Why Target Missed

[Cache #185]

By Andris Pone
President, Coin Branding

The Target debacle has been so spectacular, it has endowed the following maxim with new meaning:

“The only thing harder than building a brand is changing one.”

In the context of Target, one would expect that these words, listed among Ted’s Maxims at the end of Brand: It Ain’t the Logo, mean that a bad first impression – a stumble out of the gate – is something from which you may never recover.  Or to invoke another adage:  you only get one chance to make a first impression.

On the surface, this seems to be the essence of Target’s Canadian story (which is now, with 18,000 people out of work, a tragedy):  from the moment they opened, consumers thought the prices were too high and the shelves were too empty.  That was the brand that Target established in Canada, and they found out that to change it would be to climb a mountain of losses too high.

But look deeper, and an unexpected new meaning to the maxim emerges:  that once you have established your brand as a very strong and clear one, attempt to change that position at your peril.  Target U.S. had created in Canadian minds such an amazingly clear position – low prices and super-wide, cheap-chic selection – that they should have known their pricing in particular would create deafening dissonance in this market.

Yes, doing business in Canada is more expensive.  Canadian shoppers, unfairly to be sure, did not care.  They expected an American Target experience and they did not get it.

Is it impossible, then, for big American retailers, those with widespread brand awareness north of the border, to successfully transplant their operations in foreign soil?  Walmart did it 20 years ago, and compared to Target, their offering is at least as tied to low prices.  Nordstrom is the highest-profile U.S retailer about to attempt it, and in contrast to Walmart and Target, their brand is all about superlative service – and the lower vulnerability to margins that presumably comes with it.

If Nordstrom suppresses any Yankee hubris, and hires a whack of very senior Canadian retail executives, and then listens to them – and if their Canadian customers do not die of heart attacks upon being greeted by someone who cares in this cold service culture – they should do fine.


New comment in Globe and Mail:  Standing out from the business school crowd
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Book:  Buy the #1 Globe and Mail bestselling Brand: It Ain’t the Logo or download a free chapter

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