Tuesday, May 27, 2014
Target Canada Targets Supply Chain Problems
Rather than begin with a few stores and expand gradually, Target acquired dozens of locations and launched a large-scale entry across the country. However, behind the scenes, the Minneapolis-based company was struggling with the physical distribution challenges of moving merchandise through its giant warehouses and into individual stores--and the equally daunting task of determining demand levels for merchandise in individual stores throughout Canada.
Merchandise was arriving at the warehouses, but the contents didn't always match what the electronic documentation said. Every box had to be verified by hand, a tedious and time-consuming task. As a result, store shelves were sparsely filled as merchandise piled up in the warehouses day after day after day.
In recent weeks, customers posted photos on social media and Canadian news outlets reported on the bare shelf situation, compared with fully-stocked shelves in U.S. Target stores. Just as bad are the news reports of Target Canada pricing some merchandise higher than the same merchandise in its U.S. stores, which the new Canadian head says he's prepared to address.
Now Target has decreed it will turn this situation around in 30 days. The brand started life in Canada with incredible goodwill because so many customers had shopped at U.S. stores for so long. This is a critical moment in its Canadian history and a lesson in the value of getting logistics just right. Of course, Target doesn't just have to get shelves stocked--it also has to learn what customers want in each local market and tweak its merchandise assortment accordingly.
Target is highly active in social media because its target market is tech-savvy and social. Target Canada has 1.2 million Facebook likes on its English page and more than 150,000 likes on its French-language page. Its Pinterest board has 170,000 followers. Another unique Target feature is its online mag, A Bullseye View, with fashion news, store innovations, new products, and more.
Target's mission statement "is to make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling our Expect More. Pay Less.® brand promise." It's working hard to turn that mission into reality by improving its supply chain and in-stock situation across Canada.