Target failed in Canada for a number of reasons. The Expert Video Captures most in addition to the below
Very Ambitious Goals and too much of Rush
Target was very ambitious about their Growth Plans in Canada while trying to replicate its success model in the USA. Target quickly opened 124 stores and expected to become profitable within the first 12 months since opening. This move backfired eventually because their intent to quickly rush to their goals despite constant bottlenecks, led to a zig zag process of opening of stores without full preparation. This led to out of stock issues which remained unresolved.
Pricing Issues- Higher Pricing in Canada as compared to the US
Many Canadians were aware of the Target US and had experienced buying products in the Target US. This led to a price comparison. Many Customers thought that pricing was way better in the US than in Canada.
Constant Supply and Transportation Issues- Understocked Shelves
Upon opening, Target in Canada quickly began to suffer from Goods Transportation issues. This led to delayed shipments and many subsequent losses. Initial traffic in Target stores was much higher and Target Stores were not prepared to manage that sort of customer rush. This led to poor customer experience and many complaints regarding under stocking of various products.The lack of availability of basic household products made Target look inferior to its competitors.
Walmart and local Supermarkets provided Stiff Competition to Target
The Price did not prove to be much of a factor that could lure Walmart Customers into Target. The discounted products were more or less of the same price as found in the competing stores. Upon opening of Target Stores, local supermarket and grocery chains also lowered their prices to retain their customers. So there was a Stiff Competition all around.
Bad Customer Shopping Experience
There were reports that lot of Customers had better shopping experience in the US as compared to Canada. The Checkout Experience was not at all smooth. Self-service checkouts were quite slow and were fraught with technical glitches. This tested customer’s patience. There were currency issues, incorrect change among others. As such customers were not happy when they exited the stores.
There was overall quite an issue of mismanagement of the Store Staff. New employees were not adequately trained and also had to contend with lack of automation. There was quite a bit of manual work done in entering data of thousands of products. This also led to demotivated Store Staff.
Negative Sentiment and Bad Reputation
Target Canada could not shrug off the negative customer sentiment. Despite having Celebrity Promotions, it somehow did not do the Branding magic. Customers were not happy with the shopping experience, product pricing and availability. This created too much of a negative buzz
While Target had tremendous success in America, it failed to compete in the Canadian Market. It had to eventually close all of 133 Target stores since launch in 2015 after having spent $7 billion on the project.