New Trends – Retailer Expansion in Canada

Several retailers have identified Canada as an area ripe for new revenue growth. They have noticed the stronger Canadian dollar, the opening of availability of retail locations as some other retailers shutter their stores, and 50% higher average sales per square foot than the U.S.

The new entrants hope to replicate the success over the last several decades of Home Depot, Staples, Costco, and Wal-Mart. Canada’s population of 35 million is close to California’s population of 38 million, making it an important area of opportunity.

Cabela’s

Cabela’s, the $3.6 billion retailer of products and apparel for hunting, fishing, and camping, is picking up their pace of expansion in Canada. Cabela’s entered the market slowly in 2007 and explored what it takes to be successful with a new cohort of consumers in a different country. Its plans now include doubling the number of stores by next year.

Cabela’s currently has 58 stores in North America and plans to add a total of 19 more in the coming two years. They seem to be on track for continuing to grow revenue and profitability by double digits as they have for the last five years.

Nordstrom

This year Nordstrom is adding its first Canadian store. Nordstrom will open one store per year and plans to have a total of six stores by 2017.

Target

Target opened 124 stores in 2013 after acquiring over 100 Zeller store locations. While Target’s troubles have been widely publicized, it has addressed one of the most difficult aspects of expansion in Canada – the acquisition of store space in a very tight retail market controlled by a few major players.

Wal-Mart had a similar strategy in 1994 when it acquired Woolco’s Canadian stores and it has not looked back since. In contrast, Lowe’s wants to expand north of the U.S. border, but is having trouble lining up locations.

Target’s sophisticated supply chain is adapting quickly to the fulfillment needs of the new stores and to ending the problem of empty store shelves. Over 30,000 new items will be stores by Christmas as Target adapts to the tastes of Canadian consumers.

Canadian Retailers’ Response

Canadian retailers are reacting. Hudson’s Bay Company is remodeling stores. Canadian Tire is emphasizing its digital strategy like many U.S. retailers.

EDI Requirements

Canadian EDI invoices can be complicated because of taxes. Taxes on invoices can vary by product type and province. As always, EDI invoices have to be perfect in order to be paid.

We have extensive experience with Canadian retailers and over 1,000 EDI trading partners world-wide. Contact us anytime to find out more about how we can assist your small business with Canadian EDI solutions.

Trading Partner EDI Updates

Trading partners of small businesses change their EDI compliance requirements from time to time. Here are a few notable changes for the summer of 2014.

Target.com Import Vendors

Target.com used to exchange order information with import vendors using email and fax. The requirements have changed. Now order information with import vendors must be exchanged using EDI documents. Even If your import company already does business with Target Stores, you will need to have Target.com set up because the EDI ID used for Target.com is different from the ID used for Target Stores.

Currently the mandatory document types are an 850 purchase order and an 860 purchase order change. Although other document types are not yet required, document types used by domestic vendors such as advance ship notices, invoices and inventory update will probably be added in the future.

Saks Fifth Avenue

Saks Fifth Avenue was recently acquired by Hudson’s Bay Company (HBC) and EDI operations are being standardized across the combined companies’ supply chain technologies. Vendor numbers are changing and new store numbers are being used for both Saks Fifth Avenue and for Saks OFF 5th stores. Bill of Lading and Tracking information continues to be a stringent requirement for Advance Ship Notices (ASN’s) and Invoices. The Billing of Lading information on ASN’s and Invoices must match.

Two new transaction types are being added. Saks will start sending 824 Application Advice EDI documents to communicate EDI errors to speed up response from suppliers and EDI 180 Return Merchandise and Notification EDI documents will be sent so that detailed information can be sent by Saks concerning returns.

McKesson

McKesson Corp has added to new requirements for suppliers who send them Advance Ship Notices. The ASN’s for products regulated by the FDA now have to include product strength, product dosage, container size, and a statement concerning the tractability of the product through ownership changes. Read more about McKesson and other trading partners affected by FDA regulations in this blog post – ASN Changes in the Pharmaceutical Industry

CovalentWorks EDI solutions keep up with the changing EDI requirements from our clients’ trading partners. Contact us anytime to find out more about how we can assist your small business by handling EDI headaches for you.

20 Reasons to Switch EDI Providers

Many of our clients have switched to CovalentWorks from another EDI provider. Clients made the change because their provider’s service did not meet their expectations, the solution did not satisfy their needs, or costs were too high.

Here are the 20 most common reasons our clients have given us for switching their EDI provider to CovalentWorks.

Service

  • 1. The client was not happy with the support personnel of their old provider.
  • 2. Implementation of a new EDI partner was taking too long.
  • 3. The client was initially mislead into believing they had to use a certain “preferred” EDI provider. The service, cost, and solution of the old provider did not add up to the value they needed.
  • 4. The EDI provider they were using was acquired by another company and subsequently service had declined, pricing had increased, or both.
  • 5. Little or no online help was available for self service.

Solution

  • 6. The EDI software they were using was not supported any longer.
  • 7. Their EDI software was not working anymore and the people who understood how to fix it had left the company.
  • 8. Rather than using EDI software, they had web forms, but the web forms were slow or hard to use. The solution was not scalable as their business grew. There was no capability to quickly do batches of advance ship notices and invoices.
  • 9. They could not download a simple csv file or raw EDI file from their web form pages.
  • 10. EDI Integration with their systems was not available, or was too expensive. Manual data entry into their systems was slow, labor intensive, and prone to errors.
  • 11. The client had a 3PL (Third Party Logistics Provider) and the solution did not meet the needs of the client and their 3PL.
  • 12. A new EDI customer partner they needed was not supported. For example, the client wanted to add Walmart but the old provider did not support them.
  • 13. Their EDI customer had new required EDI transaction types that were not supported.
  • 14. New versions of EDI being used by their EDI customers were not supported.

Cost

  • 15. The cost of the old provider was too high.
  • 16. There were expensive add-on fees for additional trading partners, for additional users, or hidden fees they found out about after they started using their old provider. Integration was prohibitively expensive.
  • 17. Their old EDI provider had expensive premium partner fees for some partners which the client found out about when they needed to add a new partner.
  • 18. Upgrades and maintenance to their EDI software were too expensive.
  • 19. Adding a new EDI partner to their software was too expensive.
  • 20. Their old provider required an expensive long-term contract and they preferred a month-to-month service.

Clients switch to CovalentWorks for all of the above reasons. They stay with us because they get the service and solution they need at an affordable cost. Contact us anytime to find out more.

10 Must-Read EDI Topics for Small Businesses

CovalentWorks has recently added new EDI white papers that cover important topics of interest to small businesses who sell to large customers.

The 10 white papers are pdf downloads that are available for free.

Go to EDI white papers for links to all 10 of them.

  1. 3PL Basics for Small Business
    Learn about the benefits of a third party logistics provider (3PL) and how EDI works efficiently with a small business, a 3PL, and the small business’s customers.
  2. Chargebacks and EDI Guide
    The possibility of chargebacks from large customers can be intimidating for small businesses. Learn the common causes of chargebacks, why your customer has them, and best practices for avoiding them.
  3. Common Terms Related to EDI
    This white paper takes the mystery out of EDI jargon. The most common business and technical terms related to EDI are explained. Common acronyms are included.
  4. Electronic Data Interchange Training Basics Guide
    This guide is written for small businesses that are new EDI. It includes an overview, a review of how EDI works for orders, an explanation of why you need EDI, and frequently asked questions.
  5. History of EDI
    EDI is surprisingly long-lived and has been around since the 1960’s. This whitepaper has a time line of major EDI developments from then until today. Why EDI will continue to matter is explained.
  6. How to Evaluate Outsourcing Your EDI Requirements
    If you are contemplating whether to build your own EDI capability or outsource your EDI needs, this white paper is a must-read. Key questions to ask and benefits to consider are covered.
  7. How XML and EDI Helps Improve Supplier Efficiency
    Many small business systems have the ability to interface with XML files. Learn about XML and how it helps increase supplier efficiency.
  8. Overview of EDI in Drop Shipping
    Drop shipping direct to consumers and retail stores is on the rise. Learn how the drop ship process works with EDI and with branded packing slips.
  9. Retailer Buzzwords
    Understanding your customer and the retailer buzzwords they use is covered in this enlightening white paper for suppliers who are new to the retail industry.
  10. Tips for Selling Your Product to Major Accounts
    Discover tips for selling your product to large customers based on experience gleaned from conversations with thousands of successful small businesses.