quarter last year.
Comparable sales in its Canadian Tire retail business grew 4.5%, with cars, hockey and winter leading the way.
The company’s banner banner saw comparable sales growth of 17.1% amid stronger sales of industrial footwear and jeans, while SportChek stores grew 10.2% with higher sales of winter sportswear and apparel.
Meanwhile, Canadian Tire’s use of loyalty member data underscores the growing complexity of in-store and online promotions aimed at increasing customer spending.
The story continues
Canadian Tire, for example, has created a new offer widget feature that encourages customers to use rewards to earn Canadian Tire e-bonus money if they purchase a specific product.
When tested, the bid widget led to a 17% increase in sales at Canadian Tire and a 34% increase at Mark’s, Hicks said.
“If you came back two years ago, you would have seen a lot more than a store with a 20 percent discount as an example,” said Gregory Craig, Canadian Tire’s chief financial officer.
“Using targeted promotional offers is much more significant than it has been in the past.”
Using customer data to target sales more effectively also benefits margins.
“With all the data we have, we’ve never been better able to really understand the value that consumers crave,” said TJ Flood, president of Canadian Tire.
“We always try to strike this balance between margin management and demand inspiration, and also not give an inch of competitive prices.”
However, the company is coping with a tight labor market and ongoing supply problems.
“When you look at labor in the market right now, it’s a challenge,” Flood said. “But our dealer network is very entrepreneurial and very, very aggressive locally, attracting and retaining talent.”
Although there are concerns about how the shutdowns in China will spread to the global supply chain, Hicks said the impact is minimal.
“It is important to know that the ports in Shanghai and Beijing are not closed,” he said. “The reality is that Chinese supply chains are doing better than a year ago.”
Hicks added that the company has adjusted delivery times and continues to use charter ships to ensure that inventory arrives on time.
Although buyers may begin to cut costs amid high inflation, he said the company is ready to deploy its “demand elasticity drivers” and rewards program to provide choice and value to customers.
This report by The Canadian Press was first published on May 12, 2022.
Companies in this story: (TSX: CTC.A)
Brett Bundale, Canadian Press
Add Comment