Investors: Canadian Tire Corporation Limited Can Help Grow Your Portfolio

Canadian Tire Corporation Limited (TSX:CTC.A) has evolved beyond the traditional brick-and-mortar retailer to become a digital powerhouse.

| More on:
The Motley Fool

Canadian Tire Corporation Limited (TSX:CTC.A) is one of Canada’s oldest and largest retailers, and the company is now making strides into the digital world, injecting technology into the traditional store model and setting the bar for other retailers to follow.

Here’s a look at how much the retailer has changed over the past few years, how the company will continue to change, and what this means to investors.

The old Canadian Tire

Canadian Tire conjures up a stereotype to most of us: a place for automotive parts, sporting equipment, patio and garden supplies, and various odds and ends. As nostalgic as this may be for us, none of this identifies with the younger generations of consumers who are more comfortable using (and expect) technology to be part of the shopping experience. Canadian Tire had a branding and audience issue and was out of touch with the younger generation.

With these evolving needs of consumers, Canadian Tire was being left behind, and that’s exactly what CEO Michael Medline noted when he took the helm of the company a few years ago.

The new Canadian Tire

Since then, the company has invested heavily in technology to restore the brand and attract new customers. This goes beyond just upgrading technology in the stores; the company went one step further and actually added the technology to the buying process for consumers; technology is used as a tool in aiding the consumer make a decision about a sale–an industry first.

Some ways in which technology has been used include introducing a digital currency, linking sales of seasonal items to weather forecasts, and promoting online-only deals.

While these may not seem like huge changes, they represent the first link in the transition to what the company refers to as it being a “phygital” retail–both physical and digital.

Inside the stores, the changes are more innovative. Customers can step into a driving simulator to try out how new tires will handle in different weather conditions, or they can go for a run on a treadmill that will recommend the right type of shoe based on how they run. They can even put on an oculus rift virtual reality headset and map out how new patio furniture will look in their back yard.

The company is mailing out 12 million paper catalogues to customers, but the catalogues are more digital than people think. The catalogue, known as the Wow Guide, uses image-recognition technology to identify pages within the printed catalogue, so that when a user hovers over an image in the catalogue with their smartphone, they are shown additional content relating to the product or are able to visualize the product in their home.

One benefit of using technology is that the company can get a more thorough read on how many consumers are using the new catalogue. Just a day after being released, the catalogue was already accessed by hundreds of thousands of consumers.

The leaps and bounds by which Canadian Tire has evolved an old and tired brand into something new and exciting is what excites me most about the company. Canadian Tire is clearly evolving and, as a consumer, I am intrigued about what the company will come up with next. As an investor, the opportunities for revenue growth that this transition represents are immense.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

More on Investing

Canadian Dollars
Stock Market

Where to Invest $5,000 in April 2024

Do you have some extra cash to spare? Here are five companies to invest $5,000 in next month.

Read more »

Plane on runway, aircraft
Stocks for Beginners

Up 53% From its 52-Week Low, Is Cargojet Stock Still a Buy?

Cargojet (TSX:CJT) stock is up a whopping 53%, nearing closer to 52-week highs from 52-week lows, so what's next for…

Read more »

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »