Target's Canadian expansion has not gone well. Launching amid great fanfare a couple years ago, the American retail giant has mostly lost money in their attempt to capture the retail market in the country. Since it's always fun to speculate on what they did wrong, let's try to figure out why Target has not worked.
The problem comes down to expectations versus reality. In launching their brand in Canada, their message was largely ignored. Customers knew what they wanted, and that was Target in the US, except closer to their house. That meant prices that were cheaper than what the company was ever going to deliver in this country, and when they did not see that, people also did not see any other reason to continue paying attention to the store, and now the chain is struggling.
In a way, the expectations of consumers were never realistic to begin with. Stuff is just cheaper south of the border, sometimes for good reasons, sometimes for flimsier reasons. For the most part, people expect that, because it's just reality, even if they spend a lot of time complaining about it and will avoid certain products if the price difference is too extreme - after all, it's not like we don't know when a company is trying to jack up prices for no good reason, and we can easily check what everything costs south of the border now that the internet exists. However, when a company is mostly marketed as a price leader, and has brand recognition as one that delivers cheap products, you begin to expect something the eventual store had never intended to deliver.
The result was a chain that was never going to be as cheap as the customers wanted. That might not have been a problem if they at least delivered products the customers wanted anyway, or gave a reason to switch stores and change spending habits. What Target delivered was not actually all that new and exciting however. The products were mostly fine, the stores had a nice enough layout and an appealing color scheme. But it's not really enough, there's no reason to go out of your way to go to a Target store. There's nothing wrong with it so much as there's not much of a hook. In setting up their Canadian expansion, they neglected to actually separate themselves from the retail crowd. They did not have price as the big selling point as expected, but they didn't replace that selling point with anything else, and it soon became apparent that you went shopping at Target only because it was the store in a convenient mall.
That's fine, but it's also not a big draw, especially for out of town shoppers. If a Target were to hypothetically set up shop in Yorkton, for example, it would likely do okay but not great, depending on how convenient the location was. But, there's really no reason for someone from Yorkton to go to a Target if they are out of town, it doesn't have anything we can't get at home. The problem the chain faces is that they kind of set up their expansion under the assumption that the chain would be a draw for people and do great business, but they launched a retail chain that was merely a decent department store in a sea of competition. Without a real hook, without something that only Target can offer, the retail chain will continue to suffer in the Canadian market.
