The Canada-U.S. free Trade Agreement (FTA) of 1989 did more than set the tone for globalization of trade in the 90’s. In many ways, the FTA also served to raise U.S. cataloguers’ awareness that Canada existed as a potential market for American products. It also helped that, at the same time, many American direct marketing sectors were reaching (or almost reaching) saturation in the home market. And what could appear easier. Canada presented a ready-made market of about 26 million (in 1989) strong. A market of people who, in general, have a quality of life and value system that appears to be pretty much in line with that of Americans. Add to the decision-making process the perception that Canadians consumers will respond at much higher rates, with higher order values and less payment problems than Americans.
Looking at the catalog business, while U.S. consumers can buy almost anything their hearts’ desire through the mail, that’s not yet the case in Canada. Or, at least, not without working at it. According to current Canadian directories, it is estimated there about 600 consumer mail order merchandise sources in Canada. However, there are very few major, national catalogs.
Among consumer catalogs, the market is, virtually, dominated by Sears and Regal Greetings & Gifts. Mail order merchandise sales, other than by catalog, includes several more major players who dominate their merchandise categories such as Columbia House, Franklin Mint and American Express.
It all adds up, in the American view, to opportunity for entering the Canadian market. It’s not difficult to believe the Catalog Age study that indicated 75% of American catalogers see Canada as their most attractive expansion opportunity.
In catalog product categories and/or market niches, there are some categories reasonably well developed in Canada, but many more with good potential. The Canadian market is, somewhat literally, ripe for the picking…fruit, popcorn, gourmet and health food, cookies and confectionery, all well-developed mail order niche markets in the U.S. are, virtually non-existent in Canada. Omaha Steaks took the plunge and did a test this past summer, but, they were very expensive steaks by the time they hit Canadian barbecues (if they did).
So far, American consumer product penetration into Canada is dominated by apparel catalogs. A 1990 Canadian-U.S. comparative study of percentage share of direct mail merchandise categories put apparel second from the top on the American side and at number seventeen on the Canadian side. L.L. Bean, Lands’ End, Clifford & Wills et al obviously took note. In the past two to three years they have built sizable (by Canadian standards) housefiles ranging up to one hundred thousand. Newcomers will have to offer exceptional product, pricing and service deals to compete.
However, affordable clothing for children is still hard to find through mail order. Upscale home furnishings and linens are non-existent, as are kitchen and cookware products (other than from Sears). No Crate & Barrel or William-Sonoma entrants yet.
Regal Greetings & Gifts Inc. has introduced Canadians to the wonderful world of Disney products but, otherwise, the children’s toys and learning aids category, other than books, has yet to be developed. At the other end of the age spectrum, the senior’s market is also sadly under serviced. And, although Canadians are supposedly “greener” than Americans, there’s nobody like Seventh Generation offering a wide range of environmental products.
A very well-developed category is gardening. Every garden plant, seed, bulb, tool and gadget known to humanity has to be available in Canada from, literally, dozens (That’s a lot by Canadian standards.) of garden supply catalogs such as McFayden, Stokes, Weall & Cullen and Cruickshank’s to name a few. Not likely a prime target for US counterparts looking north, especially considering cross-border restrictions regarding organic and plant material. Selections of garden accessories, outdoor furnishings and decorative items are still, somewhat, hard to find in mail order, although Canadian garden catalogs are rapidly expanding this way.
Also well-developed in Canada is the business-to-business front. There’s Quill, Revere-Seton (the Canadian sub of Seton), Eimicke, Inmac and many others. Add superstores such as Business Depot ( a Staples joint venture) to the mix and the general office and business products category is pretty well saturated. On the other hand, Macwarehouse has targeted the undeveloped niche of Apple product users. Likewise, direct mail software offers have snowballed in the past couple of years. Just like in the U.S., business-to-business in Canada is very much driven by price before product selection or innovation.
All in all, it’s win some, lose some for American cataloguers in Canada.
Charles de Gruchy remembers the way it was