Archived The untold tale of Target Canada’s difficult birth, tough life and brutal death

[asidius]

I found this excellent story on the birth of Target Canada and it's eventual demise. It's a long one but worth a read.

The Crazy Story of What Really Went Wrong at Target Canada

 

[Hardlinesmaster]

We knew that here. Still a very sad event.

 

[commiecorvus]

It's a good read.
I didn't realize how screwed up the ordering system was and that they knew it ahead of time.

 

[BottomPerformer]

Sounds like some of the issues we have here. Perfect what you already have before you try something new.

 

[tgtfla]

Great read, thanks for posting.

 

[Bosch]

And in spot fashion they games their own systems and it bit them in the ass. They have no one to blame but their own ego.

 

[Guest]

LMAO the title of this thread. Hahaha.

 

[griezmanns]

Thanks for sharing, it was an interesting read.

 

[RunForACallBox]

This was a great read!

 

[BullseyeBlues]

Target manages to mess up opening new stores in the US (I speak from experience opening one), so they should have known better than to try away from home.

 

[SFSFun]

That was a really good read @asidius!

Here are some highlights in case anyone doesn't want to read the whole thing:

It was an open secret that Target was interested in the Canadian market. But the company had previously decided it wanted to grow as quickly as possible if it were to enter Canada, rather than pursue a slow, piecemeal expansion. The challenge was in acquiring enough real estate to make that possible. The Zellers sale provided just such an opportunity. After Baker’s team let Target know Zellers was on the block—and Walmart was interested—the American company acted quickly to finalize its own offer.

Walmart would eventually back out, but Target put down $1.8 billion. Steinhafel bought everything, essentially committing the company to opening stores as quickly as possible to avoid paying rent on stores that weren’t operational and leaving landlords without anchor tenants. The price Steinhafel paid raised eyebrows. “When the numbers got up as high as they did, we found that pretty surprising,” says Mark Foote, the CEO of Zellers at the time.

The issues at the distribution centres caused havoc downstream. Stores might end up with an abundance of some products and a dearth of others. The auto-replenishment system, which keeps track of what a store has in stock, wasn’t functioning properly, either. Like many other parts of retail, replenishment is an exacting science that can go haywire without correct data. At Target Canada, the technology relied on having the exact dimensions of every product and every shelf in order to calculate whether employees need to pull more products to fill an empty rack. Much of that data was still incorrect, and therefore the system couldn’t be relied upon to make accurate calculations. The problem became immediately apparent when Target opened its first three test stores. Fisher made the call to shut off the system and replenish manually. That meant store employees had to literally walk the floor and check each shelf—a laborious, error-laden process. (Auto-replenishment wasn’t switched back on until later that year.)

At one point, Target Canada had printed a weekly flyer in which nearly every single item featured on the front cover was out of stock, a situation that would have been unheard of in Minneapolis.

A small group of employees also made an alarming discovery that helped explain why certain items appeared to be in stock at headquarters but were actually missing from stores. Within the chain’s replenishment system was a feature that notified the distribution centres to ship more product when a store runs out. Some of the business analysts responsible for this function, however, were turning it off—purposely. Business analysts (who were young and fresh out of school, remember) were judged based on the percentage of their products that were in stock at any given time, and a low percentage would result in a phone call from a vice-president demanding an explanation. But by flipping the auto-replenishment switch off, the system wouldn’t report an item as out of stock, so the analyst’s numbers would look good on paper. “They figured out how to game the system,” says a former employee. “They didn’t want to get in trouble and they didn’t really understand the implications.”

The company had also been learning more about using SAP correctly. Former employees describe decoding SAP as like peeling an onion—it had multiple layers and made you want to cry.

Steinhafel, the one who put the entire operation in motion and set it on a path toward self-destruction, has kept his head down. His LinkedIn profile simply lists him as a “retail professional.” (He did not respond to requests for comment.)

 

[redeye58]

Heard it all directly from the Canucks; every painful moment.
The video they made at the end was particularly heart-rending.

 

[Backroom81]

Reading through the article and the biggest fuckups I see was their decision to utilize new software systems for both logistics and POS along with a shortened time frame that didn't allow for proper testing/vetting.

Was adapting the current systems to use metric and Canadian currency such a difficult task that buying completely new software was a more attractive alternative?

 

[signingminion]

Quote about SAP is so true, lol.

 

[Formina Sage]

Reading through the article and the biggest fuckups I see was their decision to utilize new software systems for both logistics and POS along with a shortened time frame that didn't allow for proper testing/vetting.

Was adapting the current systems to use metric and Canadian currency such a difficult task that buying completely new software was a more attractive alternative?

All stemming from Gregg's overly aggressive decision to go balls-to-the-wall and open 100+ stores simultaneously.

I saw this article on LinkedIn this morning, one of my friends who works at Target HQ had these takeaways:

1. In business, it's important to have both a optimistic attitude and a realistic outlook; never one without the other.

2. If a company is going to leverage its brand power, it needs to remember --and deliver upon-- what built that strength in the first place.

 

[Formina Sage]

Also worth remembering was Bob Ulrich and his team's years of operational management experience (something the Target Canada team was sorely lacking), and how the phrase "slow, methodical growth" was practically a mantra. The Target Canada story is essentially the antithesis of that.

Sadly, I can't even totally blame Gregg like I alluded to in my previous post; the board of directors was probably the most influential driver of delivering so much in so little time.

 

[TallAPGuy]

I wonder if Spot is ever going to try again, but by doing a methodical approach and opening stores close to the border to take advantage of the US distribution centers.

 

[tgtfla]

Target manages to mess up opening new stores in the US (I speak from experience opening one), so they should have known better than to try away from home.

I too have helped open multiple stores , mostly smooth but some not , I remember one that they had the entire dairy section full two weeks before opening and a lot of product was going out of date before the big day.

 

[BigEyedPhish]

I too have helped open multiple stores , mostly smooth but some not , I remember one that they had the entire dairy section full two weeks before opening and a lot of product was going out of date before the big day.

This is what happens with every Dairy Reset...

As a Former-PA... Current Signing Specialist, why do u send Dairy Early for resets, but send my Signing in Late?

 

[Redzee]

Sadly, I can't even totally blame Gregg like I alluded to in my previous post; the board of directors was probably the most influential driver of delivering so much in so little time.

People making decisions that affect untold numbers of other people with no accountability to those people.

 

[Redzee]

Target isn't too big to fail but appears to be too big to function properly.

 

[MasterofLOG]

I wonder if Spot is ever going to try again, but by doing a methodical approach and opening stores close to the border to take advantage of the US distribution centers.

US products WON'T MEET CA labeling standards, ie:

french
metric

This applies nationwide in CA not just in PQ.. So the CA products would have to be stocked in US... and mmmm.. I based on the MSPK's I already get... I can just see getting poutine to SIM out .... Plus based on my discussion of just this in re NAFTA they may not be able to cross border ship this stuff with out duties... I was under the impression if it was a sealed trucked, no issues.. what do I know about it... I was set straight that it "don't work that way!"

Firsthand knowledge from living in CA... trust me 99.999% of CA would love to send PQ packing! au revoir!

 

[pfreshdude]

This is what happens with every Dairy Reset...

As a Former-PA... Current Signing Specialist, why do u send Dairy Early for resets, but send my Signing in Late?

Yogurt Endcaps are the worst too...they send us way too much. We usually get enough product in to fill the home, fill the endcap and have another 1/2 endcap of product sitting in the backroom