Blogs & Comment

Can Target live up to the retail hype?

Finally, it's here.



You may have heard that a certain American retail giant is hanging its shingle north of the border. Two years after Target initially got the buzz ball rolling with word of its Canadian expansion, the day has finally arrived. On Mar. 5, the first three Target stores in Canada will open their doors to consumers in Guelph, Milton and Fergus, ON. These locations will act as pilot stores ahead of the remaining 121 Canadian outlets set to open throughout the month of March.

So what can Canadians expect from the brand with the tagline, “Expect more, pay less?” Essentially, this is a retailer that will challenge competitors in a number of categories, from grocery to home wares to fashion. Target Canada president Tony Fisher said that variety plays to his company’s strengths. “What surprised me [about the Canadian retail landscape] is that there are a lot of great brands here but you have to make multiple stops to get what you need.”

No surprise then, when Barclay’s released a report naming brands like Canadian Tire, Old Navy and Walmart among the retailers who will be impacted most from Target’s arrival in Canada. One stroll around the Guelph pilot store and its clear where Target is aiming to differentiate itself in the marketplace. The sight lines allow you to see around each section clearly and shelving is specially designed to highlight the products prominently. In the beauty section, for example, the shelves are backlit to really draw in consumer attention.

Clean, wide aisles and attractive merchandising, combined with a bit of a more upscale feel than a typical grocery store or Walmart will appeal to many consumers. The grocery section isn’t huge but is easy to navigate and extensive enough for those looking to pick up a few things while browsing other non-food items like home wares, clothes or electronics.

Speaking of electronics, every Canadian Target will feature an Apple shop section, compared to only about 56 of its more than 1,700 U.S. locations.

One of the brand’s key selling points is its fashion, which has long been lauded for being affordable yet acceptable among consumers who wouldn’t be



caught dead buying clothes at Walmart. With exclusive and limited edition lines with brands like Roots and celebrity stylist Kate Young, as well as snowboarder Shaun White, Target will be taking aim at the likes of Joe Fresh, Old Navy and H&M.

It’s got 825,000 Facebook Likes, the most among any Canadian retailer, and it hasn’t even opened a store yet.

Can Target possibly live up to its two years worth of hype?  Here are five ways the brand can succeed after that new store smell wears off.

Keep it exclusive: It’s tough to say how much of all the hype and anticipation is simply because its something shiny and new moving into the neighbourhood. Once the store is an established presence in Canada, it will have to continue to tap into its impressive marketing playbook and continue to roll out the exclusive limited edition partnerships with brands and designers like Roots, Umbra and Young.

The lowest price is still the law: Zellers may now be in that Great Retail Store in the Sky, but its maxim still holds true. In order to consistently compete with established Canadian market players, Target will have to deliver both on its signature style but also on price. The company does have price matching policy for competitor flyers and has held its own against Walmart in the US for years, so there’s no reason to think it can’t do the same here.

Never rest: When the company first announced its move north, it says it had about 70% brand awareness in Canada. Now it’s hovering around 90%. This kind of hype will get plenty of people thorough the door but the company can’t rest on its popular laurels. The competition will be aggressively countering any price and product moves but one of the biggest pitfalls for successful American chains of any sort coming to Canada is treating this country as simply an extension of the U.S. Target needs to remain aware to the nuanced differences between the markets, then cater and celebrate it. It’s off to a great start with projects like the Toronto Fashion Incubator contest and partnership that gives an up and coming Canadian designer a chance to get a line sold in the stores.

May I help you? Another potential differentiator for Target is its customer service. Each store will have about 150-200 employees, about double what Zellers had. It also especially designed the checkouts for its Canadian stores to have cashiers always facing customers directly, as opposed to turning to the side. It’s an experimental design that Fisher says could be adopted in the U.S. if all goes well up here.

Keep hitting the brand bullseye: Target has built a strong reputation on its ability to really connect with its consumers in a way that results in a kind of loyalty not usually associated with a place you can buy your toilet paper. Between things like the Toronto pop-up shop and the new TV ad, it’s pushing hard to convert Canadians into a new nation of “Tar-jay” loyalists.