O O Ø O O O O
You Better Not Pout I’m Telling You Why...
’cause Best Buy... is coming... to town!
I love being home. I love being Canadian. I have real beer again. Life is good.
As I mentioned briefly a couple of weeks ago, I decided it was high time I got my ass out of Minne-fircking-apolis and return home to Ottawa. It was a good trip home. I found I actually liked the three days of driving - very zen. I even got to visit the White Ho and the home of the Fighting Illini in Champaign, IL (note to all: don’t try the TexMex, stick to the burgers and beer). In my trip through Michigan I counted over fifty deer carcasses on the I-94 and came to the conclusion that the State Troopers in the Midwest are pretty sneaky (they set up their radar traps by driving their cars into the culverts so the only thing you can see is their light rack as you pass them by) and no, I did not get a ticket. That was over two weeks ago, and since arriving I have been getting reacquainted with my home and native land after a three-year absence.
I love being home. I love being Canadian. I have real beer again (and no Ev, that is certainly not limited to “Keats”). Life is good.
Over the last decade I have noticed, as I’m sure most of my fellow Canadians have, of the emphasis put on nationalism by the larger Canadian retail chains, as well as smaller individual stores. These chains advertise themselves as “Proudly Canadian,” and you see the red maple leaf prominently displayed wherever that slogan appears. I think we’re all closet nationalists deep down, and that those nationalistic feelings only come out when we feel threatened by the 800-pound gorilla to the south, are travelling abroad (including the US), or it’s Canada Day in Ottawa. I do feel the major chains in Canada are justifiably concerned by the US, as several big box companies have moved in over the last 20-odd years to create greater competition and take away market share and revenue. They’ve always been here, it’s just that the branding strategies are a hell of a lot better than Canadian companies (admit it, it’s true), and the extreme pressure to expand growth into new markets has really caught a lot of companies flat footed. The exception to this rule being the breweries who, if put to the task, could probably make Zellers look better than Sak’s Fifth Avenue.
I was walking around Future Shop looking for a power adapter for my PDA (I foolishly packed both of mine and they are sitting in one of the boxes currently in storage) the other day, and noticed that there were no “Proudly Canadian” stickers displayed anywhere. This was a big change from the 2 foot red maple leafs that had previously adorned their front doors, and I was a little confused. I asked one of the drones on the floor what had happened to the signs (which only first appeared in June of 2001) and was told that Best Buy had purchased Future Shop late last year. Less than six months from “Proudly Canadian” to “sellout,” not bad at all. No fight, just “show me the money,” which is the way it’s supposed to work in a free market, but it rubs me the wrong way because to me, using the “Proudly Canadian” as part of their branding was a commitment to stay that way. The way I see it, it was strictly a marketing ploy that they could use to build loyalty, and being Canadian really had nothing to do with how the company operated.
Less than six months from “Proudly Canadian” to “sellout,” not bad at all.
I don’t view the selling of Future Shop as a particularly bad thing. I don’t like the chain, and shop there only when I know exactly what I need and it’s my last resort (i.e. I went to four Staples stores looking for the charger before I went to Future Shop, that’s the kind of hard-head I can be - hey, I value choice). The “Sales Associates” are never around when you have a question about small stuff, but flock to you when you even glance at a big ticket item or are heading to the cashier with an armload of parcels that they can “check out for you” (this is code for “I’m going to put these items on my sold-by-me list so I get comped, even though I didn’t lift a finger to help you, but I’ll make it sound like I’m doing you a favour”). They generally sell lower quality or commodity electronics, and they have very little negotiating room on the prices. I prefer smaller stores with salespeople I know, as it tends to be a better deal from a service, support, and cost perspective in the long run. Future Shop is great if you need to return something within 30 days, after that it is a fucking nightmare.
The brand that Future Shop created, good or otherwise, will fade. If you look at the Best Buy Investor Information page, there is no mention of the Future Shop Chain, even though its revenues will account for around 5% of the company revenue. The reason for this is simple - there will probably be no more new Future Shop stores, anything new will be under the Best Buy name. There was a blurb in the local paper today that announced there would be eight Best Buys in the Greater Toronto Area by the fall, and most likely the existing stores will be converted over time if they follow the practices laid down by Wal-Mart and Home-Depot, who got into Canada in a similar fashion to Best Buy.
...they won’t be able to build loyalty to their chain by appealing to my nationalism, and I’m pretty happy they won’t be able to try...
Best Buy is not a bad place to shop, although it too has its own problems. It’s a Minne-fircking-apolis-based company that dominates the US market like Future Shop has come to dominate in Canada (that’s why Best Buy bought Future Shop, so it wouldn’t have to compete against it). Their sales force is all relatively young (read: High School kids who are scarily enthusiastic about their jobs, at least in Minne-fircking-apolis they are) and will tell you they don’t work on commission. The selection of merchandise is pretty decent, and they have a good return policy and are an excellent corporate citizen. Combine that all with being profitable, and it’s really hard to argue with it’s existence here, and I think they’ll deliver a pretty good product overall.
But they’re not Canadian, and they won’t be able to build loyalty to their chain by appealing to my nationalism, and I’m pretty happy they won’t be able to try.
I do look at the acquisition of Future Shop as a sad thing, though. It was a Canadian company that pulled a small profit ($32M profit on $2B in revenue shows the kind of margins they have). Compare it with Best Buy’s twenty-fold better profit to revenue ratio ($3.9B profit on $18B revenue), and it’s pretty clear Best Buy can eke out the profits just a little better, and probably leverages the purchasing power it wields a lot more effectively. There are a lot of other examples of Canadian companies that were successful before getting acquired, including a Canadian icon (Did you ever wonder why there are so many Wendy’s and Tim Horton’s together? It’s not a clever marketing agreement) and a pretty good office supply company that was picked up by Staples (they still use the name in conjunction with the Staples brand), but the story seems to be the same each time, and I wonder if it really matters if the company is Canadian other than in the minds of the consumers, which I guess is what marketing is all about. Hell, the clothing company I love and promote and screams Canadian is actually owned by two Americans who happen to love this place as much as I do, and has much more to do with making shareholders happy through expansion than trying to appeal to a limited market.
That’s the way to win my loyalty and my business, not by telling me what your nationality happens to be today.
So I guess my point is this: The “Proudly Canadian” icon should never be used as a marketing ploy, it’s deceitful. There are a large number of companies doing just this today, but how do they know they’ll still be Canadian a couple years from now? The shareholder is the most important thing to a large public company, and if the opportunity to significantly increase shareholder value presents itself, you can be pretty damn sure the company will take it (their executive will find themselves out on their asses pretty quick otherwise), Canadian content be damned. Do you really think the Hudson’s Bay Company would turn down a serious offer from Target for the Zellers chain if the price was right? Not likely, because that’s business, and love of country usually has very little to do with the free market. There are exceptions, but there are damn few of them.
I love my country, and have always (proudly) told everyone I am Canadian and how great this place is no matter where I happen to be. You don’t see Canadian companies doing that inside the US, and I think that’s the right way to handle it. My piece today is really not a rant, it’s more a request to some of the companies out there to not place too much emphasis on that which they don’t really have a lot of control over. While being a Canadian company will definitely influence my decision, it shouldn’t be thrown at me in an effort to make me feel guilty buying from a US-owned chain that still employs Canadians, pays Canadian taxes, and contributes to the community like “Proudly Canadian” companies. I know who I am, I know who you are, and if you provide a decent service chances are I’ll buy from you. That’s the way to win my loyalty and my business, not by telling me what your nationality happens to be today.
Tuesday, June 4, 2002
PD DL
P.S. To those Canadian companies out there - you may find that advertising yourself as being “Proudly Canadian” limits your growth potential. From the outside it may seem you’re trying to be a little elitist for no apparent reason. Just a thought, free of charge.
P.P.S. I love New York City, as well as Canada. That good, Walt? ;)