Target Corp. is a popular American retailer, which operates mainly in the United States and Canada. Founded in 1902, the firm is headquartered in Minneapolis, Minnesota, and is the third largest retailer in North America.
In 2020, the company’s revenue was $100 billion, and the firm employed at that time 617,000 people.
Target’s in Canada had poor management, the company had terrible employees, and there were even rumors that the company was hiring people that had come from other major retailers because the Target team in Canada was so bad.
Why Did Target Fail in Canada In 2022?
Target has a pretty good reputation for not stocking what many of their customers are already shopping elsewhere. Target has been slow to design and stock its stores on the whole, and their stores are often difficult to navigate in.
In Canada, Target is not the cheapest store and is actually more expensive than Canadian department stores like Hudson’s Bay and Winners.
1. Target Was Too Ambitious
Target was too ambitious when expanding into Canada. They were relying heavily on their success in the USA and this was not enough for them to succeed.
In just two years, Target opened a total of 124 stores and expected to make money within the first year.
Due to the large number of stores they’re opening around the country, they are putting a lot of money into the business and opening with a lot of product they’re not sure will sell.
Target Canada did not make any efforts to collect sales reports for its Canada stores.
2. There Was a Rush to Open
Target invested quite a bit of money into Canadian operations, since they didn’t have a good idea where the market was going.
The desire to adhere to the schedule and adhere to a constant plan was the reason this project ran as it did. It was rushed to make it happen, the people didn’t have time to make sure things were done correctly, it just had to be.
The stores were opened without preparation of shelves and counter, and without rectifying the problems.
When open, staff were restocking shelves to fill the store, with signs around stores stating ‘we’re open (mostly)’, making it look unfinished.
3. The Pricing Was Higher Than In The US
Many Canadians were already familiar with Target as a brand.
Of Canadians, four-fifths live between 100 and 250 miles from the U.S. border. Among these, more than two-thirds live within 100 miles of the border. If border restrictions remain as they are now, only a third of Canadians can bring back products from the United States in tariff-free.
Target Canada didn’t sell its products at lower price because of the different tariffs and higher taxes imposed by the government.
While initially, shoppers thought this was a wonderful experience. It then soured after they found out that you can’t eat food purchased from there.
4. Constant Supply Issues
In its first hour of trading on the NASDAQ, Target experienced issues in its trading system.
Most overseas products were very poorly suited for sale in North America, with the exception of a handful of luxury brands. The fact that most of these brands are owned by companies from outside North America also caused problems, as those firms did not understand the North American market. Not surprisingly, when those companies were sold to US/Canadian based entities, many of them failed to adapt their products to American markets.
Due to the rush of opening so many stores, Target does not have to address such inefficiencies.
Target announced on January 29, 2012 that its sales are below their initial forecast for the holiday season, and they blamed this on the winter weather hitting the Midwest and Northeast.
The rise of social media changed the way consumers communicated with one and other.
The three distribution centers were full of products and the distribution is planned to be completed in two weeks.
It became well known that the Target organization failed to keep a very high standard.
The negative perception of the bank as a whole did not help.
The company had a very good relationship with the business community.
5. Poor Choice Of Locations
As Target continues to expand nationwide and build out its stores, it is making use of other small to mid-sized regional retailers as a way to increase its market coverage and customer base.
Target had paid $1.8 billion to become the US market leader. They wanted to increase their profit, since they had been a successful business thus far.
While some were not well-suited to Target, many of them were large stores that could be expanded to the American norm, which were also more profitable than the smaller Zeller’s locations.
The Target Target store is more expensive to build because the stores are smaller and there’s a requirement to redo every aspect of the store.
They also tended to be located in old shopping centers, outside of the shopping areas of Target’s middle-class demographic.
The lack of sales meant the business would not be worthwhile in the long run.
6. Target Underestimated Walmart and Local Competition
Unlike the Target’s upscale products which were the same price as department stores or fashion boutiques, its everyday, discounted goods were the same price as competing and established stores such as Walmart.
Walmart and Loblaws were able to adapt to Target’s opening and raised their prices so that it was more competitive with their overall pricing structure.
This new tactic has completely changed the consumer behavior and created a new competitive environment.
7. Poor Checkout Experience
Target had a bad experience with their Target Canada website. It promised to be faster and easier, but users were confused about how to make purchases.
The Target database was not equipped with foreign language support for Canada, the Canadian dollar, and French-language characters.
Also, self-service checkouts at my local grocery store give incorrect change on a regular basis, and there’s never any change to give by the cashiers. There’s no reason for it to be that way, and I’ve asked them about this several times.
Customers could leave the store, even though they did not have enough money to pay for their purchases.
Target offers training programs for even junior employees to help develop their careers.
A staff member’s attitude to work culture and the culture within the company is considered more important than the staff member’s experience.
In Canada, they hired employees with the right attitude, but due to constraints, they only gave them a few weeks of training.
New employees have started to make mistakes and have also entered incorrect data into the system. They have also started to notice that there was a problem with the way they were entering data. It is now taking longer to complete their job as they have to search for this data in a new system.
But I’m not sure if my paraphrase is correct, if anyone is able to give me a more detailed answer then that would be appreciated.
The problem lies in the fact that the code expects a list not a vector…
The company is accused of turning off automatic stocking processes so their reports would seem better than they actually were, further exacerbating the issue for Target.
9. Target Canada Coulnt Shake Its Bad Reputation
There was a year of promotional events, events that showed off its design, its products, and how much love they had for the brand.
Pop-up shops will be held for the opening of the show in London. Jason Wu, Sarah Jessica Parker and Blake Lively are said to be appearing in the shops.
They had a very bad season of 2017. They were placed on probation, and were forced to release a YouTube video apology for their failures from last season.
Target is one of the biggest retailers, and yet they failed to expand into the UK.
The Walmart store in Germany suffered such a small market share that the company was unable to keep the staff and infrastructure needed to operate a successful business.
To learn about Target, check out our previous posts on whether or not Target is a franchise, some interesting Target statistics, why Target is so expensive and Target’s competitive advantages.
Conclusion: Why did Target fail in Canada?
Target was unable to find a sustainable business model in Canada. Target made a large number of acquisitions, but was unable to implement their ideas in a market that was not receptive to them and lacked the brand recognition. After all, in Canada, in 2015, it was still quite possible to shop at Walmart.
Target’s reputation was already a lot of bad reviews, and there were more bad reviews and customers were upset by the constant problems.
Target’s failure came through its inability to compete with the market as it did not offer enough variety in its products and was not a very efficient retailer.
They have a website where Canadians can put items on their wish list. It seems like they like to do their best to support Canadian shoppers, but they don’t see much point.
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