Best Buy Canada to roll out SOA-based mobile platform from Stella Nova
New York — By the summer 2012, Best Buy Canada will start rolling out mobile point-of-sale (POS) in select Future Shop and Best Buy pilot store locations.
Implemented on the service oriented architecture (SOA)-based Stella Nova Mobile Retail Framework, the new mobile POS solution is architected to keep POS functionality independent of the mobile device and its operating system. This will enable the company to adapt seamlessly to future shifts in mobility trends and technology. The system will also allow the company to manage all aspects of customer interaction via a simple, intuitive user interface, keeping employee training to a minimum.
Pet specialty items lands on Target shelves
The Eco-Me brand of unique dog grooming products is the newest arrival to the pet department at Target.
The brand said it secured placement in 450 Target stores for its line of all-natural pet cleaning and grooming products that are Ph-balanced specifically for pets.
“No longer a hard-to-find specialty item, all-natural at home pet grooming saves money and keeps pets safe and healthy,” according to the company. “Today, dogs are considered family members; kids and adults alike spend more time with their pets than ever. Being healthy is more than a trend; it’s a family matter, and Eco-Me’s natural pet grooming products give consumers the very best products for their favorite furry pals.”
The brand uses only plant-based ingredients and pet-safe essential oils. Clinically tested and veterinarian approved, Eco-Me is made in the United States and is a partner with PETA.
The addition of Eco-Me follows last month’s major merchandising initiative called The Shops at Target that saw the company devote a full endcap in the pet department to products from the pet specialty store Polka Dot Bakery.
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Target’s Canadian strategy – go big or go home
Target’s plan to achieve $6 billion in Canadian sales by 2017 is doable, according to Bernstein Research analyst Colin McGranahan, who notes the company’s goal is dependent on achieving sales productivity levels higher than the United States.
He has an outperform rating on shares of Target and believes the market is discounting what he believe is a high likelihood of success in Canada where the company expects to open as many as 135 stores by 2014. By 2017, a total of approximately 150 stores will be in operation. Expectations of a rational pricing environment, market share gains and sales per square foot productivity levels that will eventually rise above the company’s U.S. levels underpin McGranahan’s favorable view.
“Target’s long-term Canadian ambitions represent a fairly high bar, as the company seeks to become one of the nation’s largest retailers. Despite the potential for initial volatility around the initial launches, we expect the stores to ramp up quickly, aided by Target’s decision to enter the market with immediate scale,” according to McGranahan. “In addition, we believe Target is well positioned to succeed in Canada, given a fairly similar market to the United States, already high awareness among potential shoppers, and a more open competitive landscape versus the United States.”
Some of McGranahan’s most interesting thoughts relate to the awaiting pricing environment and the response from competitors in advance of Target’s arrival. He contends most pre-emptive efforts will focus on the area of differentiation and store experience rather than price.
“As Target begins to open stores, we do expect some intensification in the pricing and promotional environment as incumbent retailers attempt to hold share,” according to McGranhan. “However, based on our discussions in-market, it seems likely that the major vendors will be reluctant to fund promotional spending. Logically, this makes sense as a major vendor like a P&G or Kraft sees Canada as a zero-sum game and already counts Target as a very important customer. As such, these vendors would likely see little benefit in helping to fund promotional activity from the incumbent retailers like a Loblaw’s when it is inevitable that Target will end up with a substantial share of the market.”
He goes on to make the case that incumbent Canadian retailers who might otherwise engage in pricing actions to fend on a new market entrant will be discourage from doing so in Target’s case because of the company’s all or nothing approach. Rather than engage in a futile, margin eroding pricing campaign, McGranahan suggests the competitors are likely to recognize the inevitability of some share loss and will look to maintain margins.
Ultimately, the locations Target operates in Canada are expected to produce sales per square foot of around $430 based on the company’s goal of $6 billion in sales by 2017. That figure is considerably higher than the $316 in sales per square foot the analyst estimates the company’s U.S. operations will achieve.
“The higher Canadian productivity on a per-foot basis will be led by the top 100 or so Zeller’s stores, which represent the company’s best locations and are expected to generate (sales of) $45 million per store, or $480 per square foot,” according to McGranahan.
“These stores average 94,000 sq. ft., so with similar per-store volumes, Target expects substantially higher per-foot productivity.”
With high population densities and attractive store locations, the numbers are feasible, but he cautions they could be on the aggressive side consider Walmart’s current productivity in Canada is about $415 per foot and half of its locations are supercenters.
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