Electronic Retailer - December 2011 - 34

Canada’s Economy Weathers the Storm

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The United States’ neighbor to the north has emerged from the global economic downturn relatively stable. So what can direct response marketers do to capitalize on the optimism of Canadian consumers?
BY SARAH SAIN How has the Canadian economy fared over the past few years, and what is the current outlook? Barbucci: Canada has suffered from the ripple effect of the worldwide economic downturn, particularly from its neighbors to the south – the United States. The Canadian market is influenced by the U.S. news that permeates in its media. Saying that, I believe that Canada as a whole was not as hard hit by the economic crisis, but rather, it has suffered from the effects of the Great Recession in the United States and the rest of the world. For the Quebec market, which is where I live and where French is the official language, we were even spared a bit more because it is almost as if we have a micro-economic climate. Quebec is a closed market with its own language and its own media; the U.S. influence, therefore, has less of an impact on consumer confidence. The province had a comparatively small increase in its unemployment rate and a relatively low increase in social assistance cases. Booth: The Canadian economy has weathered the global financial upheaval well in comparison to most countries; however, it has still been a tumultuous two to three years in this market. While the statistics seem to indicate that Canada is in reasonably good shape, our proximity to the U.S. has resulted in a dramatic bleed of negativity around the economy. This has resulted in Canadian consumers pulling in the reins on spending and paying down debt. While The past few years have been difficult for the world economy. The subprime mortgage crisis and mass layoffs hit the United States and the debt crisis struck Europe, yet Canada has managed to emerge from the global storm relatively stable and poised for growth. Canada’s economy experienced strong growth through the 1990s and early 2000s, but fell into a recession in the second half of 2008. Canada’s major banks came out of the financial crisis among the strongest in the world, which the CIA World Fact Book owes to its financial sector’s conservative lending practices. In addition, Canada’s unemployment rate is now at its lowest level since February 2009. Even better, Canadian consumers are more optimistic than their American counterparts. According to the Nielsen Company, 57 percent of Canadians say that their personal finances will be good or excellent when 2011 comes to a close, compared to just 44 percent of Americans. To find out more about how the Canadian economy is faring and what it means for the direct response industry, Electronic Retailer spoke with Bianca Barbucci, vice president and general manager at TVA Boutiques, and Patty Booth, president of Thane Direct Canada. The new co-chairs of the Electronic Retailing Association’s Canadian Council answered questions about Canada’s economic outlook, the mindset of consumers and why the country remains an ideal landing spot for DR.

this conservatism may bode well for Canadian households in the long term, it has resulted in a slow down in the direct response rates as well as in the direct-to-retail business. How has the direct response industry fared during this period of economic turmoil? Booth: The direct response industry is alive and well in Canada. However, it is clear that in today’s ultra-competitive environment and with continually increasing costs – media costs being the most alarming – the usual DR channels (inbound calls, web orders, credit card syndication, FSIs, catalogue) cannot stand alone. Retail sales are now a required element in the sales mix to make a profit. One byproduct of retail taking a more prominent role in the business is there has been a change in how companies approach media buying. Infomercials had been the mainstay of many DR companies in Canada until recently,

electronicRETAILER | December 2011



Electronic Retailer - December 2011

Table of Contents for the Digital Edition of Electronic Retailer - December 2011

Calendar of Events
Your Association, Your Bottom Line
Industry Reports
FTC Forum
eMarketer Research
IMS Retail Rankings
Jordan Whitney’s Top Categories
Lockard & Wechsler’s Clearance & Price Index
Ask the Expert
Pillow Pet Talk
What’s New in SEM?
Canada’s Economy Weathers the Storm
How to Cook Up a Successful Offer
DRTV
Legal
Radio
Member Spotlight
Advertiser Spotlight
Bulletin Board
Advertiser Index
Classifieds
Rick Petry
Electronic Retailer - December 2011 - cover1
Electronic Retailer - December 2011 - cover2
Electronic Retailer - December 2011 - 3
Electronic Retailer - December 2011 - 4
Electronic Retailer - December 2011 - 5
Electronic Retailer - December 2011 - 6
Electronic Retailer - December 2011 - Calendar of Events
Electronic Retailer - December 2011 - Your Association, Your Bottom Line
Electronic Retailer - December 2011 - Industry Reports
Electronic Retailer - December 2011 - 10
Electronic Retailer - December 2011 - 11
Electronic Retailer - December 2011 - 12
Electronic Retailer - December 2011 - 13
Electronic Retailer - December 2011 - FTC Forum
Electronic Retailer - December 2011 - 15
Electronic Retailer - December 2011 - eMarketer Research
Electronic Retailer - December 2011 - 17
Electronic Retailer - December 2011 - IMS Retail Rankings
Electronic Retailer - December 2011 - 19
Electronic Retailer - December 2011 - Jordan Whitney’s Top Categories
Electronic Retailer - December 2011 - 21
Electronic Retailer - December 2011 - Lockard & Wechsler’s Clearance & Price Index
Electronic Retailer - December 2011 - 23
Electronic Retailer - December 2011 - Ask the Expert
Electronic Retailer - December 2011 - 25
Electronic Retailer - December 2011 - Pillow Pet Talk
Electronic Retailer - December 2011 - 27
Electronic Retailer - December 2011 - 28
Electronic Retailer - December 2011 - 29
Electronic Retailer - December 2011 - What’s New in SEM?
Electronic Retailer - December 2011 - 31
Electronic Retailer - December 2011 - 32
Electronic Retailer - December 2011 - 33
Electronic Retailer - December 2011 - Canada’s Economy Weathers the Storm
Electronic Retailer - December 2011 - 35
Electronic Retailer - December 2011 - 36
Electronic Retailer - December 2011 - 37
Electronic Retailer - December 2011 - How to Cook Up a Successful Offer
Electronic Retailer - December 2011 - DRTV
Electronic Retailer - December 2011 - Legal
Electronic Retailer - December 2011 - Radio
Electronic Retailer - December 2011 - 42
Electronic Retailer - December 2011 - 43
Electronic Retailer - December 2011 - Member Spotlight
Electronic Retailer - December 2011 - 45
Electronic Retailer - December 2011 - Advertiser Spotlight
Electronic Retailer - December 2011 - Advertiser Index
Electronic Retailer - December 2011 - Classifieds
Electronic Retailer - December 2011 - 49
Electronic Retailer - December 2011 - Rick Petry
Electronic Retailer - December 2011 - cover3
Electronic Retailer - December 2011 - cover4
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