Sunday, March 31, 2013

On Target?

There is a very interesting (at least if you're me) interview with the head of Target Canada in the most recent issue of Report on Business Magazine.

CEOs are politicians: their party is their corporation. As such, they are verbally slippery. It is very difficult to get yes or no answers out of them. The interviewer here tries several times to get Tony Fisher to commit to saying whether Target Canada prices will be similar to those at Target in the U.S. After some hemming and hawing about being "competitive within the Canadian marketplace", we finally get the truth: no.

And they can't be. As much as I rail against the ridiculous price discrepancies between Canada and American given that our dollars are roughly at par, and as much as I dismiss the stupid 'economies of scale' argument (come on, most of Canada's population is a hop skip and jump from the U.S. border), the fact is I'd rather pay more and know that the employees are getting something marginally closer to a living wage.  (The minimum wage in Ontario is $3/hr higher than the U.S. federal minimum wage).

But the thing in this interview that I most fixated on was the key difference Fisher noted between American and Canadian retail culture:

"What was one of the biggest surprises for you when you moved here in August, 2011?" "I wanted to be a consumer here, so I could say exactly what it is like to shop at Loblaws or Sobeys or Metro or Fortinos on the grocery side, what it’s like to go to Canadian Tire or Home Depot, or to shop at Walmart or Shoppers Drug Mart. One of the biggest surprises early on was just how many different places I had to go to get what I wanted. There was a lack of one-stop shopping. Now, Walmart exists, but it’s the consumers’ mentality. It was just kind of part of the norm."

There's no "kind of" about it. I can certainly understand, from a retailing perspective, why Fisher might find this mentality baffling and of course he'd want to change it. All I can say is good luck with that.

Caveat lector: I have not been a Target 'guest' in Canada yet. However, I've heard from many that have been...the hype has been close to insane. This is to be expected in a country with such a pronounced inferiority complex as Canada. Oh, my God, an American store has come to Canada, I simply MUST shop there!
And most of the reaction I've heard has boiled down to meh. Wal-Mart with wider aisles. And empty shelves.
This isn't a surprise. For all we've heard about American just-in-time inventory know how, the truth is that Canadian companies are much better at that than most of their American counterparts. I tell you this: if my store had as many shelves empty on opening day as I've heard the ones in Guelph and Fergus did...opening day would be postponed and heads would roll.

Give me American selection, is all I'd ask. If I want Vanilla Coke, or Minute Maid Pomegranate Lemonade, I should be able to buy it. That said...

I have a deep, deep distrust of any place that sells food and. Take Wal-Mart. Their general merchandise is almost without exception low-quality, low-durability, low-cost, with emphasis of course on the cost. They claim to have a customer service culture. They don't. Just try to find an employee when you need one.
Let's say I want to buy a television. If price is my sole concern, I might look to get it at Wal-Mart: they usually have a few TVs at an intriguing price point. But I'd better have done my research first, because any employee I consult is unlikely to know all that much about televisions. The same holds true for most of what Wal-Mart sells.

What's more, their grocery selection, even in the Supercentres, is pitiful...and compared to the discount grocery banners like No Frills, FreshCo and Food Basics, the prices really aren't anything to get excited about either.
In short, trying to do everything means you do a half-assed job. Pretty much by definition. Target's welcome to that retail model, and I've heard their quality is a step above Wal-Mart's...but  you'll pardon me if I doubt their employee training is comprehensive on the whole of their inventory.  I mean, they do pay their employees minimum wage.

Fisher moves on to discuss Target's extensive customer profiling, and this is where I do believe the company has an edge...even though many people I have spoken to find targeted ads and promotions spooky for some reason.  Let me put it to you this way. You're going to see ads...the world practically runs on them. Would you rather see ads that might have some relevance to you, or those that really, really don't? My eye and ear edits out ads almost automatically, precisely because I ain't buyin' what they're sellin'.
If the reason you're spooked is because you don't like soulless corporations knowing everything there is to know about're reading this on the Internet, aren't you? You're way too late. For that matter, better close out your account at the bank and turn in your credit cards.

I'm in no hurry to shop at Target. It's not out of Canadian patriotism--even if Target bombs, it won't bomb near as badly as Zellers--it's more out of that distrust of generalists that seems to be a uniquely Canadian consumer trait.


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