Tuesday, August 20, 2013

Target to Canada: "Hi Neighbour"

Even before Target opened its Canadian stores, it used a friendly, low-key "Hi, Neighbour!" campaign to reach out to shoppers who knew the store by reputation (and sometimes from shopping in its US stores).

Note the spelling of "neighbour," showing how carefully Target is, well, targeting Canada. The retailer's Canada Facebook page has 1.1 million likes and content that is designed specifically for the market. (Target Canada also has a Facebook page in French, with 64,000 likes.) Target Canada has 65,000 Twitter followers (fewer than 2,000 Twitter followers for the version in French.) Posts are friendly and frequent, with an informal tone that reinforces the "neighbourly" feeling.

Target has tremendous buying power, which helps it to price competitively. Its strong brand image is yet another advantage that helps it compete with long-established rival retailers throughout Canada.

As in many other markets, the retail industry in Canada is experiencing consolidation--creating both opportunities and challenges as supermarkets, drug chains, discount stores, and department stores battle for shoppers and market share. New entrants also put pressure on all stores to reexamine profit margins and slice prices. Despite some criticism that retail prices in Canada should be about the same as those in the US, increased competition from stores like Target may eventually help reduce the pricing gap.

Meanwhile, retailers are making deals to improve efficiencies and accelerate growth. This week, the retailer Metro agreed to operate Target Canada's in-store pharmacies in Quebec. Last month, the Loblaw's grocery chain sealed a deal for Shopper's Drug Mart. Earlier, Sobey's bought Safeway Canada. And in July, Hudson's Bay bought the upscale Saks Fifth Avenue department store chain, weighing further expansion in Canada. Will more US retailers say "Hi Neighbour" as they expand northward?

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