The Last Days of Target Canada

Case Study: The Last Days Of Target Canada

Sometimes even the most successful retail markets can commit blunders. Here’s a case of Target the made a huge mistake that costed them billions of dollars. Let’s see how and what lead to this.

Target is the second largest discount retailer in the US after Walmart. Founded in 1902 target now operates in 1801 locations. The success and presence of target in US had created a lot of curiosity among Canadian and this thought gave target an ambition to reciprocate its victory in Canadian markets. This started in 2011 when target signed a contract with Zellar to lease the stores in Canada.

Target under the guidance of Tony Fisher was set to make its huge launch in 2013. Just before a few months of the launch situations began to grow out of the way. Problems were seen and felt by all but everyone was too afraid to say it. The project seemed to be over ambitious and having a very thin margin of error. A series of problem that crept after launch and the problems never began to end. This lead to a bankrupt Target closing its Canada chapter.

The situations that lead to Targets Bankruptcy are:

1. Target aimed at opening 124 stores in a span of two years. This was a lot lesser time deployed in comparison to the magnificence of the project they tried to achieve.  
2. Lack of pre assessment: Target did not spent enough time to pre-assess the market. They did not review the response that the market had to offer. Instead they went on to launch multiple number of stores in order to achieve their goal.
3. The technology deployed for managing the distribution, POS and customer relationships was totally new to the employees. They were not properly trained to use the new platform that was provided to them. As such the tool to manage became the very reason for their failure. Inventory was not updated, glitches were not resolved etc.
4. Zellar deal was a huge mistake. They invested a lot of money by leasing 124 stores from Zellar without assessing wat the market had to offer.
5. Lack of distribution channel: there was a lack of strong distribution channel to feed the requirements of 124 stores. As a result the customers had to see empty shelves and leave with disappointment. This was a major cause of the failure of Target.
6. No proper measures were taken to solve the problems. Instead more and more resources were deployed in the project. This resulted in issues being unresolved.

Their biggest issue was ignoring the technological drawbacks, which destroyed their whole distribution channel. Challenging to execute SAP system in just two years was an underestimation in time context, as there were so many examples like Loblaws was present which took five to seven years to make the system operational. POS system serviced by Retalix was not working properly. System was full of bugs and was unable to process transactions well. Warehouse software and SAP were also not communicating well. Due to different field specifications there was lot of undesirable ambiguities in the overall communication. In result of this distribution centre was full of materials, whereas store shelf was lying empty. Unexpected data ambiguity created havoc in distribution centre.