Electronic Retailer - March 2012 - 34

BY AYAL LATZ

Case Study

DR Marketing North of the Border
a2b Fulfillment removes the logistical hurdles to help CarMD find distribution success in Canada.

h
34
electronicRETAILER | March 2012

Have you considered extending your successful direct response campaign to an incremental 34.3 million consumers? They are sitting close by, just north of the U.S. border. Canada is the largest trading partner for the U.S. with more than $497 billion in goods exchanged between the two countries during 2011. This might be the easiest international expansion that you can find. Canada is close, has many English-speaking residents and shares many cultural similarities. But don’t jump in without testing the waters. Marketing to Canada is no slam dunk. Millions of Canadians speak French as their first language. And Canadian English has some differences with American English. Canadian and American cultures are not the same. Maybe the differences are not as great as in marketing your product to, let’s say, Russia, but there are enough differences to make you pause to think. Other differences include legal, safety, accounting, advertising and packaging requirements. Getting product into Canada has another set of customs procedures. You will be working in a different currency. So there is currency exchange rate risk that you don’t consider with your U.S. marketing program. What about the implications for your business? In order to deal with all the challenges noted above, how much do you have to extend your vendor pool to obtain the required support? How much more complicated does the life of the marketer become? On the supply chain side, you will need a Canadian warehouse location. That means two sets of inventory, perhaps two vendors, and two different management software programs for analysis and inventory control. Or is there a way to get around this issue? Despite the challenges, Canada is alluring. Marketers may consider expanding to Canada for several reasons. In many cases, marketing efforts spill over the border; Canadian consumers living near the U.S. border see/ hear the U.S. offers on cable and are motivated to

order. Media run in Detroit is viewed in Windsor, Ontario. So you may be receiving orders – or at least inquiries – from Canadian consumers already. How are you dealing with those orders or are you missing out on that order altogether? Not selling to Canada is like spending money to say “no.” This doesn’t just cost you in sales, but also incurs costs in customer service because your call center agents are wasting time fielding calls from Canadian customers only to tell them that you don’t ship there. Shipping individual orders from the U.S. to Canada is a marketer’s (and consumer’s) nightmare. A partial list of issues includes: length of time to deliver, traceability, customs and duties, Canadian taxes, currency exchange, payment processing, returns processing and customer service. a2b Fulfillment noticed that our DR marketer clients were either experiencing these issues, or agonizing over whether or not to ship orders to Canada. We reacted by creating a solution for U.S. marketers. In late 2011, a2b opened operations in Canada with a Toronto facility. Since inception, several U.S. marketers have launched DR campaigns in Canada. One of these marketers is CarMD.com Corp., one of 2011’s leading DR marketing programs and winner of ERA’s 2011 Moxie Awards “Long Form of the Year – Under $250K” category. Since its U.S. launch in 2006, CarMD had long recognized Canada as a potential market due to demand directly from Canadian consumers and favorable coverage from Canadian media. CarMD’s marketing team recognized the potential for increased revenues, retail expansion, positive PR and branding. But first the company needed to ensure its product was ready for Canada. The company offers a handheld device to help drivers diagnose car health. But what sets CarMD apart from any other product available is its database with precise car repair information down to parts and labor costs by postal code. In order to bring

In order to bring this product to the Canadian market, CarMD’s team of automotive technicians needed to ensure that its database included accurate and up-to-date repair information specific to Canada’s unique environment and vehicle population.

Electronic Retailer - March 2012

Table of Contents for the Digital Edition of Electronic Retailer - March 2012