Incoming Canadian Tire CEO Michael Medline outlined the strategy for investors Thursday, saying the future of both Canadian Tire and its retail units such as Mark’s Work Wearhouse and Sport Chek depends on attracting younger customers.
Customers will see this new approach in new lines of products, changes to store layout and a new approach to advertising, said Medline, who succeeds current CEO Stephen Wetmore on Dec. 1.
One early sign of the new focus is the digital expansion of Canadian Tire’s loyalty program.
There will be further digital forays over the next three years, including more online shopping, while Sport Chek plans to move most of its advertising into online forums.
Medline is describing the new approach as a “generational shift,” saying Canadian Tire will be aiming to attract new customers in the 30 to 49-year-old age bracket.
Young families typically have higher expenses than older shoppers, spending money on children’s sports equipment and bicycles, as well as household items. Cash-strapped young homeowners are also do-it-yourselfers, likely to spend on home renovation.
Medline aims to grow Canadian Tire revenue by three per cent a year, amid a very competitive retail environment.
He said its ad spots will feature family activities, such as a father helping his son paint a treehouse in the backyard.
"When you target (a group), you get a sharper message, you carry the right products and you have the right operations in your store," he said.
Founded in the 1920s, Canadian Tire is one of Canada’s largest retailers, with a large faithful following and a business model that has been virtually recession-proof.
But many in the younger generation do not find the stores appealing or understand the loyalty Canadians have toward the retailer.
Canadian Tire plans to invest an average of $575 million each year on business improvements including expansions and upgrades to its store network.
These investments will be costly but will pay off, Medline said.
"It's like redoing the plumbing in a house. It's not sexy but it's necessary," he said.
The Mark’s clothing stores also aim to move toward a younger demographic – pulling in men aged 35 to 50.
And Sport Chek is collaborating with Cineplex and Scotiabank to share the Scene loyalty program.
The SCENE point program will launch nationally in mid-November at more than 180 Sport Chek stores.
Canadian Tire also announced it will buy back an additional $400 million of its class A non-voting shares by the end of 2015.