On Canadian Tire’s improved business strategy

Canadian Tire store
Image via Wikipedia

Okay, so most of my readers won’t know what Canadian Tire is, but for those of us who live in Canada, it’s an icon. It’s basically a big hardware store and automotive store; sort of a combination of an auto parts store, discount mechanic, sporting goods store, and Home Depot without the wood.

They are like “the man’s department store”, if you’ll forgive me for the momentary gender stereotype.

I like shopping there. Not because I’m a man and have some gender-stereotyped fascination with tools, but because they sell stuff that I need to buy. House stuff, car stuff, garden stuff; you know.

In a recent article by the Canadian Press, the writer reports on Canadian Tire’s business strategy. Their old business strategy, apparently, was to focus on their financial services (basically credit cards; probably some other kinds of financing). Reading between the lines in the article, it seems like they feel they’ve neglected their stores and let them run on autopilot while they made money hand-over-fist in financial services. Their new business strategy is to return their focus to the automotive side of the business. While financial services will still be part of their portfolio, the automotive focus will become more important in the coming years.

This is a good move by Canadian Tire. In particular, the article reports that they are planning to change the customer experience in their service centers, to which many vehicle owners shout “finally!”

I worked at Canadian Tire. For one day. I got a job in the automotive service section (this was immediately after college when I was still trying to figure out what I wanted to do in life). I lasted just one 8-hour shift. It was the worst job of my life (and I’ve had some bad jobs). Everyone was caustic, the systems were antiquated, customers waited hours in line, and two shift managers got into a screaming match over whether or not they wanted to repair a guy’s flat tire. As a customer I had good and bad experiences with them; as an employee it was awful.

Their automotive section has been neglected; here is what I’d advise they do to fix it:

Canadian Tire’s automotive section can be divided into three parts: The over-the-counter automotive parts (wipers, sparkplugs, tires, accessories, and some other basic parts); the behind-the-counter automotive parts (more specialized parts); and their service center. Each of these has been sorely lacking.

Their over-the-counter parts supply is robust (at least to me, although I just own regular cars and don’t do much work on them myself) but these aisles can be difficult to navigate and there are greasy, well-worn binders of car manufacturers and part numbers lying around so you can theoretically find your car part. Their behind-the-counter auto parts have been okay (I don’t use them much) but it’s sometimes hard to get a clerk to help you.

To solve both of these problems, I’d advise setting up a bank of easy-to-use computer kiosks where vehicle owners can type in their car’s make and model and be directed to either find the part or alert a clerk to get it from the back. They already have this system in their stores, but it is available on employee-only computers and accessed through the most archaic system you’ve ever seen. I think they’d actually save money by helping more people with fewer staff.

The automotive service section of the store is a mess. They don’t take appointments (it’s first-come, first-served), they run an archaic computer system, their waiting rooms are gross and uncomfortable. Not a nice place to bring your car. Fortunately, these are easy fixes.

Now, I do like their first-come, first-served approach but it does tend to create bottlenecks during prime hours. I think they might be able to provide a mix of appointments with on-demand service to even out how the peaks and valleys of busyness.

They also need to do something about their waiting areas. Plastic chairs, a TV, and a vending machine do not constitute a waiting area. Heck, a coat of paint would help, but so would some better coffee. I know that some Canadian Tires have a donut shop built in (the way a lot of Walmarts have a McDonalds) and this might be a better (revenue-generating) way to attract more people to your store while also giving people a more pleasant place to wait.

A shuttle service wouldn’t hurt either. (They might offer this at some stores but not at any of the ones I’ve been to). This can also help to even out the busyness.

They also need to attract and retain automotive service customers. They aren’t doing much in the way of marketing (well, they market their store in general but not the automotive service) or following up. This is easy to fix, especially since they have so much demographic information about the people whose cars they are repairing. Combine some direct marketing with some strategic relationships (for example: why not be the recommended service provider for used car lots who cannot afford to run their own auto service shop). A small kickback to the referring car lot can generate a lot of extra business.

And while I’m making recommendations here, I think they have neglected opportunities to help people buy and sell cars. I’m not talking about being a used car lot themselves, but they are THE place people go who think about and work on cars. They sell Autotrader magazines but have missed an opportunity to do something similar (or better). Combine this with their massive database of vehicle owners and they have a potentially targeted list to send out vehicle listings to people who might be in the market to buy.

I like Canadian Tire, not only for its iconic presence on the Canadian landscape but because it is a convenient place to shop. But they haven’t done themselves any favors in the past fifteen to twenty years and they’ve finally realized that it needs to change. They are so embedded in Canadian culture and do have top-of-mind placement when it comes to many auto-related needs, but they’ve been lazy. It’s time to get back to their roots and make the changes that can ensure their future as Canada’s automotive store.

Published by Aaron Hoos

Aaron Hoos is a writer, strategist, and investor who builds and optimizes profitable sales funnels. He is the author of The Sales Funnel Bible and other books.

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