Target Canada: the billion dollar mistake

[garbon]

Target sucks.  It's Wal-mart for people who think they aren't poors, and they pass the expense on to you.

However, I've been forced into shopping at Target often, instead of Wal-mart (I mean, both are evil, but Wal-mart is cheaper) due to its proximity and the monstrous nature of urban traffic.

Don't get it twisted, Target is much nicer. It's like 'you want some basic middle-class home goods, we got you covered*. Whereas going to Walmart is like 'if you walk quietly and don't speak, perhaps the natives won't notice you.'

*and you even get to see them before you buy, I'm calling you out Argos.

[Monoriu]

I deeply regret not going to a Walmart when I had the chance. 

[DontSayBanana]

How bad decisions and poor IT killed Target Canada

Very interesting read, imho.

Business school case studies tend to fall into two categories: epic wins and oh-my-gosh-how-could-they-possibly-have-been-so-stupid epic failures. This article discusses a real-world billion dollar story that falls into the second category. As epic failures go, this one is worthy of the history books.

Let's set the scene. Target is one of America's largest and most successful retailers.  The 114-year-old company that evolved out of the old Dayton-Hudson company now has more than 1,800 retail locations.
   Unfortunately, none of those are in Canada. Anymore. And thus begins our story.
This is a story of hubris, impossible deadlines, and information technology. Yes, as it turns out, if you want to be a worldwide retailer, your information systems are the glue that holds it all together. In Target Canada's case, not so much.
   As an American with three Target stores right in our neighborhood, I didn't realize that Target wasn't a worldwide thing. But it's not. Walmart, by contrast, operates something over 11,000 stores in 28 countries. Walmart is a $465 billion company. Target is a $72 billion company, certainly not small potatoes. But Target, it seems, wanted to be more like Walmart.
And so, in 2011, the Target Corporation decided to expand into Canada. That should have been easy, right? After all, we speak the same language (ignoring the French-speaking Québécois) and most Americans somehow seem think of Canada as our 51st, more polite, colder state to the north.
   But it's not that simple. Take two factors as an example. Canada has a different currency. Sure, it uses dollars, but at the time of this writing a Canadian dollar is worth only 72 percent of an American dollar. That conversion rate is constantly fluctuating. Also, Canada uses the metric system. To us in the US, a 2-foot deep shelf is a 2-foot deep shelf. In Canada, that shelf is 60.96 centimeters.
   You can already begin to see the IT problem, can't you?
[...]

That reads as one spectacular major failure to me.  Target Canada should never have been the same business unit as Target USA.  Maybe it's because I spend my time neck-deep in systems analysis these days, but there are obvious differences that were so major that Target Canada should never have tried to use the same processes as Target USA in the first place.  They should have pulled a Google, rolled out a new holding company, say, "Target Ventures Holdings" or something super-creative like that, and had both TC and TUSA as separate businesses reporting to that parent.

I mean, c'mon.  Metric vs. Imperial, US dollar vs. Canadian dollar, Canadian tax laws vs. US tax laws... my systems analysis professor would argue that those are clearly so different that trying to use US processes for a Canadian business is bordering on criminal negligence.

[DontSayBanana]

Target sucks.  It's Wal-mart for people who think they aren't poors, and they pass the expense on to you.

However, I've been forced into shopping at Target often, instead of Wal-mart (I mean, both are evil, but Wal-mart is cheaper) due to its proximity and the monstrous nature of urban traffic.

Maybe it's just our local market (and the fact that they're right across the street from each other), but I find for certain select things, Target actually comes out cheaper than Walmart.  Also, I'm willing to pay a bit of a convenience fee to shop at a store that doesn't make me feel like I had to check my soul at the door.

[LaCroix]

walmart grocery shopping is fantastic

[PRC]

this here makes it sound like you think they pitched their inventory too down-market.

The inventory they were pitching was already in the market.

[Eddie Teach]

walmart grocery shopping is fantastic

Except for the lines.

[LaCroix]

Except for the lines.

never really had this problem 

[Ideologue]

Target sucks.  It's Wal-mart for people who think they aren't poors, and they pass the expense on to you.

However, I've been forced into shopping at Target often, instead of Wal-mart (I mean, both are evil, but Wal-mart is cheaper) due to its proximity and the monstrous nature of urban traffic.

Don't get it twisted, Target is much nicer. It's like 'you want some basic middle-class home goods, we got you covered*. Whereas going to Walmart is like 'if you walk quietly and don't speak, perhaps the natives won't notice you.'

*and you even get to see them before you buy, I'm calling you out Argos.

In certain respects, yeah, Target is better.  (Their clothes tend to be a cut above, to be sure, but I don't care very much about clothes for a lot of reasons* and do my best to avoid buying them.)

*Can't afford truly nice things, don't like supporting globalization in general and the use international slave labor, and of course, that old chestnut, what's on the inside counts more--that is, the body underneath the clothes counts more, not some dumb hippie sentiment.

I did buy a vacuum from Target yesterday.  Sometimes their blu-rays are well-priced.

The grocery stuff people mentioned is 100% accurate, though.  Wal-mart is better, price-wise, than most dedicated grocers.

[garbon]

In certain respects, yeah, Target is better.  (Their clothes tend to be a cut above, to be sure, but I don't care very much about clothes for a lot of reasons* and do my best to avoid buying them.)

Oh, I wouldn't really suggest clothes from either. Near same price range, you'd be better off at Kohl's.

Not sure what I think about how you avoid buying clothes in general.

*Can't afford truly nice things, don't like supporting globalization in general and the use international slave labor, and of course, that old chestnut, what's on the inside counts more--that is, the body underneath the clothes counts more, not some dumb hippie sentiment.

You big making shit then? Presumably locally made clothes are more expensive unless home-made.

Also, while a nice sentiment about value of body/person vs. clothes, you show up looking like a scrub and people will treat you as such.

The grocery stuff people mentioned is 100% accurate, though.  Wal-mart is better, price-wise, than most dedicated grocers.

I wonder though if that's because there are a lot of crap grocers and there is a lot of difference in quality when things are full of sugars, preservatives and dyes.

[grumbler]

I wouldn't shop Walmart for produce, meat, fresh dairy, or baked goods, but their dry goods, canned goods, and frozen foods are decent for a decent price.  I only buy foot there maybe twice a year, though, 'cause hassle (not so much lines, but the size of the parking lot and the store itself).

I tried Target, but the way they constantly move merchandise around the store to make you hunt for what you want turned me off.  I have better uses of my time than spending it shopping at a place that deliberately makes shopping hard.

[celedhring]

I tried Target, but the way they constantly move merchandise around the store to make you hunt for what you want turned me off.  I have better uses of my time than spending it shopping at a place that deliberately makes shopping hard.

Oh yeah, that pissed me off royally too. It's one of those "force customers to wander around the shop so they might buy things they otherwise wouldn't" tactics.

[viper37]

Mono, there are plenty of Chinese people who shop at Costco.

You know what, if I were to live in Canada again, *I* will shop at Costco and Walmart. 

But my wife won't 

with our taxes and the price of real estate in Vancouver?  That's the only thing you'll be able to afford

[Monoriu]

Mono, there are plenty of Chinese people who shop at Costco.

You know what, if I were to live in Canada again, *I* will shop at Costco and Walmart. 

But my wife won't 

with our taxes and the price of real estate in Vancouver?  That's the only thing you'll be able to afford

If you earn the median salary in Hong Kong, you need 20 years of not spending anything, not even on food and rent, to save up a downpayment.  That's assuming that housing prices do not go up anymore. 

What I am trying to say is, Vancouver real estate is cheap 

[Malthus]

From a shopper's perspective, it was definitely supply chain issues that destroyed them. It was like the old saying, 'you never get a second chance to make a first impression'. People were very excited to try the new Target stores - but when they went, they found shelves often bare of merchandise, and what was there was not organized in any coherent manner; they mostly went "well, this sucks" and did not come back.