Target generated buzz with fashion but felled by pricing, niche
Models walk the runway during the Target show during World MasterCard Fashion Week in Toronto on Tuesday, October 21, 2014. Target generated big buzz with a pop-up shop with designer Jason Wu, splashy presentations at Toronto Fashion Week and collaborations with Canadian brands like Roots and Beaver Canoe. Yet it still wasn't enough to draw consumers and sales in droves. THE CANADIAN PRESS/Michelle Siu
Lauren La Rose, The Canadian Press
Published Thursday, January 15, 2015 3:26PM PST
Last Updated Thursday, January 15, 2015 3:32PM PST
TORONTO -- Target generated big buzz north of the border with a Jason Wu pop-up shop, splashy presentations at Toronto's World MasterCard Fashion Week and collaborations with homegrown brands such as Roots and Beaver Canoe.
The designer partnerships and limited-edition fashion lines were a big selling point for the discount retailer, but they couldn't draw enough foot traffic and sales to help keep Target afloat in Canada.
The Minneapolis-based retail giant announced Thursday that it would be closing up shop across the border, a move that will impact 133 stores.
"I don't think that their merchandising followed through with what they had promised," said Wendy Evans, head of Toronto retail consultancy firm Evans and Company Consultants Inc.
"You go into the store, you don't see the presence of those interesting brands up front: you see a sea of unstocked shelves and fairly drab merchandise."
Michael Mulvey of the University of Ottawa said generating interest through high-profile events was core to Target's mission and positioning strategy but any buzz became "overwhelmed with discussion about price."
"The chatter I saw in the media, a lot of it had to do with how their prices weren't the same as they were in the U.S., and also how their prices weren't as deeply discounted as you'd find at Wal-Mart," said Mulvey, assistant professor of marketing in the Telfer School of Management.
"I think a lot of people started thinking more about price than all of the other wonderful virtues that are Target's strengths in the U.S."
Mulvey used to live in the U.S. where he said Target never pretended to be price-comparable with its biggest competitor.
"The idea was if you wanted to buy a garbage can for your office, you could go to Wal-Mart, you could go to Target. But the one at Target's going to be nicer-looking and it might cost you a buck and a half more," he said.
"They were very clear about what they stood for in the States, and I think part of the problem they had in Canada was it wasn't as clear. I think a lot of Canadians had the expectation that it was all about the price and a lot of the virtues like the merchandise selection and the unique qualities about the designer clothes weren't as foreground here."
Brynn Winegard, a marketing expert with Winegard & Company, said while there was a select group of consumers who appreciated Target's fashion partnerships -- which also featured limited-edition lines with Canadian designers Melissa Nepton and Sarah Stevenson -- it didn't translate to the wider mass market.
"I'm closely allied to the fashion department at (Toronto's Ryerson University) and we heard a lot about Target through our students and through other people. But that was a very niche audience that isn't enough, frankly, for a generalistic department store to survive," said Winegard.
In addition to criticism of higher prices in Canadian stores, Winegard said operational and supply chain management challenges also hurt the retailer.
"If they really wanted to establish in Canadians' minds: 'Hey, we're a one-stop shop,' they had to have had a full complement of product on shelves," she said.
"In actual fact, most people walked out and said: 'I didn't find anything I was looking for, nothing was in stock. There are whole sections with nothing on shelves."'
Blogger Lena Almeida said she loved shopping at Target in the U.S. for the designer collaborations and the ability to obtain items she couldn't in Canada -- namely, stylish pieces at affordable prices. But her shopping habits didn't change when Target opened closer to home.
"I don't think it was the fault of them not having amazing collaborations, but I do think that when I went to Target, I went for those specific fashion one-offs (only), and I have a lot of friends in the same age demographic, household income range that were doing the same thing," said Almeida, who blogs at www.listentolena.com.
The Mississauga, Ont., mom of two said pricing was a big reason she didn't buy other items at Target.
"I think that every Canadian mom knows her prices and knows where to get the best deals. We have our favourite places to go, and unfortunately, other than a few deals on toys when they had clearance specials, I didn't see a huge motivating factor for me to make Target my go-to store."