Consumers Distributing
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Consumer's Distributing was a catalogue store in Canada that operated from 1957 to 1996. At its peak, it operated 217 stores.
The first Consumer's Distributing store was opened in 1957 by Jack Stupp in Toronto.
Consumer's Distributing aimed to reduce costs for customers by storing goods in an inexpensive warehouse, instead of displaying them in a costly showroom. Customers made their selections from a catalogue, filled out a slip with product identification, and waited for staff to retrieve the items from the warehouse.
The company was taken public in 1969, but later sold to Provigo, a Quebec-based grocery retailer.
Hudson's Bay Company, which operates Canadian department stores under the Bay and Zellers names, opened the "Shop-Rite" catalogue chain in competition. It was closed in 1982.
Consumers sought bankruptcy protection in 1996 after an aggressive expansion strategy failed to make the company sustainable. Sales had dropped from $1.8 billion in 1988 to $580 million in 1995. Consumers Distributing was plagued by products being frequently out of stock, and by new warehouse format stores that allowed customers to retrieve products themselves. A similar format store in the United States, Service Merchandise, had also failed at nearly the same time.
Consumers Distributing was plagued more by the perception of things "always being out of stock" due to the catalogue shopping nature of the store. In a store like Wal-mart, customers seeking a particular product go to the store to shop. With the catalogue concept, the customer selects the item either at home while looking through the company's catalogue, or by a group of catalogues in the front of every store. Once the customer picks out the merchandise that he or she wants, the customer then goes to the counter where the clerk then goes to retrieve it off the warehouse shelves. It was not uncommon for a customer to wait on line only to be told by a clerk that the merchandise was not in stock. Consumers did not have a computerized inventory until the late 1980s, which meant that the company was not able to track what merchandise was in the stores or what merchandise was wanted by customers.
When a product is out of stock, or unavailable from the manufacturer, this creates an "out of stock" problem for a catalogue store, which it does not create for a store who displays their in-stock items. When a customer goes to Wal-mart, they see that they have 10 different products in stock. At Consumers, the customer chose one item, which may not have been in stock. They did not see that there were 15 other similar items that are in stock.
Consumers initiated several initiatives to dispel this "out of stock" perception including "super stores" that had all of the available, in-stock products on display; and free home delivery or store to store transfer for items that were not in stock. They also implemented a state-of-the-art inventory system that could check the availability of other stores in real time, and also would suggest alternate products at the store which were in stock. Consumers was one of the first to initiate this "real time" stock check and prepayment of products available at other branches and the main warehouse. Unfortunately, these initiatives, including the superstore expansion, costly free delivery, and costly new inventory management software overextended the company. This, and increasing competition from American retailers such as Wal-Mart and Sears led to the company's bankruptcy in 1996.
