Canadian Retailer - Summer 2016 - 31

Canadian Retailer: Do you see any parallels with what's
happening in Europe here in Canada in terms of the rise of
discounters, online sales, consolidations and so on?
Frederic Thomas-Dupuis: I would argue that the U.S. is a couple
of years behind Europe in some of these dimensions, and I would
argue that Canada is essentially a couple of years behind the U.S.
on these same dimensions. It's interesting because you can watch
how things play out in Europe and then watch how things play
out in the U.S., and obviously there are some differences between
the markets, but some of these megatrends are quite similar.
CR: The major supermarkets here are upscaling their
mainstream stores. What's your take on this trend?
FTD: It's one way for the retailers to compete with some of what

I call the soft discounters by trying to differentiate their offering
on aspects that they can compete on more effectively. Because
obviously it's difficult for them to compete on price, and therefore
they have to compete on value, and the value equation doesn't
just consider price. It considers the convenience, it considers service, and it considers the quality. What retailers are trying to do
with these formats is differentiate themselves on those aspects.
If they could continue to improve their fresh departments, that's
something the discounters are going to have a lot more difficulty
competing with because their focus is much more on price.

CR: Some of these things require the investment of considerable amounts of money,
especially if you're looking at a format
redesign anything of that nature.
FTD: With respect to online, there's also the
implication on supply chain to consider, especially in the last mile. Everyone's trying to figure out the right approach for this. If they decide to use more of a click-and-collect format,
they'll also need to figure out what real estate
they're going to use for that. Grocers also need
to consider whether or not their assortment in
the click-and-collect stores, or the online offering, is similar to what customers can shop for
in stores, because there are implications that
can have on the customer proposition as well.

CR: Will we be seeing more of an emphasis on online sales in
Canada in the near future?
FTD: The short answer to that is yes. Online is an area that re-

quires a lot of experimentation to get right. And I would argue
that no one really has cracked online grocery, although there's
a lot of headway being made in Europe, particularly the clickand-collect formats that exist in France.
It requires a lot of experimentation for a lot of reasons. Number
one, because it's hard to get the economics of it right. It's expensive
for grocers to implement the online proposition, because there are
different ways you could go about it, whether talking about delivery or click-and-collect, and each of those have their pluses and
their minuses that are quite expensive to implement. In the U.S.
there are a lot of entities that are trying to break into this market,
like AmazonFresh for example, Instacart and a few others.
CR: The European study talks about the importance of
being a leader, not a follower, and to be proactive rather
than a copycat.
FTD: You can see some experimentation in Canada. You've got

Loblaw trialing some click-and-collect stores, and IGA in Quebec
has had its online store for quite some time. I wouldn't say that
grocers are sitting on their laurels. I think they need to continue
to experiment, and they need to find the model that works for
them, which will require some trials and some testing and experimentation. And it will require them to figure out the economics of
this in particular, because that's the hardest part of it.

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Frederic Thomas-Dupuis, Oliver Wyman

CR: For many customers, shopping in-store
allows them to discover new products, to see
what's new. How is this presented online?
FTD: The discovery is a lot harder online than

it is in-store. Getting those couple of extra
items into the basket is a lot harder, which is
why you see on Amazon's website all kinds of
recommendations for how to pair up different
items, or other things you could be shopping
for, whenever you try to shop their online store.
It's getting those extra items into the basket
that can be tricky.

CR: There really is no cookie-cutter approach
to this, is there?
FTD: It's a complex market, because it's un-

clear exactly what the customer wants. Customers may not want a big monolithic thing.
Some customers want click-and-collect. Some
may prefer home delivery. And on the flipside
of this, it is very difficult to find the model that
will work for the retailer. There are a bunch of

SUMMER 2016 | CANADIAN RETAILER

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Table of Contents for the Digital Edition of Canadian Retailer - Summer 2016