“Your customers are responsible for your company’s reason for existing.” – Marilyn Suttle
After billions of losses in the Canadian market, Target asks itself today: what went wrong?
According to the OECD Index people in the United States earn around $54, 214 US dollars
annually. Comparing this number to their Canadian counterparts, the average Canadian earns approximately $44, 017 US dollars per year.
The average disposable income in the U.S. is $39, 531 US dollars, versus $30, 212 US dollars in Canada.
So, what do these numbers tell us?
Americans and Canadians do not have the same spending habits.
Target Corporation initiated the transaction of expanding into Canada after the recognition that most Canadians do cross-border shopping, and in most cases, will make a stop at Target. So, why did the allure end so suddenly?
The failed expansion of Target Canada rests in the difference of cultural nuances between Americans and Canadians.
As a corporate communication consultant, our first point of reference in garnering consumer support is to actually understand who our audience is, and how they buy. Target Canada is an example where expansion happened so rapidly without truly stopping to think about consumer differences. After all, most of us will assume there isn’t a huge variation between borders – but that’s where we’re wrong.
There were subtle signs of an attempt to make Target Canada much like their U.S. chain,
including ramping up their Black Friday Deals – a usual draw for Canadian consumers. However, spending habits on Black Friday for the average Canadian is far from their American friends. Most Canadian shoppers are more than likely waiting for Boxing Day Deals, a larger draw for Canadians over Black Friday. Plus, the average Black Friday shopper is more than likely headed across the border to capitalize on better deals and a wider selection.
For a Canadian living in the United States, I see a drastic difference between Target U.S. and
Target Canada. Target Canada is met by higher pricing and minimal selection. The draw between the two stores were extremely different. The expansion of Target into Canada failed to account for a variation in transportation costs and supply demand differences. All relevant to the Canadian consumer.
Furthermore, the slogan “One-Stop-Shop” doesn’t resonate with the Canadian customer. The Canadian consumer tends to shop sporadically, searching for deals across a number of different stores. Where “One-Stop-Shop” resonated with Americans due to ease of use and logistics, the same shopping mannerisms don’t translate synonymously between the two countries.
The learning curve for Target Corporation here, and any corporation looking to expand either North or South of the border, is to remember who is buying the product. It’s not enough to
assume cultural similarities or spending habits. It’s extremely crucial to recognize the subtle variations in how people buy, and the difference in purchase decisions when targeting (pardon the pun) a new audience.
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