#NMSAInsight – What Target’s Failure in Canada Says about Canadian Culture

#NMSAInsight – What Target’s Failure in Canada Says about Canadian Culture
February 18, 2015 nmsayorku

It’s no secret to anyone even remotely tied to business that Target has lost in Canada. About a month ago, the Minnesota-based retailer announced that it would be closing all 133 of its stores across Canada- only two years after its debut in the country.

Target’s exit will not be pretty, as more than 17,000 people will lose their jobs. Advertising and PR firms that depended on Target’s business have already begun cutting their staff. International festivals such as Toronto Fashion Week will be one of many to lose Target Canada as a sponsor. After seeking bankruptcy protection for the $5 billion it owes to various creditors, Target will also be leaving some Canadian suppliers out of pocket, including Roots.

Target sealed its demise when it did not use a targeted approach in Canada; one size definitely doesn’t fit all. This is the single, most important fundamental rule concerning international marketing. Canadians have different cultural subtleties than their American counterparts. Here are a few:

1. We don’t shop for sport.

Canadians don’t view shopping as a leisurely activity. In general, we don’t seem to find it entertaining in the same way Americans do when they wander through a mall looking for something to buy or to make a purchase. One reason why we don’t enjoy parting with money is that most of us do not have as much disposable income as Americans. Unlike our neighbours to the south, we can’t deduct our mortgage interest payments from our bills to Revenue Canada. The cost of living is also higher, from the cost of a mortgage (or rent) in Canada to going out to dine.

2. When we do spend, it better be worth it.

Only a handful of Canadians prefer shopping online from the comfort of their own home but we are primarily ‘touch and feel’ shoppers. Target prices were already higher than those at Walmart due to taxes and exchange rates. But no one wants to pay more for a pack of underwear for example, which they can easily purchase for a lower price from another store or retailer. When we as Canadians shop for premium items, we have a more sophisticated sense of style than American shoppers. We will pay more for brand names that we believe deliver better quality. That is why premium high street brands such as Williams-Sonoma, Pottery Barn and JCrew took baby steps in their expansion into Canada and achieved success.

3. We are extremely distrustful of hype.

Another fundamental marketing rule that Target violated is to under-promise and over-deliver. There is nothing that annoys us Canadians more than anyone blowing their own horn, proclaiming their own greatness, whether deserved or not. Nothing bonds us together as closely as a nation than our utter dislike for anything that turns out to be average or mediocre.

 

As seen in The Toronto Star