Changing Tide at the Bay: Q&A with Tanbir Grover

The HBC brand has been around since 1670, but you only launched your online store in 2010. Would you say that you’re trying to catch up to the demand for online retail?

Canadian consumers are getting used to the idea, since for a while they only had things like Sears as big online retailers.

Part of what we’re aiming to do is not just educate but to really build a great customer experience online, and you can’t do that in under a year.

When the Bay was not transactional online there was a lot of disappointment. There were complaints: “I can ‘like’ you but I can’t do anything about it, I have to go to the store to do that.”

As much as Canadian consumers may not shop online, they have an expectation that you’re available to be shopped online and I think driving the e-commerce business made more sense from a value generation than it made just being on Facebook for a deal that was happening in the store.

In 2010 Canadian consumers spent $16 billion online for products and services and that number is set to double by 2015. Now that you have your platform in place, do you get to sit back and watch the dollars grow?

We’ve taken some preliminary steps in the online space. Obviously we can put more brands out there and make more products available.

To organically grow is a safe way to grow, but it’s not fun. We’re an aggressive start-up in a 300-plus-year-old company that sees and cherishes the online channel as a great place to grow sales, relevance and increase our offline sales as well.

Your reputation as a cool, modern brand was bolstered during the 2010 Vancouver Olympics. Have you been able to hang on to the buzz? 

Definitely. The Olympics was such a pinnacle moment, being held in Canada, and HBC being the official clothing sponsor behind it.

It all comes down to understanding what Canadian customers want. Look at some of the product lines we’ve launched, like Topshop. They are very cool brands that appeal to a much younger demographic, but it represents the new Bay.

The big news on the retail scene these days is Target’s expansion into Canada. How will this affect the e-commerce side of things at HBC?

We are focused on the differentiating factors we have in our business that can be used to compete against Target.

We’re actually looking forward to Target coming to Canada because it does change the consumer sentiment for e-commerce and it will drive more activity.

What do you mean when you say, “content is your most important tool as a retailer”?

Without good product descriptions, without good imagery, it’s very hard for a consumer to want to buy a product.

With online retail you don’t have the luxury of touch, feel or smell, so you have to lift those responses through content.

There’s also the idea of enriched content, where you’re incorporating user-generated reviews and other content that brings products to life.

One of the big challenges in Canada is the cost of shipping. Is this problem solvable?

I think so. If you get more retailers coming into the online space, those costs will come down. Shipping will probably follow what the U.S. has done, which has been to become a norm, versus trying to generate revenue through shipping costs.

At the same time in a Canadian marketplace people have price transparencies. They’re comparing products more than ever before, and are able to make those decisions in accordance.

Price of shipping will follow that value chain, so it’s important to stay competitive on that aspect. There’s a number of components we’re still trying to figure out.

What are your metrics for success? Is the priority to sell stuff online, create awareness that will transfer to in-store shopping, or gauge consumer interest in your products?

Unfortunately the answer is: everything. As a business we are obviously a sales channel. We also know that we can drive a lot of offline activity by being online.

A great example is a customer seeing a product and walking into the store with more of a definitive idea of what they want in terms of a purchase.

The beauty of online is not just looking at it as one channel. It becomes the doormat to a store. We know that the multi-channel customers drive far more value than a customer who shops in individual channels.

Our traffic has been growing week over week and so have our sales. We know that customers are engaging in our site because we’re getting feedback and seeing demand when we do deals like Flash Sales, or One Day Sales, and the website drives a lot of that traction.

Walmart has a special promotion where if you “like” a deal offered only on Facebook, you can print the coupon and bring it into the store. Do you plan to experiment with that kind of thing?

Absolutely. We see social media as a very important part of our digital strategy. We have a blog (B-Insider), we have Facebook, and we have our Twitter account.

We’re trying to integrate all of that together so that it’s one synergistic message. Again, being a very old and big company, just lining up all of that stuff to the ideal or future state will definitely take time.

HBC has a very long, rich history. Do Canadians still feel ownership over the brand? How do you build that sense of heritage into the e-commerce platform?

I absolutely think it’s there. With our president today, Bonnie Brooks, you can see all the things she’s doing to drive the Bay: new brands, new Bay.

Our HBC signature collection is only available in a select number of stores but through the online channels it’s available to every Canadian, which celebrates that heritage. From the Bay blankets to our HBC cup, we’re making them accessible online.

Through time we’re going to be telling that story more and more on the website. We need to share that rich history and make it a part of the fabric of every Canadian.