Kiehl’s was founded in New York City in 1851, and now boasts retail and wholesale accounts worldwide. The company entered the Canadian market via Holt Renfrew in the early 2000’s and in 2004, opened its first freestanding Canadian store on Toronto’s Queen Street West. Kiehl’s now operates 23 freestanding Canadian stores, as well as 49 points-of-sale in host retailers such as Hudson’s Bay, Holt Renfrew, Saks Fifth Avenue and Nordstrom. Kiehl’s also operates a robust e-commerce site, with plans for growth.
The company’s Canadian General Manager, Alexandre Ratté, explained that Kiehl’s now has stores in most of Canada’s top malls and as a result, new store expansion will be limited. The company’s goal is to not oversaturate the market — rather, Kiehl’s will look to strengthen its presence in the Canadian market by enhancing brand awareness to further gain market share both for its stores as well as existing points-of-sale.
Kiehl’s has the strongest brand awareness penetration in Western Canada, he explained, particularly in the Vancouver area with its high Asian population that spends on skincare products. The Greater Toronto area is close behind in terms of brand awareness and, this year, the Quebec market will see an increased focus in marketing as well as potential new stores. The company will soon announce a partnership with a well-known person in the province, and philanthropy will be involved in a new campaign. As well, Kiehl’s will gain a presence in Quebec City, according to Mr. Ratté.
‘Localization’ of the company’s stores will also be a strategy to differentiate the brand. Mr Ratté noted that some large chains operate locations that are ‘cookie-cutter’, regardless of geography. Kiehl’s is looking to add uniquely ‘local’ features to stores, including locally-based artwork, tile and other design features to create a sense of place. A shopper in a Montreal Kiehl’s, for example, will be reminded that they’re in that city by subtle elements in the store’s design.
‘Personalization’ is another initiative for Kiehl’s — last year, the company launched a personalized facial skincare serum called Apothecary Preparations in Canada. Apothecary Preparations is currently available in only nine Kiehl’s locations (Vancouver: Robson Street, Metrotown, CF Richmond Centre. Toronto: CF Toronto Eaton Centre, Yorkdale. Montreal: Ste-Catherine St., CF Carrefour Laval. Also at CF Chinook Centre in Calgary and at West Edmonton Mall). After an initial consultation and analysis, the customer is provided with a customized serum tailored to their skin needs, with each bottle including the customer’s name. Mr. Ratté explained that the highly successful initiative will eventually be expanded into other Canadian locations, adding to the company’s goal of differentiating offerings while providing increased personalization.
Kiehl’s will continue to expand its Canadian operations in 2017, though at a slower pace than in previous years. A new store location is about to be confirmed for a shopping centre in suburban Vancouver, and the company is in negotiations for a bigger presence in Hudson’s Bay stores. Kiehl’s is also looking to expand its digital presence in Canada. In 2017, the company’s e-commerce site will promote click-and-collect, further merging the in-store experience with online.
Kiehl’s has partnered with Oakmont Real Estate Services as its representative brokerage in Canada. The retailer generally seeks retail space in the 700 square foot to 1,000 square foot range, with an average of roughly 850 square feet, according to Mr. Ratté. He also noted that there’s a difference between its mall-based stores and street-front locations — mall stores drive traffic and sales, while street-front units act as a community destination while also creating brand awareness.