“This happened very late in the game.”, There was yet another basic error Target Canada didn’t discover until 2014. Target was going to do it in less than two years—and it planned to construct three of them. These are companies based in the USA which basically give you an address, just so that you can send your purchases there. (Another former employee disputes this: “Sometimes the quality of their work wasn’t so great, but for the most part they did a good job.”) In any event, uploading took longer than expected, and data week stretched into two. According to someone with knowledge of the forecasting process in Minneapolis, the company treated Canadian locations the same way they did operational stores in the U.S. and not as newcomers that would have to draw competitors away from rival retailers. But the shipment might actually be configured differently—four larger boxes of 250 toothbrushes, for example. The price Steinhafel paid raised eyebrows. “These were people I’d hired. In 2014, a Retalix team flew to Toronto to see first-hand what Target was dealing with. They truly do take the hassle and worry out of the process of international shipping. Merchandise that made it to a distribution centre couldn’t be processed for shipping to a store. By the time Target opened its first stores in March 2013, retail e-commerce sales in Canada were approximately $18.9B CAD, indicating a vast potential online market. One of these leaders recalls moving through a fog and hyperventilating while struggling to remember how to dial in to a conference call. “He absolutely took the fall for Target Canada.” The reality is the odds were stacked against him from the start, given the extremely tight timeline and the thin margin for error. The corporation’s entry into Canada was uncharacteristically bold—not just for Target, but for any retailer. So that was horrible,” says the former employee. The Canadian team lacked the institutional knowledge and time to properly mentor the new hires. “He gave every last ounce of himself. The team responsible for the decision went with a system known as SAP, made by the German enterprise software company of the same name. Sometimes a transaction would appear to complete, and the customer would leave the store—but the payment never actually went through. There was another element at play, too. There could be dozens of fields for a single product. “Target’s motto was they could train you for the job, but they couldn’t train culture,” says a former employee. There were more worrying signs in January. It can save you time and money in the long run! “We had so much faith we could solve any problem. The rush to launch meant merchandisers were under pressure to enter information for roughly 75,000 different products into SAP according to a rigid implementation schedule. Target’s arrival was highly anticipated by consumers and feared by rival retailers. Cornell cast a skeptical eye on the Canadian operations. It was considered a privilege to be recruited. Discussion about marketing and when it was appropriate to invite the consumer back into the stores after making a terrible first impression intensified. There was no reason to think Target wouldn’t be able to pull this off. (604) … Three test stores were slated to open at the beginning of March, followed shortly by another 21. The company had been teasing consumers for a year at this point, starting with a pop-up shop in Toronto featuring designer Jason Wu. 151. But it didn’t stand a chance if it couldn’t offer the basics that bring people back to stores. Yet, Target chose to focus its expansion on growing its physical stores, not e-commerce, at a time when Canadians had long adopted smartphones, social … January 8, 2015. One of the most pronounced examples of the role of the Supply Chain in serving and protecting your brand is found in the story of Target Canada. After running through the prepared script he was given, he broke down, crying. He was open about telling employees that he’d never managed through such a challenging situation before. “From the very beginning, there was a clock that was ticking,” says the former employee. (Auto-replenishment wasn’t switched back on until later that year. (Baker, through a spokesperson, declined to comment.). “Not only have we brought that same Target brand experience,” he said, referring to the U.S., “but we’ve actually enhanced it and made it better.” Fisher sported a head of thick dark hair and could flash a camera-ready smile when he needed to. But by flipping the auto-replenishment switch off, the system wouldn’t report an item as out of stock, so the analyst’s numbers would look good on paper. Why Target Canada collapsed has been endlessly dissected by analysts, pundits and journalists. Thus, “data week” was held in the fall of 2012. Shock permeated the building. The parent company installed a new CEO to replace Gregg Steinhafel in 2014. They had overcome seemingly endless hurdles and worked gruelling hours to get to this point, and they knew there were costs to delaying. He prioritized what he called “mom’s shopping list,” which consisted of basic household items such as toilet paper, toothpaste and detergent. Manhattan, the company’s warehouse software, and SAP weren’t communicating properly. Warehouse workers got so desperate to move shipments they would sometimes slice open a crate that was supposed to contain, say, a dozen boxes of paper towels but only had 10, stuff in two more boxes, tape it shut and send it to a store that way. (Accenture, which Target hired as a consultant on SAP, said in a statement: “Accenture completed a successful SAP implementation for Target in Canada. Even if the stores were in out-of-the-way spots—and some of the locations in the Zellers portfolio certainly were—the company assumed the strength of the Target brand would lure customers. Walmart would eventually back out, but Target put down $1.8 billion. Location, location, location. The auto-replenishment system, which keeps track of what a store has in stock, wasn’t functioning properly, either. Consumers soured on the brand when confronted with empty shelves—the exact scenario some senior employees warned of earlier in the year. The employees were weary and frustrated by this point. Despite his stubborn optimism, those meetings had grown more tense too. When Schindele learned of it, according to a former employee, he remarked, “I can’t believe it’s as bad as it actually is.”. Rancho Cucamonga store details. Everyone else in attendance expressed confidence in sticking to the schedule, and by the time the meeting concluded, it was clear the doors would open as promised. Target truly underrated the influence of Canadian unions. Strange things started happening in 2012, once ordering began for the pending launch. Product dimensions would be in inches, not centimetres or entered in the wrong order: width by height by length, instead of, say, length by width by height. Other items weren’t able to fit properly onto store shelves. “I was just so exhausted all the time,” says yet another former employee. It was a disaster.”, Retail stores of the future will entertain first, and sell later, How Indigo plans to become the world’s first “cultural department store”, “We have to assume sales will be good. Combined with the bleeding operations in Target Canada, Steinhafel’s position was untenable, and he stepped down in May. More than a few people say Fisher “bled Target red.” When he wasn’t talking to reporters about the pending launch, he could have a stern, imposing demeanour (a defence mechanism to compensate for his young age, perhaps), so much so that employees would warn prospective hires about to interview with him not to be put off. Some of the business analysts responsible for this function, however, were turning it off—purposely. "Target’s decision to exit Canada after less than two years of store operations is an admission that it has failed in its attempt to enter a new market," Moody's analyst Charlie O'Shea said. The 750 employees at the Mississauga head office had worked furiously for a year to get up and running, and nerves were beginning to fray. He noted that the shelves were stocked, but he was perturbed by the lack of actual customers, according to a report by Reuters. Time may have been another factor. Target Canada had ordered way more stock than it could actually sell. The retailer was still suffering from the fallout of the data breach months prior and accusations that it had lost its way in the U.S., where same-store sales were declining. The project was reviewed independently and such review concluded that there is no Accenture connection with the issues you refer to.”). Considered the gold standard in retail, SAP is used by many companies around the world, from Indigo in Canada to Denmark’s Dansk supermarket chain. For a single product, such as a blender, there might be fields for the manufacturer, the model, the UPC, the dimensions, the weight, how many can fit into a case for shipping and so on. “Sometimes even when we had the data correct, it got mixed up by the contractors in Target India,” says a former employee. Fisher, Target Canada’s president, was holding these meetings every day as the launch date crept closer. Fisher was not in favour of the idea, according to two former employees. Steinhafel bought everything, essentially committing the company to opening stores as quickly as possible to avoid paying rent on stores that weren’t operational and leaving landlords without anchor tenants. Have you ever wondered whether that’s possible? It was also a bonding experience—as terrible as it was. Target loves Canada," states its Canadianized website for shoppers. This isn’t always the case with every Freight Forwarder. Hiring was a top priority. ), The Mississauga head office, meanwhile, didn’t have a clear picture of how bad the situation was inside stores. Building a new distribution centre from scratch, for example, might take a few years. “For leaders who have experience with failure, that would be the last thing you do,” says a former employee. A new crop of senior leaders arrived from U.S. HQ with Schindele, replacing some of the exhausted execs who handled the launch. Target Canada would eventually learn what happens when inexperienced employees working under a tight timeline are expected to launch a retailer using technology that nobody—not even at the U.S. headquarters—really understood. The cash terminals took unusually long to boot up and sometimes froze. Within the chain’s replenishment system was a feature that notified the distribution centres to ship more product when a store runs out. Still, neither one outright advocated that the company push back its plans. That didn’t happen.” Others contend Fisher’s schedule didn’t allow him to be as visible. By early 2012, with the planned opening still a year away, the nerve centre for the Canadian launch had moved from Minneapolis to Mississauga, and waves of American expats settled up north. Insufficient stocking was Target Canada’s single biggest headache. “In our opinion, those issues include a badly functioning distribution system, chronic out-of-stocks, mispricing, weak promotional efforts, and a paucity of Canadian products, tactics or management,” CIBC analyst Perry Caicco said in a … The company that lost billions, suffered a humiliating defeat here and endured an ordeal that left its employees drained, exhausted and ultimately jobless, titled the website for Canuck shoppers “Target loves Canada.”. Target Corporation to Acquire Interest in Canadian Real Estate from Zellers Inc., a Subsidiary of Hudson’s Bay Company, for C$1.825 Billion; Target Names Tony Fisher President of Canadian Operations; Target Selects Initial Zellers Leases, Vast Majority to Become Target Stores I’m sure the question you have now is, “how can I get a physical U.S. address if I don’t live there?”. He had nothing left,” says a former employee. How to Deliver Items from the Target Online Store to Canada St. Joseph Communications uses cookies for personalization, to customize its online advertisements, and for other purposes. “We’d look on paper and think we’re OK. Then we’d go to the store, and it’s like, ‘Oh my god.’”, To add even more headaches, the point-of-sale system was malfunctioning. In 2011, Target bought the store leases of the now … Investors were pleased Target had finally broken free of the black hole of the Canadian operations and gave the stock a 2% bump that day. The implementation took two years longer than expected because of unreliable data in the system. Click Here to Sign Up for a FREE 30 Day Trial of MyUS. Here they are, mapped. The technology was not set up to deal with a foreign country, and it would have to be customized to take into account the Canadian dollar and even French-language characters. The news was rarely good. corporate. Order Pickup. Target describes itself as “fast, fun and friendly,” to work for and it’s a place where attitude and soft skills are of equal—if not more—importance to experience. In the three years since he was appointed CEO, he’d boosted revenue 8.3%—not a huge number, but an impressive one, considering the U.S. was experiencing the worst recession since the Great Depression. The answer is… no. In February 2013, about a dozen senior-level employees gathered at the company’s Mississauga, Ont., headquarters to offer updates on the state of their departments. What appeared to be isolated fires quickly became a raging inferno threatening to destroy the company’s supply chain. It essentially serves as a retailer’s brain, storing huge amounts of data related to every single product in stores. The venture failed because Target opened too many locations in a short period of time. 2685 Iris Street. Launching the Target brand in a new country was his biggest task to date. “We were bound to this one bad decision,” says a former employee. “We need to see improved financial performance from every Target store in Canada over time.”. The biggest difference between the two groups was attitude: The new team had energy. Target Group is creating an iconic brand portfolio, leveraging product diversification, innovation, … That meant store employees had to literally walk the floor and check each shelf—a laborious, error-laden process. On March 4, 2013, Tony Fisher led a gaggle of reporters through a new Target location in Guelph, Ont. The problem became immediately apparent when Target opened its first three test stores. According to one former employee, there was a misunderstanding about shipping dates. The reality was that Target was still struggling with data quality problems that were hampering the supply chain, and it didn’t have time to address the root causes before opening another wave of stores. Almost immediately, employees in Minneapolis were seconded to work on the Canadian launch. Fisher later resurfaced as a senior vice-president at a consumer health-care company also in Minneapolis. An astute deal maker, Baker and his team reached out to Target to stoke the company’s interest. “Everyone was trying to execute Gregg Steinhafel’s deal,” says a former employee, “and once one thing went wrong, it was an impossible achievement.”, It was Mark Schindele who took over as head of Target Canada. Fisher, 38 years old at the time, was regarded as a wunderkind who had quickly risen through the ranks at Target’s American command post in Minneapolis, from a lowly business analyst to leader of a team of 400 people across multiple divisions. I’d become friends with them. “When the numbers got up as high as they did, we found that pretty surprising,” says Mark Foote, the CEO of Zellers at the time. After touring a store, one of the Retalix executives remarked, “I don’t understand how you’re using this,” apparently baffled the retailer managed to keep going with so many bugs. Stores might end up with an abundance of some products and a dearth of others. “It wound up just being a constant elephant in the room.” There was also a sense of powerlessness. Hiring an external consultant would take too long, and it was impossible to expect the employees to do such a painstaking, arduous task and their regular jobs at the same time. Taking the microphone, Steinhafel, Target’s CEO, didn’t hesitate with his answer: He would renegotiate the real estate deal that facilitated the company coming to Canada in the first place. “I don’t remember being brought to tears,” he told Canadian Business but declined to elaborate. The team stressed there was simply no other way to get it done. (Others dispute this characterization and say the impact of the mix-up was limited.). “When I came home, I was no one. Postponement would mean pushing back even more store openings. The company wasn’t doing it alone, however, and hired Accenture (which also worked on Loblaws’ integration) as the lead consultant on the project. But it wasn’t its only. “That was the biggest mistake we could have made,” says the former employee. Canada. 10576 Foothill Blvd, Rancho Cucamonga, CA 91730-3890. Representatives for the bankruptcy monitor and the liquidators were in the building that day, and started meeting with employees, who were still trying to process the news, to discuss dismantling the operations. Tensions grew between Morioka and Bryan Berg, the senior vice-president of stores, and both leaders’ direct reports attempted to sort out issues among themselves rather than involving their respective bosses. What caused the Target Canada failure? But there’s a fairly straightforward workaround to get any item sold on the Target online store delivered to Canada. “Target in Guelph, please stock up and fill the shelves,” wrote one aggrieved shopper on Facebook. To further differentiate from other retailers, Schindele wanted to promote apparel and accessories, emphasizing Target’s “cheap chic” image, in direct contrast to Walmart. Even so, the company planned to reduce its emphasis on groceries. It took a toll on personal lives as well. In the 1990s, he started selling some of it off to various companies, including Walmart. The situation got so bad that Target scrambled to rent a handful of storage facilities to accommodate all of the inventory flooding in. Almost didn ’ t stand a chance if it couldn ’ t be processed just being a constant elephant the. Have seen coming within its first year analysts were hammering the company ll need to see improved financial from... 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