What We Can Learn from Expansion Blunders

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By Terence Jou

Target announced last Thursday that it plans on shutting down operations in Canada, closing 133 locations across the country over the next few months and leaving 17,600 employees out of work. Analysts had been attacking Target’s expansion plans since starting operations in 2011 and opening it’s first store in 2013. Critical about its “botched invasion”, experts highlight the following points that contributed to continued losses for the brand:

Distribution centre and store inventory tracking problems led to empty shelves
Disparity between price and product matches to the US stores
No e-commerce strategy as competitors like Amazon and Wal-Mart, who gained territory in online shopping
No explanation of the brand identity to the Canadian audience, it assumed Canadians knew what the brand was because Canadians have done cross-border shopping

Target isn’t the only brand that has had issues breaking into Canada from the US. Sam’s Club, Radio Shack, Sony Stores (which announced closures last week as well in Canada) are all recent examples of the retreat of US businesses who didn’t quite get the Canadian market. Closer to home, Tesco’s failed expansion into the US proved that it’s not just American giants that have expansion arrogance and fail – Tesco shuttered its Fresh & Easy experiment in 2013 after 6 years across the pond.

As a Canadian who’s worked on Target in the past, the news is pretty grim. But as marketers who work on global brands, we have to treat these failed expansions as learning points, and while we might not be launching any stores across the world anytime soon, we are launching global campaigns that are often picked up by different markets.

How can we apply these learnings to our creative ideas?

When designing a global campaign, local market consultation is required. While a one size fits all solution to try to include all regions is not possible, considerations into what can/cannot work for each markets must be evaluated with Client on what they are willing to address or sacrifice in the creative.
Don’t assume the audience in the market you’re going into know or understand your brand from your base market. They might have very perceptions of what your audience does in your base market. Education is always needed to align brand perceptions among regions.
Expansion and growth can not be treated as an overnight process. While technology has certainly helped us speed up process and access to information, there are other parts of the expansion and growth process that cannot happen overnight – brand perception being one of those key areas that take years to develop.

It is always good to remind ourselves and our Clients when evaluating creative work that global campaigns should be thought of in the same way as expansions – let’s not kid ourselves and think that everyone knows who we are and what we do.

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