As recently as a decade ago, Canada held a plethora of Titans in retail and electronics. We had Woolco, BiWay, and Bargain Harold’s, all major Canadian retailers that have since gone extinct. We also had Nortel Networks, a giant on the electronics scene that collapsed horribly in 2009(1). The Bay, another major retailer, fell under creditor protection and managed a minor revival, but does so on the back of HBC’s other major retail outlet: Zellers(2). The tech sector is sadly watching the slow demise of Research in Motion (RIM)(3), which sounds like a major death knell to most of the Canada’s remaining tech industry.
Canadian retailers have struggled as American big box stores have begun their invasion. Walmart’s ability to buy in bulk allowed them to obtained huge discounts on their products, effectively undercutting anything Woolco and Zellers could offer. Additionally, Walmart did something that Zellers never attempted: they kept their stores in good condition. And unlike Sears, another Canadian retailer closing stores across the country, Walmart and other invading luxury clothing stores eliminate products from their selection that underperform.
Keeping up to date in products, appearance and customer service has been amongst the greatest struggles for Canadian retailers who, because of our much smaller population, don’t have the same purchasing power as American companies. For places like Zellers, updating appearance could have done wonders for maintaining the brand. Unfortunately, most Zellers stores were updated in the 1980s, and their appearance still reflects it with ancient shelving (usually in pieces in the middle of an aisle), broken and/or faded signage, and customer service representatives with morale so low they’re jaded, cynical and unwilling to assist anyone that was able to overlook the store’s shuttered appearance and bothered to go in the store. A store that looks broke doesn’t attract business very well, and so like Woolco, BiWay, and Bargain Harold’s, it doesn’t come as a surprise to anyone that Zellers will be disappearing in 2013.
RIM, which had reigned as the #1 smartphone manufacturer for ages, is also trying to play the catch-up game. Much like most Canadian retailers, RIM failed to keep up with the times, and in many cases, didn’t even try. After all, RIM claimed that cameras on cell phones and mobile browsing were minor fads that could easily be overlooked. They derided the idea of touchscreen smartphones and relied on the same basic models and operating system for years upon years. As realization that they were losing a large amount of market share began to sink in, they released half-baked hardware, like the original Blackberry Torch and the Playbook, which failed to excite, massively underperformed, and failed to catch up to competition from Apple and Google.
BBX, Blackberry 10, or whatever they’re marketing it at these days, has been delayed numerous times. These delays, and the lack of any real groundbreaking development announcements drains RIM’s momentum and feeds to investor’s worries. At this point, Microsoft, which has almost zero market share, looks better positioned to make a mobile comeback using Windows 8 on tablets and cellular phones than RIM with it’s again delayed (to January 2013 this time) BBX. Some are optimistic about RIM pulling an Apple-like comeback (4), but I tossed my Blackberry for an Android device a couple years ago and haven’t been tempted to return since. RIM is going to need to pull something revolutionary out of their R&D department fast if they want to regain and retain any sizable position in the smartphone market.
With many of Canada’s retail and electronic titans either deceased or on life support, a troubling trend becomes apparent: we’re draining talent, money, and expertise abroad. Small start-ups in Canada tend to be acquired and relocated by foreign companies, and larger companies also see major bids from foreign interests. This extends beyond retail and electronics, as we saw with the sale of Inco to Brazil in 2006(5), and the upcoming purchase of NEXEN by China(6). If Canadian companies are going to take any place on the global market, we need to not only keep up with the times, we need to take a leap ahead. We also need to stop selling out the moment we begin to build any momentum. Teaching our entrepreneurs that making a company a minor success so you can sell it to a large company is not the message we need to send. It’s time for a different approach. To steal a slogan from a major American company that saved itself (Apple), it’s time we “Think Different”.
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