The Changing Retail Landscape

  People often say to me "you are really smart" and I beg to differ.  As a kid I was an average student and I have never been afraid or embarrassed to share the fact that I repeated grade 3.  At some point however things changed and I became almost obsessed with learning and being "informed" about what goes on in the world especially business and while I am flattered by comments where people say I am smart, there is a difference between exceptionally intelligence and being knowledgeable through information gathering. 

  Early in my career I spent several years in and working up through the retail sector including close to 10 years with Canadian Tire.  It was a great experience, I learned a lot and over the years it has served me well as I advanced through several executive management positions in both Canada and the U.S.  mostly in the manufacturing sector before entering the real estate profession.  Even today I am a voracious reader and ever day I awake thinking "what can I learn today?"  I have also tried to impart this attitude in my kids.

  As a REALTOR® I follow what's happening in the market very closely and not just in the residential but also in the commercial real estate sector as well, particularly retail. Retail like many other segments of the economy such as manufacturing has gone through wide scale change and recent announcements would indicate it is far from over.  Think of the many long standing retailers we have seen disappear, Eatons, Simpsons, Sears, Woolworths, Woolco, Towers, K-Mart, Zeller's and let's not forget about Target's disastrous and short lived expansion into Canada.

  The next casualty I have been expecting to fall is Hudson's Bay.  Their stores are for the most part dated, poorly merchandised with products that in my opinion are over priced and offer poor value for consumers.  In late February Hudson's Bay announced they were closing their Home Outfitters stores and some Saks Off Fifth locations claiming that it will allow them to "further streamline their retail portfolio....."  This could prove to be too little too late.

  Information just released indicates that clothing retailer Gap is closing 230 stores in Canada and the U.S. and at the same time as Hudson's Bay announced the Home Outfitters closing Payless Shoes was doing likewise for their retail outlets across Canada.

 Online shopping through the likes of Amazon is taking a lot of heat for the demise of many bricks and mortar retail outlets but I am not convinced that they alone are entirely to blame.  Let's face it, we are an aging population and personally as I get older I find that I need less.  We instructed our  kids not to buy us Christmas gifts as we need nothing.  Even when I am in need of or in the market form something I expect value whether it's for cloths or a car.  A dress shirt at the Hudson's Bay for $130 is not in my opinion good value no matter how nice it may be.  In addition I no longer find traipsing around a huge mall fun.  Yesterday while in Barrie for a medical appointment I did visit Georgian Mall.  The first thing that jumped out at me was that there is still a Sears sign on the exterior of mall surrounded by peeling paint.  It's been over a year since Sears announced they were shutting down their Canadian stores.  I am surprised that this sign hasn't been taken down and the building freshened up a bit to help attract shoppers at a time when there are other options.

  I will confess that I do some shopping online including Amazon which is typically not for cloths especially for shirts, pants, and shoes etc. that you really needs to try on.  While Costco has a good prices on clothing, the lack of dressing rooms makes size selection a bit awkward.

  Overall I believe the real issue at hand is that we are simply "over retailed" relative to demand.  Some retailers have expanded too aggressively through store expansion and acquisition much of it resulting in huge debt loads that they now find they cannot afford.  I also believe that in recent years retailers have benefited from increased consumer spending driven by low interest mortgages, home equity loads, credit cards and other sources of money.  Many real estate markets across Canada slowed in 2018 and this trend is expected to continued for the next year or two.  If home price appreciation slows or worse drop even slightly, this will certainly have an impact on consumer spending so to place all of the blame on online shopping is neither a fair or accurate analysis of what might really be going on with retail.

  As it has been said many times, we are in the "information age" and I am a great believer that acquiring accurate and timely information is knowledge which is why I endeavour to absorb as much knowledge as I can.  It's not about having a negative attitude it's about been informed so I can be a better person and in the case of real estate so I can provide in depth, accurate and relevant information in order to best serve my own needs and those of my valued real estate clients.

  What are your thoughts?

New Government Qualifications For Drone Use

  Over the past couple of years, drone of all sizes have become an increasingly popular new devise with consumers and some of you may have received one for Christmas.  While they are fun to fly and depending on the model are capable of taking amazing photos and videos, they do come with some inherent risks.  For the past year or more the federal government has been working on new requirements pertaining to the use of  drones.  Yesterday, (January 9, 2019) Transport Canada issued a news release announcing what the new regulations entail.

  I have owned and flown a drone for over two years and have logged dozens of flying hours including during a trip my wife and I made around New Zealand as reflected on the adjoining photo.  In the right hands they are relatively easy to fly.  Like anything else however they are not foolproof and require a degree of common sense, skill, adequate, through preparation and you need to know the rules. 

  Transport Canada as well as other governing  bodies elsewhere defines and treats drones for what they are, they are an aircraft.  In order to enhance my flying skills and knowledge I completed 20 hours of ground school just like I would for a pilot's license.  Topics including flight plans and preparation, safety, maintenance and other relevant topics to flying an airplane.  For several years I have had a Restricted Operators Certificate (ROC) for the VHF radio in my boat, through this ground school course I also obtained an aeronautical ROC.

  I was one of the first real estate practitioners in our area to use aerial photography for real estate marketing.  I use the tern "aerial" because at the time small consumer type drone did not exist.  The photographer I used was licensed and insured.  He flew what was essentially a radio controlled helicopter with a Sony digital camera mounted underneath and it took some great shots see attached).  To this point I have not used my own personal drone in my real estate practice as essentially it is illegal without having a licence and the required amount of liability insurance.  Now that the new rules have been established, I will follow though and obtain all of the needed registration and insurance etc needed in order to be fully compliant with the new regulations and to fly safely.  Before every flight I ensure that my drone battery is fully charged and that my take off point has been recorded into the GPS system of my drone.  Why?  If my drone and controller were to loose radio contact with each other, my drone will automatically fly back to the take off point where I can then land.  My drone will not even take off when I am in close proximity to any airport or aerodrome.  The system simply shuts down as a safety precaution.

  I see a lot of real estate marketing that is using drone photography and I am willing to bet many of aerial or drone photos are being taken by unlicensed and or non-insured operators.  If a drone crashes or otherwise hits a person, car or your neighbour's house, the drone operator better have some good liability insurance coverage.  If you are listing your home for sale and your listing REALTOR® includes drone photos in their marketing efforts then I highly suggest you ask "is the drone operator licensed and insured?"

  Drones can be a a lot of fun but by no means should they be treated as a toy.  By taking the necessary precautions and using common sense I have never been even remotely close to a crash or had my drone fly off never to be seen again.  It's just not worth the risk from a liability standpoint nor would I enjoy having a two thousand dollar piece of equipment lost as the result of carelessness.

General Motors Closures - Where Do We Go From Here?

  Yesterday's announcement by General Motors that is was closing several manufacturing plants in both Canada and the U.S. was grim news for 2,500 assembly workers in Canada, 14,000 in the U.S. plus thousands more with salaried positions throughout the company.  I learned of this pending announcement Sunday night on my way to Toronto via an exclusive story released by CTV news.  While it is unfortunate not only for the affected workers but for the province as a whole, it was not unexpected.  The Canadian retail industry has gone through change ie: Sears and Target and will continue to do so, the auto industry and other businesses is no different.

  On Monday I was one of approximately 400 members of the Ontario Real Estate Association (OREA) attending a conference in Toronto to discuss advocacy issues pertaining to both REALTORS as well as Ontario home/property owners.  Speakers at this event included Premier Doug Ford, NDP Leader Andrea Horwath, Green Party Leader Mike Schriener, interim Provincial Liberal Leader John Fraser, Canada's Ambassador to the U.S. David MacNaughton and lastly former Prime Minister Stephen Harper.  Rarely do you have the opportunity to meet and hear such political talent in the same day and I felt privileged to attend.

  Needless-to-say Monday morning's announcement by GM news impacted the conference, Premier Ford was delayed half an hour in arriving having been on the phone addressing the issue with GM's President.  Whether you like Premier Ford or not, Ontario's new government have moved quickly to address many of the issues facing the Province not the least of which is the economy and the deficit.  Mr. Ford did not shy away from the closure issue acknowledging that GM workers will need assistance in securing new employment.  At the same time he remained resolute that Ontario is "open for business."  Faced with global economic change and competition, he said that Ontario and in fact Canada needs to attract business that includes smart and other up and coming technologies, artificial intelligence and those that represent the future growth of business outside the traditional manufacturing sector.  Ms. Horwath on the other hand touted that the government needs to fight GM's decision in every way possible, as does the head of their Union.  Clearly they have no grasp of reality and they still cling to the belief that unions have a lot of clout.

  My father, a dentist like his farther and brother was a car guy so I come by it honestly.  He was for the most part a strong GM customer.  Growing up we had Chevrolets, Pontiacs, an Olsmobile even a Corvair with the odd Ford thrown into the mix.  My father died in 2001 and I have always thought how shocked he would be if he had lived to see GM file for bankruptcy with the Pontiac and Oldmobile divisions both gone along with Mercury, Plymouth and others.  I as well have had my share of GM vehicles over the years.  In addition to my current car an Audi, my wife has a 1980 Corvette which she drives in the summer and it continues to go up in value.  We also have a 2015 GMC Denauli pick-up bought earlier this year (with cash) for less than half of its original $69,000 sticker price.  Will I ever buy a brand new vehicle again?  Not likely when I can let someone else take a 30% or 40% hit in value in the first three or so years of the vehicle's life.  Also, I am not interested in low interest financing, "employee" pricing or any other gimmicks the auto makers throw at consumers. 

  I moved to Collingwood in 1985 as the result of a transfer with Goodyear Canada.  Goodyear's Collingwood plant was a significant supplier to GM and Ford that included fuel and transmission lines, rad hoses and other hose products.  Those days are long gone.  Collingwood's Pilkington glass plant supplies auto glass for the Chevrolet Impala, a poor selling car that will soon no longer be in GM's vehicle lineup.  My father had a 1962 Impala, he always said it was the nicest car he ever had, I wish I had it now!  Fortunately the majority of Pilkington's business is outside of GM, good for them.

  Following their brush with bankruptcy GM is in relatively strong financial shape.  By means of the direction they announced yesterday, they have chosen to invest in the future which like for may other car/truck manufacturers includes electric vehicles and those that are self driving as reflected by GM's purchase of San Francisco based startup Cruise Automation for $1 billion in 2016.

  Times and marketplace changes driven by consumers will continue to rise and I believe the acceleration of those changes will continue to escalate.  Politicians and unions can kick and scream all they want but trying to fight what consumers want and are willing to pay for is like trying to swim up Niagara Falls.  GM has set a good example for many in business to follow, make the required changes to float with the rising tide rather than try to swing against the current.

  Like everyone I offer my condolences to the GM workers affected by the closure of Oshawa and GM's other facilities.  You will absolutely need to maintain a strong resolve to find alternate work, which may require training for new skills in order to transition into a completely different field of work.  Despite the challenges we all face from time to time perseverance always pays off.  Hopefully Ontario's current government will implement the required efforts to develop employment opportunities in the province's economy that will offer opportunities for these displaced workers as well as for our our children, opportunities that we as adults never had.

How To Win Fans & Succeed

  Being in the real estate profession is not an easy gig but in today's competitive world, nothing is. No matter what your vocation or line of business is, you no doubt have lot's of competition vying for the same customers as you.  Acquiring and retaining customers is not easy, so why do so many businesses put so little emphasis into providing good,customer service ? Throughout my varied career, I have always tried to be the best I can be and most of my employers have operated with the same philosophy and it has served me well.

  Meeting your customer's expectations is no longer good enough, you must exceed them.  In business, word-of-mouth can be your best ally or your worst enemy and this has never more important as it is today. In the non-digital era of days gone by, a customer's experience, good or bad was shared with family and or friends at the dinner table, the office water cooler or a cocktail party.  Today, that same experience good or bad is shared online and within minutes the whole world knows.  Residing in a small town, business can be even more difficult trying to capture customers, the level of business and revenue you need to be profitable.

  Living in a small town I have always tried to patronize the local merchants. This past week I visited a local retailer, a small specialty shop where I was looking to purchase a replacement part for a home appliance. The part is nothing special, it comes in a variety of sizes/styles and is sold in many stores around Collingwood.  Nonetheless, I chose to go to the speciality store thinking that they probably had the best inventory for what I needed. As it turned out, I was dead wrong.

  First, they did not have the specific part in question I required.  I asked if they could order it for me and they said yes but they they would need the model number of my appliance which is understandable although I had the old part with me which contained a part number.  Home I went to get the model number.  I then called the store not once but three times over the next half hour and every call went into voicemail which I thought odd for a retail store.  I returned to the store with the model number written on the back of my business card and asked them to order two of the parts for me so I would have a spare.

  Within 10 to 15 minutes I had a call from the store advising me that they couldn't get the part I needed claiming that the appliance manufacturer did not sell that piece alone and that you had to buy a whole assembly.  Bull---t! In less than 10 minutes I found the part I needed online and ordered two.

  The store in question resides in Collingwood's Downtown Business Improvement Association (BIA).  Every year, the BIA spends thousands of dollars trying to attract customers to Collingwood's downtown core.  Ironically, for the sake of a $5.00 part, one of their members has alienated me to the point that I will never again darken their door.  I guess for a $5.00 part I am not worth much effort but the store in question sells products worth hundreds of dollars and someday I will need one.  When leaving the store on my second visit I helped an elderly couple with the door and they mumbled something about having to come three times from Wasaga Beach to get their issue looked after.  Obviously I was not alone in having some difficulty with this particular merchant.

  My personal belief is that you invest today for business tomorrow.  Facebook is not the only entity that needs "fans," we all do and that takes some effort.  Clearly not everyone or every business subscribes to this theory and they will ultimately be the victim by their own hand.

 Happy Holidays to one and all and Best Wishes for a healthy, happy and prosperous 2016.

Social Networking and "Unmarketing"

Whether you like them, participate on one or think they are just a fad, social networking sites are here to stay.  As with other aspects of the Internet, social networking is having a profound impact on not just the personal aspect of our lives, but also on business as well.  Go to many commercial or corporate websites and icons for Facebook, Twitter and other social networking sites are popping up all over and for good reason as many of these sites have hundreds of millions of participants.
 Last week I participated in a webinar with a chap named Scott Stratten who has authored a book titled "Unmarketing."  Scott speaks with authority about how to market to today's consumer and has 86,000 followers on Twitter.  As with other studies I have read, marketing is no longer about screaming a message to the world about your product(s) and or service(s).  It's about engaging and developing a relationship with consumers, sharing your expertise in a subtle way, providing them with information that is beneficial to them and without obligation, thus creating an image, brand or reputation for yourself long before you ever meet your readers or followers should that day ever come.
  According to Mr. Stratten, one of the fastest growing demographics on social networking sites are those individuals that are 50 plus.  In contrast to this, a study conducted by The American Affluence Research Center found that more than half of the U.S. affluent say they do not participate in any type of social media.  You would perhaps think that the affluent would be those in the 50 plus age range but not necessarily so.  Many of today's wealthy are younger, having made their money in a technology, financial or other field(s).  The U.S. ranks third in terms of smartphone usage with 91% or in excess of 284 million Americans owning an iPhone, Blackberry or similar device thus enabling them to access the Internet and or share information and data on-the-fly.  A phone is no longer a phone in the traditional sense.
  In terms of real estate, many of us engaged in the profession are turning more and more to "unmarketing."  According to Mr. Stratten the only person that cares about our picture on a business card, For Sale sign, bus bench or elsewhere is ourselves and I couldn't agree more.  If you are in business for yourself as am I, the only thing to think about is your client(s) or potential client(s).  If it is not going to be of benefit or value to them, don't do it!  Too many marketing initiatives today are all about self gratification with REALTORS® and other commissioned salespersons perhaps being the guiltiest of all. In the new age of marketing and PR "Unmarketing" will win you more points with consumers but that in itself will be a hard sell with many that are mired in the old way of doing things 

Another "Billion Dollar" Lesson?

This past weak debt laden Intrawest sold off another one of it's ski resorts in an effort to avoid an auction of assets by its lenders on February 19th. Panorama Mountain Village located in southeastern BC was sold to a group of local investors that plan to continue building the facility into one of Canada's top family oriented ski resorts. Although the price was not disclosed, it is reported to be far less than the estimated $100 million U.S. Intrawest received for the sale of its Copper Mountain Resort in Colorado.
As Intrawest continues to negotiate with its lenders, no one for sure knows what will transpire come February 19th during the Olympics when the auction of assets is scheduled to take place and no one can speculate what the future outcome will be for Blue Mountain or the Village at Blue.
One thing is certain however, this is yet another example of an acquisition funded with massive debt gone bad. I am currently reading an excellent book entitled "Billion Dollar Lessons" written by Paul Carol and Chunka Mui. For those of you interested in business this is an excellent book chronicling some of the more significant business blunders of all time including acquisitions made by companies that turned into colossal mistakes.
Purchased by Fortress Investment Group LLC in 2006 for $2.8 billion U.S., Intrawest like a lot of other highly leveraged companies has struggled under a significant debt load. As long as a steady stream of cash flow continues in order to make the loan repayments, leveraged buyouts can be a success. More often than not however, many companies in this position find themselves facing changing economic times or a downturn in sales revenue that ultimately means disaster.
Many experts believe that an auction of assets in this economy at distressed prices will not benefit anyone, especially the creditors. Will Intrawest's woes be another footnote in the book Billion Dollar Lessons? I guess with February 19th fast approaching we'll soon know.