Jan 20

Target Canada Closing or How to Fail In Canadian Retail

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Target Canada will soon be closing its doors.

After less than two short years and billions of dollars spent, Target is calling it quits in Canada.  The failure has left many shaking their heads in disbelief (no less then the employees themselves  who seem as surprised as the rest of us);  How could a former Canadian cross-border shopper darling like Target have gone so wrong so darn fast?

Empty Shelves at Target Canada

Empty Shoe Racks at Target Canada

Target already had a substantial Canadian fan base and Canadians love saving money.  Target did a couple of things well but it did too many really imporantt things poorly that it seemed destined for failure right from the very beginning.  What were these mistakes?  What can we learn from them?

Mistake #1Assuming that Canadian shoppers are just like American shoppers aka Understand your Customers

Yes, Canadians do like to shop just like Americans do.  One key difference, however, is that Canadians do not normally like to be mistaken for being Americans.  Canadians love to point out the differences that exist on opposite sides of the border.

My overall impression of the Target launch in Canada was one of arrogance.  I remember they took over Centre Island one day during the summer leading up to their launch.  The ferry terminal became a huge billboard and sales hub,  island ferries were plastered with Target symbols, the walkways were plastered with Target symbols, the beach was scattered with Target tents and Target employees handing out flyers and other things.  It had a bit of a circus-like atmosphere.  I spoke with a number of people that day and there seemed to be a wide impression that we were being invaded.

Empty Shelves at Target Canada

The Dairy Section at Target Canada

I don’t think that most Canadians like this type of ‘in-your-faceness’.  It turns many right off.  All I really wanted was just good value for my money.  Offer good value and I will find it, all by myself.  Then I will share it with my friends.  This is the way we tend to do things up north (well, me at least).

Mistake #2 – Having Empty Shelves aka I Can’t Buy What I Can’t FInd

I can’t say that I ever recall a store having such chronically empty shelves. Even basic items like socks and and t-shirts were often hard to find.  While all stores do have occasional stock shortages, most retailers restock items as quickly as they can.  Target Canada never seemed to be able to fix this problem.  Considering the clout that being a large and powerful company like Target brings, I never really got why they could never fix this.

Empty Shelves at Target Canada

Look at All that Bread at Target

 Mistake #3 – Lack of Accountability aka Who Is the Store Manager?

Target Canada has a very strange corporate structure that shields the store managers name from the public. There were two instances when I wanted to speak to the store manager at my local Target store.  No, I was not screaming or jumping on the counter, I simply had questions on two separate occasions that the customer service staff could not answer.

In both cases the M.O.D. (Manager on Duty) came over to try and help but they were unable to answer my questions.  My request to ask the store manager or to get their name or a way I could contact them was met in both cases with a “We do not give out that information”.  Strange.  Very strange, indeed.  As a store manager, I would welcome the opportunity to meet with my customers.  Just the latest symptom of our vanishing customer service.  

Mistake #4 – Discount Retailers Should Offer Discount Prices

Target Canada prices were never enough to bring people out of their way to shop there.  It was never comparable with Wal-Mart Canada in terms of price.  Target’s launch almost two years ago was met with grand hype and sky-high expectations from customers.

This excitement soon vanished as shoppers were soon completely underwhelmed by the lack of merchandise and relatively high prices.  It was not Target USA, it was an overpriced and understocked Target Canada.  It is hard to win back customers once you have made a poor first impression.

Empty Shelves at Target Canada

Empty Shelves at Target Canada

Mistake #5 – No Prices Listed Online

Sorry Target, but I expect my retailers to let me comparison shop before I go to their store.  I don’t comparison shop for everything online, but I do do it quite a bit for more expensive items.

Mistake #6 – Treating Shoppers Like Cows

Yeah, yeah, we all know that retailers put the items that you want the most at the far back of the store so that you will fill your cart with impulse buys on the way to the dairy section to buy milk, but Target took it to a whole new level.  So there are four walls; one wall has food, the other health and beauty stuff, the other seasonal and electronics, and the fourth has women’s fashion.  Quite frankly, it is exhausting shopping at Target (especially when you have a four year-old in tow).  I also feel a bit insulted being treated like an uncontrollably impulsive credit card toting profit machine.

Summary

Target Canada and its shareholders have learned a very expensive lesson about the retail environment in Canada.  It is very competitive.  Canadians are discerning shoppers who love good deals and being treated respectfully and with their own unique tastes and shopping habits in mind.

Thanks for dropping by.  I hope you have enjoyed reading this post and that you will visit again sometime very soon.

UPDATE 03/29/2015 – Recent Pictures from inside the Target Canada flagship store

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Author: Jason Milburn Google

Frugal dad – focusing my money and energy towards happiness and the things that matter most since around 1985.

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