If Target stores narrow down to one word, it is joy. The Target brand does a great job pushing emotion into their brand. Especially as they compete against an emotionless Walmart. The stated brand purpose for Target stores is “to help all families discover the joy of everyday life.” They openly talk about surprises, fun, ease and inspiration at every turn. As part of our Target case study, we explore how they were never able to replicate that joy in their launch into Canada.
Target's failure in Canada
After losing nearly $1 billion in its first year in Canada, and facing future multimillion-dollar losses, Target discontinued its operations in Canada and closed 133 stores. The news of the closing should not be a surprise. The Target stores were empty. The speed at which they left felt pretty shocking. Our Target case study looks at why they didn’t even make the 2-year anniversary.
It’s not like Canada is all that different. As well, given their proximity to Canada, it should have been pretty easy for them to figure it out. With this Target Case Study, we go through the 10 real reasons why Target failed in in Canada.
Are you not seeing high quality work from your team?
If you are frustrated at the quality of the creative briefs, brand plans, or marketing execution that you are seeing, it is likely impacting the output of the marketing communications on your brand.
While you might have smart people on your team, if they have not been trained on the fundamentals of marketing, you will never see them reach their potential. With our Beloved Brands marketing training, you will see your team make smarter decisions and produce exceptional work that drives business growth.
Our brand management training teaches the marketing skills to help your people gain the confidence they need to reach their full potential. Read more on our Beloved Brands Marketing Training program.
We also provide customized training, which allows you to tailor the training to the needs of your team. Graham Robertson brings a wealth of real world marketing experience, having led many of the world’s best brands. Whether you’re looking to build a strong marketing team or develop your current team’s skills, Beloved Brands can help. Our training will give your team the tools and knowledge they need to drive smarter work and business growth.
Why Target stores failed in Canada
1. Target just wasn't different.
Undoubtedly, brands have four choices for how they can position themselves. They can be better, different, or cheaper. Otherwise, they won’t be around for long. In the US, Target stores have always taken the “different” positioning. Essentially, Target focuses on trendy products for suburban moms with an engaging, broader offering.
At the heart of our Target Case Study, when they launched in Canada, Target stores never found a way to separate themselves. They weren’t different enough from Walmart. Importantly, they disappointed potential loyal Target consumers in Canada, who had already bought into the US version of Target. And, they didn’t seem different enough from Walmart to get “new consumers” to go in and give Target a try.
2. Walmart had already occupied suburban positioning in Canada.
In the US market, Walmart grew up through the 1970s and 1980s as a small town or even a rural brand. Target found success as the suburban, and cooler version of Walmart.
If Target looked at pure demographics, Canada looked like the perfect fit for Target’s suburban positioning. Canada has the biggest middle-class population in the world. And, six main cities dominate Canada’s population base.
However, when Walmart entered Canada in the 1990s, they purchased the retail footprint of Woolco, which was a suburban brand. The Walmart strategy in Canada closely resembled what Target’s suburban strategy in the US. Walmart went after suburban moms, with new/fresh stores, and big wide/clean aisles. The Walmart stores in Canada offered a superior shopping experience than the Walmart stores in the US.
3. Loblaws already occupies low-priced clothing for cool moms positioning.
Loblaws is Canada’s biggest food retailer. They are known to copy great retailers around the world. They viciously attack their competitors. While originally a grocery store, the Loblaws stores have become a mass merchandiser store. Many of the suburban Loblaws stores kinda look like Target stores. Consumers can get the same low-priced clothing for the cool moms, via the JOE FRESH brand. This took away a potential competitive advantage for Target to leverage.
To view, click on the Target Case study photo to see Joe Fresh clothing.
Brand templates for retail brands
Elevate your brand strategy with our powerful templates.
Our brand toolkit for B2B brands is our most comprehensive template helps you communicate your brand plans, brand positioning, business review and creative briefs.
Our brand plan template offers slides for vision, purpose, analysis, key issues, strategies, and execution plans, ensuring a thorough approach to your brand’s development. The brand positioning template guides you through defining your target profile, crafting a brand positioning statement, and developing a unique brand idea, concept, values, story, credo, and creative brief. Finally, our business review template provides slides for in-depth analysis of the marketplace, customers, competitors, channels, and your brand.
Choose the right template for your business needs
4. Target invested too much and too fast in new locations and new employees.
Target launched 133 stores and hired 17,000 employees in Canada. That’s almost half of Walmart’s footprint in Canada, who had been in Canada for 20 years. Target took on the leases of Zellers stores. Then, Target invested a lot of money to fix up these locations. Essentially, the over-investment was costly and crippling to the operations.
Target tried to do way too much too soon. With all their money spent on fixing stores and hiring people, Target stores were unable to deliver the same experience they were delivering in the US.
As a result, Target’s operations were awfully sloppy. The procurement system was so poorly run that empty store shelves were common. With half-empty shelves, it’s hard to blame consumers for not really being excited.
Target should have staggered their launch by starting with Toronto only.
Let’s play armchair quarterback with this Target Case Study. And, let’s back up and see two strategic choices for Target to launch into Canada:
- First, go big with a launch everywhere, fast. (Target’s chosen strategy) This strategy allows Target to gain entry and preempt any competitive attacks from Walmart or local retailers. This requires a huge investment with 100+ stores, 15,000 employees.
- Second, pick limited locations and do it right. (alternative strategy) They could have focused on Toronto, which has 6 million people, filled with suburban moms that Target loves. A moderate investment, but that money could be focused enough to make sure the Target stores were done right.
With this alternative strategy, once having a degree of success, Target could have generated enough excitement and proven that Target will be successful in Canada. And, then Target could have expanded to key markets as they established themselves and managed to create a loyal following.
Take your brand knowledge to new heights with our Beloved Brands playbook
Beloved Brands is a comprehensive guide that covers the fundamentals of brand management. It goes deep on strategic thinking, brand positioning, brand plan development, advertising decisions, media planning, marketing analytics, and the brand financials. This is an opportunity to build your marketing skills to help your career. And, it will provide you with the roadmap for driving growth on your brand.
Marketers see Beloved Brands playbook as a go-to resource, as they keep it within arm’s reach for any new project. We are thrilled to see that it has received a 5-star rating from nearly 90% of Amazon reviewers. Additionally, we have also created playbooks for B2B Brands and Healthcare Brands, catering to specific industries.
5. Target had no money left to actually drive demand.
The best thing about Target’s launch into Canada is that it was easy to get a great parking spot. Moreover, there were no crowds in the aisles and you didn’t have to line up to pay. Why? Because there was no one there.
With all the money went into the bricks and mortar of creating new stores, Target had very little money left over for marketing to support their launch into Canada. There was very little hype, no great advertising, no wonderful launch events, no press coverage, very little on social media. Target never created the demand needed to drive revenue.
6. Target didn't have the same selection as their US stores.
The most loyal Target shoppers in Canada had experience with Target stores in the US for years. There was a base of consumers in Canada who experienced Target stores when cross border shopping or vacationing in Florida, Arizona or California.
These consumers were ready for Target. Yet, they were the first to be disappointed. Their biggest complaint about Target stores in Canada was the lack of product breadth on the shelves. They were expecting the identical offering they saw in Target US. But, that never happened.
Target is JUST a retailer at the mercy of what the manufacturers offer in Canada. There are numerous factors that impact the variety when it comes to Canadian manufacturers–the biggest being the relative size of listing fees that Canadian retailers demand are so big that launching smaller skus just doesn’t make sense in Canada. And, the difference in government regulations or approval will also alter what products can be available for sale.
7. Target US sales dropped the minute they announced they were going into Canada.
Target is a very US-centric brand, with Canada representing their first attempt at an international. And based on the failure in Canada, it might be their last attempt. As soon as they launched, they faced declining sales and share in the US. It was an unrelated issue, but now Target management faced two issues at once. A turnaround strategy to solidify US sales and an inter launch strategy internationally. A good lesson for our Target Case Study. Anytime you divert your attention and divide your resources, you’re likely to miss one of them up, and the Canadian launch suffered.
8. The dropping Canadian dollar messed up their financial contributions.
Target is a very US-centric brand, with Canada representing their first attempt at an international. And based on the failure in Canada, it might be their last attempt. As soon as they launched, they faced declining sales and share in the US. It was an unrelated issue, but now Target management faced two issues at once. A turnaround strategy to solidify US sales and an inter launch strategy internationally. A good lesson for our Target Case Study. Anytime you divert your attention and divide your resources, you’re likely to miss one of them up, and the Canadian launch suffered.
9. Target saw a very little risk of leaving.
When they made the decision to exit Canada, they did so very quickly. And Target showed very little remorse. The opening of their press release started by telling the US manufacturers that this statement had zero impact on the US stores or their standing with manufacturers in the US.
Rather than bite the full financial bullet, Target asked for bankruptcy protection, like Chapter 11 in the US. I guess the question is “why are they asking for any protection?” Yes, they said they would create a trust that would cover 16 weeks of severance pay for “most” of their employees. The “most” line caught my eye, which feels similar to that classic “Up to 70% off everything in-store.”
A pharmacist friend of mine was signed up to move his pharmacy operations into a Target store. When they closed that store, he was left without a home for his operations. He estimates the closure cost him $2 million.
10. Their loyal consumers embraced Target more than Target embraced their consumers.
When consumers care more than the brand, that brand is in trouble. There still are many loyal Target consumers who are disappointed in the news. At Beloved Brands, we believe passion matters, because the more loved a brand is by consumers, the more powerful and profitable that brand will be.
To conclude our Target Case study, we can see they did very little to create any love with consumers in Canada. Their promise lacked any real difference. And they failed to tell their story to the Canadian marketplace. There was zero magic in the way they connected with consumers. And zero magic in the experience in the stores.
I hope our Target Case Study is a lesson to the next retailer who will venture into Canada.
Marketing Excellence
We empower the ambitious to achieve the extraordinary.
Without a doubt, our role at Beloved Brands is to help the ambitious marketers who are trying to improve their marketing skills. Most importantly, we will prepare you so you can reach your full potential in your career. You will learn about strategic thinking, brand positioning, brand plans, marketing execution, and marketing analytics. As well, we provide a suite of marketing tools, templates that will make it easier to do your job, processes that you can follow, and provocative thoughts to trigger your thinking.
Have you gone through an assessment of the marketing skills of your team? Take a look below:
The fundamentals of marketing matter.
Our Beloved Brands marketing training programs cover different streams to suit the type of marketer you are. For instance, our marketing training covers consumer marketing, B2B marketing, and Healthcare marketing.
The marketing fundamentals that we show in this article are part of what we use in our marketing training programs. Ambitious marketers will learn about strategic thinking, brand positioning, brand plans, marketing execution, writing creative briefs, advertising decision-making, marketing analytics, and marketing finance.
Importantly, when you invest in our marketing training program, you will help your team gain the marketing skills they need to succeed. Without a doubt, you will see your people make smarter decisions and produce exceptional work that drives business growth.
Finally, I wrote our Beloved Brands playbook to help you build a brand that your consumers will love. If you are a B2B marketer, try our B2B Brands playbook. And, if you are a Healthcare Marketer, try our Healthcare Brands playbook.
We designed our brand templates to make it easier for you to do your job.
Moreover, we provide brand templates that help you run your brand. For instance, you can find templates for marketing plans, brand positioning, creative briefs, and business reviews. Altogether, we offer brand toolkits with all the presentation slides you need.
Beloved Brands video
Everything a Marketing must know about.
Importantly, Brand leaders need to know how to think, define, plan, execute and analyze with the best of them. Moreover, while the brand leaders don’t really know how to do anything, they are looked upon to make every decision. Have a look at our five minute video on everything a marketer must know. To read more, click on this link: Everything.
To view, use the ▶️ controls to play or volume buttons
If you are looking to make your marketing team smarter, we can help. To get started, email Graham Robertson at [email protected]
Red Bull case study
The courageous pathway to becoming a beloved brand
As a leading energy drink brand, Red Bull has become a household name across the globe. The brand is known for its high energy and exciting marketing campaigns. As well, Red Bull takes an innovative approach to product development. In this post, we will take an in-depth look at Red Bull’s marketing execution, exploring how the brand has become so successful. I hope you can learn from its daring approach and boost your own business. When you think of energy drinks, Red Bull is probably one of the first brands that come to mind.
Our Red Bull case study focuses on Red Bull advertising, extreme sports, distribution, productive and innovation. They take chances most of us would be too afraid to do. This courage helps capture the attention of younger audience.
