Thursday, January 15, 2015

Why Target Failed in the Canadian Market

Target is abuzz online today as the store officially announces its decision to pull out of the Canadian market after 2 short years. With the recently announcement, many on Twitter are calling from Zellers stores to reopen. No word from Zellers officials yet if there is any consideration to open even a small amount of new stores in 2015.

It’s been clear since day one that Target didn’t do it’s homework before entering the Canadian market. Only a few short months after Target Canada opened its doors, many shoppers began complaining about the noticeable higher prices. It seems, it’s still cheaper to head south to shop at Target. Another big complaint from shoppers was the lack of product offering in Canada. 

When a customer gets used to certain products in the US stores, then often expect the same from the Canadian division of the store. Many customers were complaining that, even if they wanted to shop in one of the Canadian stores, these stores didn’t offer certain products that they were looking for, thus leading them across the border once again. 

Another large complain Target has been receiving is their lack of online shopping ability in Canada. The online Target store offers online shopping, but no shipping to Canada. With the move into the Canadian market, many Canadian shoppers were looking forward to this feature. This past Christmas was a great example of where Target missed their mark with the online shopping ability. A great example that a shopper gave online this past week, when doing price comparisons online with competing retail stores, they were able to find prices and product information from stores like Wal-Mart and London Drugs, but nothing from Target Canada, which meant Target Canada was essentially left of the list of possible stores for certain online savvy shopping to do their Christmas shopping at. 

Sadly, Target struggled with many things that led to their demise, including higher cost of importing products into the Canadian market, mismanagement within the company, higher employee wages in Canada, along with the fluctuating dollar, and higher product labeling costs due to Canadian labeling regulations. This combined with customers still hitting the border for better product selection and lower prices, lead to lower than expected Canadian sales. 

This week, with Sony, Target and Mexx announcing the closure of several hundred stores across Canada, the Canadian economy will surly feel the impact this spring/summer.

Will you continue to shop at Target across the border?

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