Amazon.com, Inc. (NASDAQ:AMZN) has a new rival in Canada: Hudson’s Bay Co (TSE:HBC). As Amazon continues to take down everyone in its path in the U.S., the retail department chain in Canada isn’t backing down. The iconic store is investing $60 million to compete against the online retail giant in Canada.
Meet Amazon.com, Inc.’s New Rival: Hudson’s Bay Co
Amazon is never afraid of a little bit of competition. But it may have to be up north.
The Bay has invested $60 million in a “Perfect Pick” system. It’s part of its high-tech e-commerce warehouse. This is how it works: you place an order, a robotic system zooms up and down a three-storey shelf, finds the merchandise and then gives it to the workers. From there, the items are packed and shipped to customers in Canada.
Jerry Storch, The Bay’s CEO, says this is the most advanced technology in the entire country. The entire process, he tells the CBC, takes 15 minutes, which is “astounding.” When the robots are going down, they recharge their batteries from the friction against the walls.
Despite its claim that no one can beat it online, it’s losing badly on the web. For the foreseeable future, The Bay may have its work cut out. Not only is it trying to outdo Amazon, it’s also fighting against two popular Canadian websites: Wal-Mart Stores, Inc. (NYSE:WMT) and Best Buy.
But one industry expert believes that The Bay’s physical presence – it has 90 locations in Canada and more in the U.S. and Europe – could actually help it in its quest to take down Amazon.
“They have a distribution network that’s already built, and these stores could be repurposed to become distribution hubs,” said retail consultant Doug Stephens. “It’s a huge advantage.”
Canada was never really on the online shopping bandwagon. Unfortunately for Canada’s brick-and-mortar retailers, Amazon arrived and now consumers in the Great White North haven’t looked back.
Amazon.com, Inc. Has an Online Fashion Sense
Amazon was never really a venue for clothing. That has changed in recent years. You can find numerous brands, like Dockers, Ralph Lauren and Perry Ellis, and many more are coming.
Amazon has been investing millions of dollars into its fashion section. Although some big fashion brands are getting scared, many are beginning to place their clothing offerings on the Amazon ecosystem. Simply put: brand-name fashion is the next holy grail for the website.
Since a large number of Canadians will start to shop for clothes on Amazon, The Bay wants to ensure that Canadians come to them first. With ecommerce sales accounting for roughly six percent of total retail sales in Canada, there is a small window of opportunity for brands to grab a piece of the pie.
For The Bay, the retailer wants to meet customers’ needs, both online and offline.
“I don’t believe it’s a leap of faith,” Storch said. “It’s a strong statement of confidence in the future of Hudsonsbay.com and our future on the Internet.”
If this is a long-term investment then it may succeed with the young generation. Ninety-five percent of millennials – those 18 to 34 years of age – bought an item online in 2015. Their appetite for online shopping is fierce. The Bay has the opportunity to flourish years from now in the online world.
As many critics have alluded to, The Bay just needs to revamp its image to appear cool again.