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Hudson's Bay Company: Retail Profile

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326 years old ... they are still aggressively promoting, customer focused & bullish on training.

"Sometimes we still feel like courier de bois, paddling upstream with today's tough economy," laughed Roy Speedman. Back 326 years ago, the courier dealt with a different set of tensions. But The Hudson's Bay Company, the oldest chartered trading organization in the world, has never been known to go with the flow.

Roy Speedman, Divisional Merchandise Manager, responsible for buying, merchandising and marketing for furniture and floor covering departments nationally, an award winner for gross profit growth and best overall contribution margin, has been with The Bay family for six years, but he is no stranger to the retail world. He spent 21 highly productive years with Marks and Spencers both in the United Kingdom and, after 1979, in Canada. When they asked him to return to England, he elected to stay in North America, and a year later joined The Bay. "The Bay traditionally is an extremely entrepreneurial, fast-moving company. We can get things done and decisions made pretty quickly."

There are 101 Bay stores across Canada, and number 102 will open this month, a new store in a new mall at Cambridge, Ontario, just off Highway 401. There's a Zeller's store at the other end of the mall, and Zeller's is, of course, part of The Bay family. "Zeller's head office has been in Montreal," said Roy, "but is now in the process of moving to Toronto; we're striving for greater efficiency in many areas. The Bay covers all aspects from the discount department store level, right up to traditional department store merchandising.

"We're pretty aggressive in the amount of resources we devote to advertising. We're providing the customer with good reasons to come to our store rather than others. The Bay's overall strategy is to include incredible values in our ads in addition to specific offers, for example a $749 sofa for $399, no GST (Federal Goods and Services Tax of 7 percent) for one day, or free delivery for one day, all this to create a sense of urgency.

"We have reduced the number of stores selling furniture quite significantly because there is not enough space in smaller stores to do home furnishings justice. We have closed most of our big ticket warehouses. Despite this, we've increased our sales and market share. We're doing more with less and trying to concentrate on larger branches and bigger downtown stores where we have the customer strength and the right quality of sales staff."

Amongst promotions that have worked well for The Bay are "Rooms At A Price!" Upholstery and occasional tables are offered for a limited time period at $700 to $l,000 savings. "It makes it easier for customers in a hurry to make choices like 'What tables should we get to go with this sofa?' The work is already done for them. We've been doing this for a couple of years and will continue with it. Of course, styles change as new fabrics and frames are developed."

Then there are "Bonus" offers. "The customer buys a sofa and loveseat suite and gets a free wingback or swivel chair. This promotion started in February, 1996.

"We've had a lot of success with casual dining and dinettes as a category, and the promotion, "Buy a Pair of Chairs", enables the customer to purchase chairs for $99 or $109 as replacement chairs, to go with a table, whatever.

"We continue to work very closely with our suppliers to develop as much exclusivity as we can, as well as offering tremendous values.

"The Bay has not become involved with the 'Don't pay until the next century' deals. I believe it's a treadmill a lot of people would like to get off. We would rather offer the best value up front. Some of these issues will certainly come home to roost when people have to start paying. There's a psychological reluctance to pay when the furniture is showing signs of wear. But because we don't want to do this, we must create offsetting excitement. The only really wacky thing we do to attract customers is our door crashing prices!"

Roy recently spent a month in the Far East. "We try to get to High Point, to visit our suppliers here in Canada and in the U.S., and to get to the stores on a regular basis. We also have a strong import programme from Asia, a lot of wooden products, occasional tables, and accents with a romantic name, 'The Four Winds Collection'. It is a wicker collection, both indoor and outdoor, and we've had a lot of success with it. The Bay trades wherever it can, just as it did more than 300 years ago."

At the beginning of 1993, The Bay acquired the Linmark group of companies, a buying agency with l3 offices in the Far East. In fact, in this past century there have been a number of acquisitions and other transactions with noteworthy companies, amongst them the Henry Morgan & Co. Ltd. retail chain in l960; A. J. Frieman in 1971; Markborough Properties in 1973; between l950 and l987 Hudson's Bay Oil and Gas, Siebens and Roxy Petroleum; Zellers and Simpsons Limited in 1978 and later, Towers, Woodward's, Woolco and G. W. Robinsons.

Sales training throughout all of the interconnected organizations has always been considered of great importance. Back in 1920, The Bay's "Hints for Salespeople", written by a Mr. Cunningham, proved that good ideas stand the test of time. In part, "Customers first! The customer should have primary consideration in the store. All else should come next. If the salesperson is talking to someone who is not a customer and a customer comes along, stop your conversation and jump up to the customer, find out the customer's wants and do not leave until the customer's wants have been attended to.

"Get to know the customers' names. It's simply surprising how pleasing to most people it is to have others know them and call them by name. The salesperson places himself in a position of power at the very start by this means. The customer likes it, and usually returns to the salesman who knows him personally. It pays all salespeople to learn the names of all the customers who frequent their department." So, it's not just a 90's thing!

Nowadays, The Bay sends out an in-store marketing manual monthly to salespeople. The contents are hot issues, highlights of promotions, product knowledge and reminders of products that have been on the floor for some time.

Said Roy, "Our suppliers provide product knowledge too. For example, bedding manufacturers set up at their factories or showrooms so that salespeople can get information on site. Store managers are charged with motivational meetings on a regular basis.

"On the last Friday of every month, buyers are out visiting stores in Ontario, and they go on trips two or three times a year as a group. In the spring, we went across the Prairie Provinces visiting every store, seeing the trading environment and meeting the staff, putting the face to the name. We also communicate with E-mail across the board to all the stores, and with suppliers as well. Our salespeople are Commissioned Sales Associates, and they have a fair programme. We feel that too many incentives can focus on the wrong things."

Last year, on the 325th anniversary, there were store and community celebrations, parades and memorabilia displays in the stores. The longevity of company traditions and the history involved are important to every member of The Bay family.

Henry Hudson discovered the route to the very edge of what was the greatest global fur forest, but went to his death unaware of the magnitude of what he had accomplished. It remained for Medard Chouart, Steur des Groseilliers and Pierre Esprit Radisson and, through them, the founders of the Company, to reveal the value of his discovery. It took three years, many adventures and much hardship to obtain a Royal Charter from Charles II for sole trade and commerce, "the vehicle for the conveyance of an opportunity of limitless value". In terms of today's geography, the adventurers were given, in l670, Ontario and Quebec north of the Laurentian watershed and west of the Labrador boundary, the whole of Manitoba, most of Saskatchewan, the southern half of Alberta and a large portion of the North West Territories, in all 1,486,000 square miles. In 1821, The Bay merged with their competitor, The North West Company, and their territory included all of modern Canada.

In fact, The Bay's legends are a study in themselves of Canadian history and merchandising. The six original downtown department stores (Vancouver, established in l887, then Edmonton, and in the 1900s, Calgary, Winnipeg, Saskatoon and Victoria) provided the backbone skeletal structure of today's modern department store.

The Company recently donated archival material to the Province of Manitoba, any research minded reader can satisfy her/his curiosity. Just write to Judith Beattie, Hudson's Bay Archives, Provincial Archives of Manitoba, 200 Vaughan Street, Winnipeg, Manitoba R3C lT5, or telephone 904-945-2626.

Roy promises a treasure trove of stories from the time of the first fur traders' quill pens to the computerized negotiations of present day business doyens!

Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada.  In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact editor@furninfo.com.