by Saeed Khan
Target is a retail giant in the United States, with about $75 Billion in revenue and over 1,800 stores nationwide. In 2012, Target announced it would open stores in Canada; it’s first international expansion beyond the United States.
In March 2013 Target opened it’s first stores in Canada, quickly expanding to over 130 stores across the country within the first year.
And then, less than 2 years after opening it’s first stores in Canada, Target announced that they were closing ALL Canadians stores, and laying off all 17,000+ employees including some at their Minneapolis headquarters who were hired to oversee the Canadian operations.
The state of the failure is significant, with almost $5 billion to be written off by Target.
How did Target fail so miserably and what can we learn from this fiasco?
1. Understand and meet market expectations
First, it’s important to understand Canadian consumers. We loved shopping in Target stores in the US. They have good prices, good merchandise selection (many items not available in Canada) and very helpful staff. When shopping at a large retail store, what else could one want?
When Target announced they were going to open stores in Canada, many Canadians expected those same attributes — price, selection, service — to be part of the Target experience in Canada. Sadly, that was not the case. Prices were mediocre, selection was poor and the service was nowhere near what it was in the US.
Great Customer Service (in the US)
For example, I was once in a Target store in Sunnyvale California. I asked one of the staff where I could find a clothing item, and the person literally walked me across the store and pointed out exactly where that item was and made sure it was what I was looking for. He then walked back across the store, I’m assuming to resume what he was doing.
This level of service was nowhere to be found in the Target stores in Canada. The staff were competent, but competent is not memorable, and certainly didn’t meet expectations set by their American coworkers.
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