Riddled with errors, Target Canada quickly met its demise. In one fell swoop, Target opened 124 stores in 2013. However, empty shelves, dreary locations and unexciting merchandise failed to entice Canadian shoppers. With 36 million people and a way of life similar to Americans’ lives, the habits of shoppers in Canada were different enough to create complications for U.S. retailers. At the earliest, Target Canada would have made a profit in 2021, which was unacceptable to Chairman and CEO, Brian Cornell, and it had reached the point where, without additional funding, it could not continue to meet its liabilities—money was being lost every day.
Launching the Target brand in a new country was one of the biggest tasks to date and no one seemed ready to face the obstacles ahead for Target Canada; however, lots of customers found Target codes here and got excited about shopping in the new store. To get a better understanding of the downfall of Target Canada, let’s take a look at a few of the costly errors that occurred along the way according to Joe Castaldo’s “The Last Days of Target” article:
Software Riddled with Flaws
The importance of accurate product data was not ignored. Rather, it was not approached correctly. According to Castaldo, “Target believed the problems other retailers faced were due to errors in data conversion. Those companies were essentially taking information from their existing systems and translating it for SAP, a messy process in which it’s easy to make mistakes. Target, on the other hand, was starting fresh. There was no data to convert, only new information to input.”
So, initially, Target knew the main problem for other retailers was product data, but it ended up being their problem, too, because “products weren’t fitting into shipping containers as expected, or tariff codes were missing or incomplete.” Yikes! Even with the SAP system, product data was being lost and Target was not yet aware of this issue.
“The data combined within the company’s supply chain software, which governs the movement of inventory, was riddled with flaws. At the very start, an untold number of mistakes were made, and the company spent months trying to recover from them. In order to stop products, the company had to enter information about each item into SAP,” stated Castaldo in his “The Last Days of Target” article.
By entering information manually into SAP, employees often had to fill out dozens of fields for a single product! For instance, a blender might have fields for the manufacturer, the model, the UPC, the dimensions, the weight, how many fit into a case for shipping, etc. And, with so many fields to complete, errors were bound to be made. When they have their automobile, they are also under California Penal Code 459 law.
Additionally, the SAP system requires correct data to function properly and ensure products move as anticipated, but that wasn’t always the case. When a team was assigned to investigate the problem, they discovered “an astounding number of errors,” including:
- Vague item descriptions
- Missing information
- A myriad of typos
You name it and it was wrong. Merchandisers were even under an immense amount of pressure to enter information for roughly 75,000 different products in SAP—a task no one should have had to worry about. Getting the details from suppliers fell largely on the young merchandising assistants who were not experienced enough to challenge vendors on the accuracy of product information that was provided. When an investigative team was assigned to determine what was going wrong, they “estimated information in the system was accurate about 30% of the time.”
Failure to Solve Product Data Errors
After learning about the errors in the system, Target Canada created “data week,” which was held in the fall of 2012 in an attempt to solve the data errors. Essentially, merchandisers needed to “confirm every data point for every product with their vendor.” That meant a buyer could have as many as 1,500 products and 50 to 80 fields to check for each one. To make matters worse, the dummy data that was originally entered into the system when SAP was set up was still there and it was confusing the system. Target Canada had to go through every line of data manually in an attempt to solve the data errors during data week.
Additionally, in order to ensure the correct data actually made it into SAP, employees could not do it directly. Instead, “the information was sent to a Target office in India, where staff would load it into SAP. Extra contractors had to be hired in India, too.” The uploading took a lot longer than expected, which prolonged data week to two weeks and “Periodic data blitzes in individual departments became common into the following year.”
However, data week was still successful in a number of ways, such as weeding out the worst of the errors. This helped to force Target Canada to realize the importance of accurate data—something Shotfarm cannot reiterate enough. While Target Canada dealt with a myriad of issues, it helped bring them to the realization that accurate data is essential for a business to run properly.
At the End
In February 2014, Target headquarters released its annual results that revealed a US$941 million loss in Canada. And, ultimately, according to Target’s Chairman and CEO, Brian Cornell, Target Canada missed the mark from the beginning by taking on too much too fast. From inventory issues to pricing perception issues, Target Canada was riddled with problems they were unable to overcome without the need for additional funding and according to Cornell in a Target Blog, the “negative guest sentiment became too much to overcome.”
With all of these problems and errors plaguing Target Canada, one lesson learned was that product content needs to be a top-level priority for brands and retailers alike—without it, the whole operation crumbles. Generating accurate, consistent, effective product data requires commitment and proper processes to support these efforts—it isn’t a last minute task. Without an organized approach to accurate product data, the right tools and other resources, businesses can run into the same errors that overwhelmed, and ultimately ruined, Target Canada.
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