Conventional wisdom seems to be that Target will be as successful in Canada as it has been in the United States, following last week’s bombshell announcement that the company would enter the market via an acquisition. Target said it would acquire leasehold interests in 220 Zellers stores from the Hudson’s Bay Company, and during 2013 and 2014 it would open between 100 and 150 of the locations as Target stores.
The man in charge of the heavy lifting, and one of the reasons why Target’s brand of retail is expected to succeed in Canada, is Michael Francis, Target’s chief marketing officer. A lot of companies about to embark on their first foray into an international market might opt for a seasoned operations executive to manage the details. Not Target. They are putting the head marketing guy in charge because, long before Target ever arrives in Canada, the company wants to be sure it is preceded by its reputation that will ensure shoppers flock to its stores on opening day to discover what all the fuss is about in the states.
That strategy may make sense for Target, but Francis had better be sure he has the company’s best operations, supply chain and human resource executives helping him. New market entries on the scale that Target is about to undertake are fraught with potential trouble spots. Granted, it is Canada, but Target has never expanded beyond U.S. borders let alone with 100 to 150 stores during a two-year period. A lot could go right, and a lot could go wrong.
Just ask Walmart. The company operates 323 stores in Canada, and by the time Target opens its first stores, Walmart will have been operating in the market for nearly 20 years. It entered Canada via the acquisition of 122 Woolco stores back in 1994, and early on the company had a rough go of things for many years.
Target’ entry into Canada is no slam dunk, even though early commentary from financial analysts is giving the company the benefit of the doubt.