Target Faces Unique Challenges in Quebec

Photo: Target

Photo: Target

By Eric Blais

Like many U.S. retailers entering the Canadian market, Target expected that its reputation would precede it. It created hype and high expectations promising Canadians that they would not be offered a Target Lite version of what they’d experienced south of the border.

Creating expectations.

Much of Target’s strategy leading up to its first store opening was therefore predicated on a majority of Canadians being already favourably predisposed to the retailer and eager to finally experience “Tarjay” closer to home.

“No one was more excited about Target entering Canada than the Canadians themselves” according to retail advisor Anthony Karabus quoted in a Fortune article last March

Canadians were giddy but what about French Canadians living in Québec?

Findings from a survey of 1,000 Canadian women by Headspace Marketing indicate that Quebeckers were significantly less familiar with Target than Canadians in the rest of Canada when it launched last year. Today, only a quarter (23.7%) of Quebec women have ever shopped at a Target store in the U.S. compared to more than half (54.4%) in the rest of Canada (and as high as 77% in Manitoba and 62% in B.C.).

This might be good news for Target in Québec as the bar was likely not set as high. While Canadians in the ROC were expecting the bright clean stores, wide aisles, trend-right merchandise, great guest service, short checkout lines and unbeatable prices they experienced in the U.S., three in four Quebeckers had never experienced this while shopping in the U.S.. Instead of a Target Lite, Quebeckers may have simply discovered a better Zellers where the lowest price is not always the law on some items.

Adapting Target’s store opening strategy for Québec.

While the Target brand did not have the same level of awareness and familiarity in Québec as it did in the ROC, the retailer opened  its stores in the province by adopting essentially the same formula (translated in French of course) for its launch. It took some steps to speak more directly to Quebeckers through events featuring local celebrity Mitsou posing next to Bullseye - Target’s bull terrier mascot. It leveraged associations with local designers and taste makers like Sakia Thuot. And the retailer ensured it complied with Quebec’s French language laws across its operations.

Failure to exceed expectations.

First impressions are everything. And when you’ve so publicly raised the bar, you better not just meet expectations. You need to delight the folks you’re calling your “guests”. It’s worth noting that Target has had to call its guests “clients” in Québec where the French equivalent - invités - would have been a bit too personal. Our survey reveals that nine in ten Canadian women were guests at a Target store at least once in the past year. This is consistent across the country. 

We asked these women shoppers to rate their overall experience. Despite all the negative publicity about Target’s failed launch in Canada and the public apologies, six in ten Canadian women (61.7%) rate their experience as either good or very good and only 7.3% rate it as bad or very bad. Still, Target appears to have only managed to delight one in five shoppers with 21% rating the experience as very good.

Quebeckers are unsure about Target.

They are less likely than Canadian women in the ROC to rate their experience at Target favourably. 52.1% of Quebec women rate it as good or very good compared to 64.7% in the ROC. Almost one in ten Quebec women rate their experienced as bad or very bad. What is most revealing however is how many Target female shoppers in Québec rate their experience as neither good nor bad. 38.4% in Quebec compared to 28.7% in the ROC. 

With fewer Quebeckers already familiar with the Target experience in the U.S. and a launch strategy that in many ways relied on its reputation preceding it, many Quebeckers may not know what to make of Target at this point. This is both an issue and an opportunity for Target. It’s an issue because if you don’t define your brand, someone else will do it for you. Target needs to be crystal clear about what it stands for and how it’s different from other shopping destinations in Québec. The experience is either neutral or bad for one in two Quebeckers who have shopped at Target. It’s also an opportunity. Quebeckers are more likely to be neutral about a brand they knew less about before it opened its doors, promised much and wasn’t able to deliver fully on its promise. The data suggest that Quebeckers are giving Target the benefit of the doubt despite rating their experience so far not as favourably as Canadians in the ROC.

Giving Target another chance.

We asked Canadian women if they were planning to shop at Target this fall given the retailer’s public pledge to fix its inventory problems and offer more competitive prices. Canadians must be forgiving. 73.7% said they would likely or very likely do so. 67.2% of Quebec women said they would, slightly below the ROC at 75.8%. But the retailer has its work cut out in Quebec where one-third (32.8%) say they are unlikely or very unlikely to shop at Target this fall compared to 24.2% in the ROC.

Creatures of habits

When Target announced its plans for Canada, it boldly declared its objective to change the way Canadians shop. Tony Fisher explained how he was surprised by the “lack of one-stop shopping” in Canada. Target’s strategy was therefore predicated on changing habits and consumers’ mentality. Despite all the talk about adapting to Canadians’ needs, this signalled an intent to “teach” Canadians how to shop at Target for all their needs. Easier said than done. And it’s an even greater challenge in Québec where consumers are generally more brand loyal and set in their ways. Borrowing from President’s Choice slogan, it takes a lot in Québec for a retailer to offer something “worth switching supermarkets for”.

A narrower focus

The one-stop shopping strategy now appears to have been set aside as Target attempts to get back on track. Its new CEO is intent on re-energizing what he calls signature categories such as “design and style”; the fashion, furniture and other products that once gave Target its edge. What’s been described as a focus on the areas guests most commonly associate with the Target experience should help bring greater clarity to the brand and give it cachet.

Our survey asked Canadian women in which department they would likely shop at Target. Clothing and accessories lead with 61.8% saying they would shop in that department. Home decor and everyday items follow with 48.6% and 49.9% respectively. Grocery and beauty get 44.0% and 31.5% respectively. Only 20.4% say they would shop for electronics at Target but that number would likely be higher if men had been surveyed as well. Quebec stands out from the rest of Canada on this front as well. Quebeckers are less likely to consider Target as a destination for clothing and accessories, home decor, groceries and everyday items. The new CEO’s strategy focused on signature categories also makes sense in Québec but converting Quebeckers into loyal Target guests won’t happen overnight. Jean Coutu already caters to their health and beauty care needs. Metro and IGA have stepped up their game to appeal to their inner foodie. And Walmart has built a strong position in a market in which it initially struggled.

Canadians in the ROC were told to “expected more and pay less”. Quebeckers were told something slightly different. They were promised “better” since Target’s slogan in Québec translates into “Find Better. Pay Less.” (Trouvez Mieux. Payez Moins.) Target still has a chance to offer Quebeckers something better but it needs to do much more than what it has done so far to become TarJay to Quebeckers.

Eric Blais is President of Headspace Marketing - a Toronto-based marketing-communications consultancy helping clients build their brands in Québec.

*****The survey was conducted online among 1,000 Canadian women adults residing in the FSA’s of Target stores across Canada between September 8th and 12th, 2014 using ResearchNow’s online panel. Regional quotas were set according to the regional distribution of Canada’s population.*****

Today's Retail News From Around The Web: September 23, 2014