Target Corp. is giving Canadian journalists a preview of what’s to come when the popular department store opens up to 150 stores in 2013. Hollie Shaw talked with Tony Fisher, president of Target Canada, about which Zellers locations to take over and hurdles to entering the Canadian market.
Q: There is a high brand awareness among consumers for Target in Canada. As you assess the market are you finding any challenges to opening?
A: We can’t assume that everything we do here in the U.S. will translate completely to Canada. We are confident that our brand will translate. We will be looking to understand the local nuances. That will be very important. I think the merchandising team has a lot to learn about what is relevant at each individual local level.
Q: What is the most surprising thing you have found out about the Canadian retail market in the last five months?
A: The diversity and inclusivity within certain pockets. Coming out of [Toronto's Beaches neighbourhood] you’ll see Greek town, with some storefront signs that are in Greek. You don’t see a lot of that here [in the U.S.]. Another thing that surprised me is the expansive landscape with surprisingly different demographics and how we understand this massive landscape form coast to coast.
Q: What are the differences between Canadian and American consumers?
A: Starting with similarities, there is a focus on value; when I think about ‘expect more, pay less’, our brand promise, I think that will resonate very well in Canada. The differences at that local level in particular are really what we have to understand over the next two years.
Q: Do you find confusion in the marketplace about whether you are taking over Zellers, as opposed to certain Zellers leases?
A: Our relationship with Zellers was purely a real estate transaction. Zellers will continue to operate after this is all said and done, we are not acquiring their business, their supply chain infrastructure, their headquarters or their technology. What we bring to Canada will be uniquely Target.
Q: You have said that you might select some Zellers sites that will not become Target stores.
A: We wanted to look at the top 220 sites to make sure we found the ones that made the most strategic and financial value to Target. We hope that the majority of those are going to be of strategic and financial value for us to operate a retail store in. [If not], there are a variety of other options; maybe it’s subletting to another retailer, maybe it is giving it back to the landlord. There could be a number of options to generate strategic and financial value out of those stores without converting them to Target stores.
Q: Are you setting up distribution centres to accommodate food as well as your other merchandise?
A: We are very early in our distribution strategy. We know that the right supply chain infrastructure is going to be critical for us to deliver the strategy in Canada. It might include a combination of what is called ambient supply chain and a temperature-controlled supply chain [with cooling trucks for perishable food]. We haven’t made a decision [either way]. Food is a critical component of our strategy in the U.S., but it is also something that drives guests into the store [in the U.S.]. How we utilize food might be different in Canada than in the U.S. What we do in Canada has yet to be determined. We first have to understand the role of food in the competitive marketplace as well as what our guests want.
