Another contributing factor to the issue of low foot traffic was Target Canada’s poor physical store placement and image due to its buyout of Zellers leases. As executives soon learned, quick increases in market share are not always worth business model compromises. Overall, Zellers locations were more city-oriented than American Target locations, which led to less access for the retail chains primary target market segment: the middle class. Instead of driving out of their way to shop at Target, many middle-class Canadian consumers opted to continue frequenting their usual preferred retail outlets, an outcome Target Canada bet would not materialize. In addition, the Zeller’s stores not only had smaller store footprints with less shelf space
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Undaunted by the already-difficult task of getting a nation-wide distribution network up and running, the retail giant decided to also implement a new inventory tracking system not even fully rolled out in their American locations at the time (CITATION). The system, called SAP, was supposed to make the entire network more seamless and efficient, with the ultimate goal of implementing it throughout Target’s North American operations. Unfortunately, Target failed in acquiring personnel with any real knowledge of how to implement the system. According to Canadian Businessweek, other retailers, such as Canada-based Loblaws, had previously attempted to implement the system, which proved to be cumbersome and onerous to switch to. While Target attempted to combat this by hiring an outside consulting firm to assist in the process, they failed to train employees to a functional extent (CITATION). The new system and lack of employee knowledge related to it contributed to low stock and empty shelves, compounding the existing issues of a lack of sufficient distribution network and miscommunications with …show more content…
No one would argue that this move failed to provide the retail chain a nearly-immediate foothold in the Canadian marketplace, but the move ended up being entirely too rapid for Target to handle. As discussed earlier, the physical locations of many branches were also less-than-ideal and strayed from Target’s United States business model. Instead of such an impatient tactic, Target Canada would have been well-served to mirror the efforts of chains such as Costco and Nordstrom, who both adopted a far more methodical approach in order to build sufficient supply chain infrastructure and work out operational kinks before investing excessive capital. While Wal-Mart also bought out leases when it entered Canada decades earlier, it too adopted a more methodical overall growth rate than Target did. In fact, Wal-Mart waited over ten years until the company opened its first SuperCenter in Canada, giving it time to “study the market” and make accurate predictions (CITATION). At the very least, Target Canada should have planned on buying out fewer leases from Zellers right away. However, an even slower approach would have been ideal, as starting with only a few select locations would have allowed Target to establish themselves in the market on a smaller scale while building an effective supply chain behind the scenes to support future
Undaunted by the already-difficult task of getting a nation-wide distribution network up and running, the retail giant decided to also implement a new inventory tracking system not even fully rolled out in their American locations at the time (CITATION). The system, called SAP, was supposed to make the entire network more seamless and efficient, with the ultimate goal of implementing it throughout Target’s North American operations. Unfortunately, Target failed in acquiring personnel with any real knowledge of how to implement the system. According to Canadian Businessweek, other retailers, such as Canada-based Loblaws, had previously attempted to implement the system, which proved to be cumbersome and onerous to switch to. While Target attempted to combat this by hiring an outside consulting firm to assist in the process, they failed to train employees to a functional extent (CITATION). The new system and lack of employee knowledge related to it contributed to low stock and empty shelves, compounding the existing issues of a lack of sufficient distribution network and miscommunications with …show more content…
No one would argue that this move failed to provide the retail chain a nearly-immediate foothold in the Canadian marketplace, but the move ended up being entirely too rapid for Target to handle. As discussed earlier, the physical locations of many branches were also less-than-ideal and strayed from Target’s United States business model. Instead of such an impatient tactic, Target Canada would have been well-served to mirror the efforts of chains such as Costco and Nordstrom, who both adopted a far more methodical approach in order to build sufficient supply chain infrastructure and work out operational kinks before investing excessive capital. While Wal-Mart also bought out leases when it entered Canada decades earlier, it too adopted a more methodical overall growth rate than Target did. In fact, Wal-Mart waited over ten years until the company opened its first SuperCenter in Canada, giving it time to “study the market” and make accurate predictions (CITATION). At the very least, Target Canada should have planned on buying out fewer leases from Zellers right away. However, an even slower approach would have been ideal, as starting with only a few select locations would have allowed Target to establish themselves in the market on a smaller scale while building an effective supply chain behind the scenes to support future