12 ms·

How Target failed in Canada

105 points by diego_moita 11y ago

mabbo 11y ago
> what emerged is a story of a company trapped by an overly ambitious launch schedule, an inexperienced leadership team expected to deal with the biggest crisis in the firm’s history, and a sophisticated retail giant felled by the most mundane, basic and embarrassing of errors. Big-bang launches aren't just bad in software. Imagine if they had opened one store, and then iterated on it until they got it right. Then a second store, maybe a third, and slowly spread out. They'd have built a successful organization in 5 years rather than one that collapses after 2.
- joezydeco 11y ago
  "Imagine if they had opened one store, and then iterated on it until they got it right" They couldn't launch just one store. That was the root cause of everything according to the article. Target Canada took over the leases on all that real estate at once - it was costing them money to leave those stores empty. That's what drove the insane schedule.
  - mabbo 11y ago
    They didn't have to buy all those leases. That was their choice, they're decision for how to run the project. And that was their downfall.
    - teh_klev 11y ago
      The leases were more or less all from the same company so it's most likely they got a deal for taking them all at once: Fourth paragraph: "Under Steinhafel, the company paid $1.8 billion for the leases to the entire Zellers chain in 2011" Also later we read that Walmart were sniffing around the same real estate: Walmart approached him and offered to buy the Zellers chain from HBC. Baker realized there was more value to Zellers’ real estate than to the operation itself, since Walmart had soundly beaten the brand. An astute deal maker, Baker and his team reached out to Target to stoke the company’s interest. And they'd planned for a fast entry into the Canadian retail 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. And all because they thought they really could do this: But Steinhafel may have felt justified in making such a bold move. In the three years since he was appointed CEO, he’d boosted revenue 8.3%—not a huge number, but an impressive one, considering the U.S. was experiencing the worst recession since the Great Depression. Steinhafel had joined Target in 1979, and his entire professional career had been spent with the company. Target experienced steady growth during that time, and Steinhafel had simply become accustomed to succeeding. “The company had never really failed before,” says a former employee who worked in both the U.S. and Canada. There was no reason to think Target wouldn’t be able to pull this off.
      - sergers 11y ago
        Seems walmart is buying up some of these failed target leases. http://www.cbc.ca/news/business/walmart-to-buy-13-former-target-canada-stores-and-a-distribution-centre-1.3066182 http://www.cbc.ca/news/business/walmart-to-buy-13-former-tar... 2 of these locations are within 20km of me, and not too far from 3 other walmarts within 20 minutes apart.
mkrfox 11y ago
That data goofiness issue is pretty much use case #1 for Mechanical Turk. Pay a bunch of people a few cents to do a sensibility check on the data, collect 10 for each item, and put any that are less than 100% through another round. Not even all that expensive. 10 cents each, 75,000 items, 10 checks each. $75,000 is quite a bargain for that kind of data validation. It'd take a day or two. (There's probably some horrible flaw with this idea)
- retroafroman 11y ago
  There's no real way a turker would know if the data is bad. Really only the merchandiser at HQ who was checking with the supplier would have had the source data (dimensions, units for those dimensions, case quantities, and so on) or warehouse workers who actually receive the product and can physically look at it. Suppliers sometimes change product attributes, quantity per case or pallet, or packaging without giving advance notice so the warehouse often ends up making these updates as they notice them, if they do. Data quality in supply chains is a constant struggle for many companies. It sounds like Target got hit bad with this due to a perfect storm of poorly trained merchandisers and SAP having dummy data that probably looked somewhat reasonable to the untrained eye.
  - cwilkes 11y ago
    Some of their issues were with the measurement system (English vs metric) and order of dimensions (length * width * height or width * length * height). I can see a turk system where they show a picture of the product and ask if the unit of measurement looks correct (being 2.5x off is pretty easy to guess) and if the order looks correct. They might not get the width and the length correct but the height could probably be guessed. Course that can probably be done with computer vision. So for $75k they could get it so at least the product would fit on the shelving units. That could easily pay for itself in a day. Products that failed these two simple tests should be looked at more closely for other issues.
    - retroafroman 11y ago
      True, but again, that assumes they have a picture of the data. If the product was sold online through target.com, a picture may exist somewhere. Otherwise, most company's item master data tables (that I've seen) don't include a picture. Also, they chose not to use data out of the old systems, because they wanted to avoid getting it out of the old and into the new system. This seems like it should've been the easier route but for whatever reason their legacy software probably made it much more difficult than needed.
rickdale 11y ago
I think these two paragraphs sum up the article well. It didn’t take long for Target to figure out the underlying cause of the breakdown: The data contained 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 stock products, the company had to enter information about each item into SAP. There could be dozens of fields for a single product. For a single product, such as a blender, there might be fields for the manufacturer, the model, the UPC, the dimensions, the weight, how many can fit into a case for shipping and so on. Typically, this information is retrieved from vendors before Target employees put it into SAP. The system requires correct data to function properly and ensure products move as anticipated. A team assigned to investigate the problem discovered an astounding number of errors. Product dimensions would be in inches, not centimetres or entered in the wrong order: width by height by length, instead of, say, length by width by height. Sometimes the wrong currency was used. Item descriptions were vague. Important information was missing. There were myriad typos. “You name it, it was wrong,” says a former employee. “It was a disaster.”
- refurb 11y ago
  Would the width x length x height measurement even matter? It's still the same shaped box. I guess if boxes could only be stack standing up it might matter.
  - kevan 11y ago
    For shipping I don't think it would matter much but for in-store displays it helps to show the front of the box to customers.
    - jacquesm 11y ago
      Indeed, shelf face space is the most precious commodity to a retailer.
  - zyxley 11y ago
    Take a look at planograms for retail displays.
kazinator 11y ago
Hi Diego! Please update the link to the original Canadian Business article (given in the article): http://www.canadianbusiness.com/the-last-days-of-target-canada/ http://www.canadianbusiness.com/the-last-days-of-target-cana... The Maclean's copy of it is unreadable due to the ridiculous font combined with narrow column width.
- dang 11y ago
  We changed the URL from http://www.macleans.ca/economy/business/what-really-happened-at-target-canada-the-retailers-last-days/ http://www.macleans.ca/economy/business/what-really-happened.... That reveals that it was posted before (https://news.ycombinator.com/item?id=10952937 https://news.ycombinator.com/item?id=10952937), but since there is active interest in this story we'll leave this one up and merge those comments here.
fatjokes 11y ago
OOC, Why do people shop at Target instead of Walmart? For me, the only reason is distance---if there's a Target closer than a Walmart. Otherwise the two are pretty much interchangeable.
- goodJobWalrus 11y ago
  In the US, I shopped for (some) clothes and household items. They were much better than stuff at Walmart. This was 10 years ago, and at the time, Target was the first one to pioneer famous designers doing a low end (Target) line. So yeah, my perception was that they had better stuff.
- giarc 11y ago
  Are you referring to Canadian Target vs Walmart? If so, I agree. I feel like Walmart Canada doesn't have quite the same reputation it does south of the border.
- skrebbel 11y ago
  They tend to have better bicycle parking though.
- sotojuan 11y ago
  Clothes, household goods, furniture, etc are much better at Target, but the real reason is because Target is nicer. It's cleaner, better designed, the employees are drilled into being helpful (I worked there)—it just feels better to be at a Target. They get fashion designers to do collaborations with their clothing line as well, which helps their image. 3.1 Phillip Lim for Target a couple of years ago sold out instantly. In general their clothing is on par with a real clothing store. I have a cardigan/jacket thing I got there in 2011 that has no holes or damage. Walmart has a "lower class" reputation, and so do the people that go there often. Don't get me wrong, they are both big box stores. They aren't that different under the hood, but Target managed to present itself with a cleaned-up image that attracts a lot of middle and upper middle class people who don't want to be seen at or go to Walmart.
  - fgandiya 11y ago
giarc 11y ago
Here is my anecdotal reason why Target failed. Target missed the boat by about 15-20 years. I entered 4 or 5 different Target locations in Canada and none of them had a full grocery selection. Targets were basically Walmarts before they began converting to full grocery stores. Therefore, shoppers had the option to either go to a Walmart Superstore and get everything they needed, or go to Target and get 80% of what you needed, the remaining 20% being available at a grocery store. Beyond all the data logistics issues, Target would have never succeeded in my opinion as they couldn't compete with Walmart on selection (or Great Canadian Superstore for that matter).
- freebasedgirl 11y ago
  The problem I found is in the US there is a class system of those who despise Walmart as being for the "commoners". In Canada the stigma is much less to non-existent. Walmart pays more, has the same insurance for all its employees, and does not actively promote "anti-union" videos to new hires.
  - 67726e 11y ago
    I wouldn't even say commoners. Walmart has a reputation for having very trashy, uncouth people walking about. The employees at Target also seem a bit friendlier, whereas Walmart probably scrapes.the bottom of the barrel for its employees. My mother has been the weekend manager at a Walmart for 30 years and it's a real shit-show keeping staff because most are incredibly unreliable and don't give a damn about their job.
    - bozo1979 11y ago
      Walmart in Canada is much, much nicer than in the US. In the US, we almost never went to Walmart and preferred shopping at Target. When we moved back to Canada, we initially were delighted that there was now a Target store in our area. We had horrible experiences and it turned us off completely. I feel really bad for the people who lost their jobs.. for young people in their first job, it might be okay. For older folks who probably quit a job some place else, it is really a hard experience. Walmart stores in Toronto that I visited, definitely seemed crowded with long check outs. Other cities in Ontario, the checkouts seem to be adequately staffed. I'm surprised how different Walmart Canada is from the US operation!
canistr 11y ago
My thought is that because Target's downfall was really location. Zellers got significantly worse and worse over the years that eventually, people stopped shopping there and took their business elsewhere. As a result, Zellers only existed in dead-end malls with low foot traffic because the majority of people went to Walmart. Target decided it was a good idea to buy up all the Zellers locations and put their stores in there. But by that time, people's habits changed. Target wasn't going to revive dead malls.
- tjl 11y ago
  That's not entirely true. I know that Target in Waterloo was in one of the major K-W malls that gets a lot of traffic. Even still, the few times I shopped at the Target, it was dead.
- dghughes 11y ago
  The Zellers here Charlottetown was a busy place yes it was run-down but quite a few people shopped there every day. Walmart did take a lot of the lower end product sales and Sears was similar to Zellers with a few higher quality items but Zellers was still busy. You but something at Walmart it falls apart in six months, Sears lasts and stands by what they sell, Zellers was in the middle.
- Tiktaalik 11y ago
  Some of those Zellers locations were super premium locations. In BC one was at Oakridge Mall, which is one of the top malls in North America by sales by square foot. They also grabbed a spot at Metrotown, another very successful mall. Unfortunately they also grabbed a lot of other locations that were probably underperforming. They over extended themselves.
- slavik81 11y ago
  I was surprised when they announced they were coming to Canada. They seemed like another mid-market red-coloured retailer. Why did they think they'd succeed where Zellers failed?
the_unknown 11y ago
I loved my local Canadian Target store while it existed. Probably for some of the reasons it eventually went out of business... Target was always easy to shop at - nobody else was there - I could walk down any aisle and not have to deal with other people getting in my way. Fresh food delivered from the local Sobey's distribution centre (at least I'm pretty sure that's where it came from). And nobody else pawing through it before I chose what I wanted. Somewhat unique stuff - sure they had all the same mass-produced junk that WalMart did - just slightly different. So it was basically the same but just different enough to be say "Ha! I'm unique" Good prices - I know people were always complaining that WalMart was cheaper but that wasn't necessarily true. Target had some good deals as well. And if you combined your Target shopping with an occasional trip to Costco you were pretty well covered.
- jhou2 11y ago
  This was my experience too. I enjoyed shopping at my local Canadian Target. Clean aisles, brightly lit. Well priced, good quality. Superior experience to Walmart, Canadian Tire, or Loblaws. Sad when they exited the market.
kyllo 11y ago
Complicating matters was the dummy information entered into the system when SAP was set up. That dummy data was still there, confusing the system, and it had to be expunged Testing in production, good job. Sounds like a typical systems integration fail, IT incompetents trying to hook up SAP, JDA, Manhattan, and NCR with no clue how much time and money it really takes to assemble such a complex systems infrastructure, and getting fleeced by consultants in the process.
- serge2k 11y ago
  > Testing in production, good job Well, failing to properly set up production is probably more accurate.
- charlesism 11y ago
  "IT incompetents trying to hook up SAP" The major incentive for SAP is to drive customers to their consultants. It's basically designed to be impossible for anyone else to maintain, or use. Target should have modified their American in-house system instead, where the incentives align with Target running smoothly.
joneholland 11y ago
> SAP, Accenture I'm surprised they opened at all.
- charlesism 11y ago
  Nonsense, SAP is great. All Target needed to do is G42 their VV6s into a bunch of CC5 subtables. Then they'd have been free to JK8 the W1 data to an F123098 batch, and... abracadabra, Y29 reports for the whole company! Hmm, wait a moment. I think that should be G420, not G42. Let me call my consultant, and I'll get back to you.
  - somedangedname 11y ago
    "RPCEWGJ2 is a standard Executable ABAP Report available within your SAP system (depending on your version and release level)...If you would like to see the full code listing simply enter RPCEWGJ2 into the relevant SAP transaction such as SE38 or SE80" Found some documentation on Google - I thought you were joking :(
    - charlesism 11y ago
      I like their use of "simply" in that sentence.
      - chris_wot 11y ago
        What I love about SAP is that the only way to work in it is to be trained inhouse at the cost of literally tens of thousands of dollars. Even Oracle lets you install their database for free to figure out how to use it. You'll never get that chance with SAP. Is it any wonder SAP analyst get paid so much money? I'd say it's not just for their expertise, it's because SAP have sewn up the market.
  - purephase 11y ago
    It's amazing that a simple comment on HN reminds me, viscerally, of how I will never, ever write software. So much so, that if I ever find myself contemplating this approach, I'll jump off the nearest building.
DIVx0 11y ago
I live in Minneapolis and Target is a huge presence here amongst just about every type of professional. Everyone knows someone who works(ed) at Target corp and from catching anecdotes from various people it became clear it was no secret that Target Canada was in bad shape from the beginning. This failure not only damaged the careers of many Canadians but also irrevocably damaged the professional lives of people in my town who were laid off. While the job market in Minneapolis is fairly good it became a struggle for some of these newly jobless Target folks to find work in town because of the massive white collar layoffs. Target should have been successful in Canada, all of the problems in this article are linked to over the top pressure and hubris.
skylan_q 11y ago
Most everyone I asked about it's failure said that they just didn't get Canada. It acted as it Canada was a 51st state. The lack of inventory didn't help either. The one closest to me had about 10,000 options for bath mats and bath robes. Everything else was out of stock and the food section had limited selection and higher prices than other nearby stores.
sergers 11y ago
i went to the target a handfull of times in canada. most targets were in old zellers locations... when they opened, they seemed like a bit more modern and cleaner zellers, but still in the same not so high traffic crappy locations. the zellers theme was red, so was target... people were excited about target opening based off experiences crossing the border and shopping at USA Target. the USA stores differed from the Canadian stores. 1)canada target didnt have the same selection/inventory of products. 2)prices were significantly different... even when factoring in the exchange rate, it was still cheaper to shop at USA target locations on a trip across the border. walmart here, atleast in locations near me in canada are far cleaner and newer looking compared to walmart USA. most existing were upgraded to "super centers" and several more locations are opening soon where as in the states they are downsizing and closing locations.
moeedm 11y ago
Walmart. Thats how.
dghughes 11y ago
When Target opened in my town I went in to see what they had for men's clothing and walked out five minutes later. Nothing. There were piles of clothing for (obviously) teen girls, a lot for women and boys but for men there was nothing. I'm in my 40s I have no interest dressing like a 15 year-old. Overall choice for everything else was very limited and the prices were higher than the previous store there (Zellers). Some people who went to Target in the USA said the choices in Canada were very limited and prices were double for the same items. I bet millions were spent on renovating the local store here alone since it was pretty grungy before Target took it over. Worse is when Target took over they were the anchor store and demanded all the little kiosks in the main route of the mall be closed. No sunglasses huts, engraving, tobacco or lottery booths either since rumour was Target is owned/started by a fundamentalist religious family(?). Target put a lot of small stores of of business before they even opened the Target store causing a lot of hurt feelings in a small town.
- HillRat 11y ago
  This is a bit off-topic, but just to be clear, Target is considered generally politically-progressive for a major, publicly-traded retailer, while the direct descendent of its founder is the current, very liberal, governor of Minnesota. Having said that, I'd say that they were focusing on the wrong methods of creating an appealing retail environment, their other issues being noted.
- Grishnakh 11y ago
  >since rumour was Target is owned/started by a fundamentalist religious family(?). I think you might be confusing them with Hobby Lobby, the company that went to the US Supreme Court so they could deny contraceptive coverage in their employees' health insurance plans. I won't set foot in a Hobby Lobby now. With them closing the kiosks, that just sounds like your typical dick corporation move, to try to shut down competition and drive up traffic in their store.
  - wtbob 11y ago
    > I think you might be confusing them with Hobby Lobby, the company that went to the US Supreme Court so they could deny contraceptive coverage in their employees' health insurance plans. I won't set foot in a Hobby Lobby now. They didn't deny contraceptives; they denied (what they believe to be) abortaficients. Big difference.
hluska 11y ago
I don't think that Target spent enough time researching Canada. Perhaps if they had hired some Canadian executives, the result would have been different. My favourite example has to do with winter hats. In Canada, we call them toques (it is not pronounced 'toke'), yet in Target, all the signage said 'hats'. That sounds really small, but it was my most memorable example of a company that genuinely did not get Canadians. They treated us like Americans and, while Americans are cool, we aren't Americans!!
- rasz_pl 11y ago
  but, but wouldn't you want to be cool?
- sergers 11y ago
  tuques are a type of knitted hat usually, not specific to winter. them generalizing a section including tuques as hats is correct, i dont think i have seen a "tuques" section in any canadian store, they would be in the hat section. toques are hardly a canadian thing, and alot of canadians refer to them as beanies. target did not fail cause they werent canadian enough(is anything really canadian?), they failed due to locations, business model, inventory, and technical issues on their backend. if anything they failed because they werent "american" enough, as canadians were expecting a similar experience to USA target shopping
  - sandworm101 11y ago
    >> is anything really canadian? Yes. Many things. Watch TV? Vancouver? Nickleback? Or drake? Or pretty much 1/3 of Hollywood? Canada and canadians are very over-represented in US culture. They are just hard to spot. Cruz 2016 -
    - sergers 11y ago
      what i meant was, besides originated/born in canada, what truly makes anything canadian? minus drake who does alot for toronto, what do any entertainment/sports/actor/star from Canada still live in canada or represent themselves as canadian or produce a unique viewpoint that is canadian. canadian content is usually pretty boring on TV. there have been some good original shows, but few. i am born and raised in vancouver, continue to live here, 4th generation of my family to be born in canada.
Naga 11y ago
Every time I read an article about Target, the only people who come out looking good in the end is the Hudson's Bay Company. While I loved Zellers and shopped there on a regular basis, it was worth more for its locations than the actual business. I worked at Zellers briefly in the years leading up to its eventual dismantlement and the question on everyone's mind was really "what is going to happen to all of these stores?" HBC made out like a bandit by seducing Target into buying them in one fell swoop.
- alanctgardner3 11y ago
  Do you have any insight into when Zeller's was good and what went wrong? HBC seems to have done a much better job turning around The Bay locations (albeit very gradually) and apparently they also own Saks? I'm pretty young and all of my experiences were a combo of dirty, badly stocked stores, products that I didn't care about, bad fluorescent lighting, and employees who didn't give a shit. I also don't really shop at Walmart, but Walmart seems kind of sterile and organized, at least. I honestly did not know why anyone would ever go into a Zeller's - they had clothes and housewares and groceries and stuff, but somebody else seemed to do all of those things much better.
  - ayuvar 11y ago
    Zellers (no apostrophe, even though it was started by a guy named Zeller) was able to stay 'on top' of the Canadian department store game for quite some time. They were founded in the 20s, profitable well into the 90s, and had a niche and a format that was poorly understood by existing department stores. Their only real competition was K-Mart. HBC bought them out in the early 80s and then started shovelling more acquisitions on top; Bonimart, Fields, Woodward's. They had enough capital to start fixing things - in the mid to late 80s your parents probably remember "Club Z" and pushing aggressively against their remaining competition to make sure they had the lowest price in town. In the late 90s, just as Walmart was starting to show up in Canada (by buying up the burned-out corpse of Woolworth's) and threaten pretty much every brand under the HBC umbrella, HBC centralized decision making and planning in HBC's Toronto offices and under HBC execs. K-Mart basically collapsed at this time from the same pressure; HBC opened up the purse and bought a lot of old K-Mart locations, intending to convert them. Eatons also died, and their assets were acquired by Sears. I worked at Zellers to put myself through school briefly during this general time period, and I remember hysteria and confusion in all ranks of retail and management staff. Communication with HBC was generally command-and-control with no mechanism to individually fix brand-wide or regional problems. Actual Bay stores in the late 90s were also doing poorly, and it was likely that Zellers was seen as a losing anchor that needed to slash margins further to compete with Walmart. I will miss the chain. I had never really gone in prior to working there, but after working there I had gained enough weird institutional memory to be able to quickly find whatever I was looking for even in Zellers I had never visited before. It is now basically a race in Canada to see if HBC or Sears will pull out first. Neither one of them are doing particularly well. Canada is, in general, not kind to its department stores. http://ottawacitizen.com/business/local-business/canadas-big-box-graveyard-target-joins-illustrious-company http://ottawacitizen.com/business/local-business/canadas-big...
Negative1 11y ago
I was living abroad in Canada at the time and when Target showed up I was super psyched. I was the only one. I think it's easy to blame the horrible and run down locations they took over from Zellers but people still shopped at Walmarts in similar places. In the end, it felt like the same experience we had with Amazon (or Netflix) in Canada; the shell is there with some good products but mostly lacking in everything that makes Target a fun (and addictive) place to shop. The lack of products didn't help but that had more to do with Quebec's super bizarre language police/laws. The irony is Target Canada was at least slightly better than Walmart Canada and many MANY times better than Canadian Tire, a place that was almost always packed with people. It's sad but I don't think Target ever had a chance in Canada.
skywhopper 11y ago
This failure could have been predicted with a simple understanding of Systemantics, one of the precepts of which is: A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over, beginning with a working simple system. https://en.wikipedia.org/wiki/Systemantics https://en.wikipedia.org/wiki/Systemantics
mbesto 11y ago
This is why the leveraged systems integrator consulting model (i.e. Accenture, Deloitte, etc.) is inherently flawed. If only these firms would take a few experience senior people (as opposed to a tiered leveraged or pyramid hierarchy with tons of juniors at high margins) and implement the systems I think they would find a lot less failures.
faitswulff 11y ago
What an incredible debacle. Select quotes regarding their technology decisions: > "While SAP might be considered best in class, it’s an ornery, unforgiving beast. Sobeys introduced a version of SAP in 1996 and abandoned the effort by 2000. (It wasn’t until 2004 that the grocery chain tried again.) Similarly, Loblaws started moving to SAP in 2007 and projected three to five years to get it done. The implementation took two years longer than expected because of unreliable data in the system. Target was again seeking to do the impossible: It was going to set up and run SAP in roughly two years." > "The company wasn’t doing it alone, however, and hired Accenture (which also worked on Loblaws’ integration) as the lead consultant on the project. [...] Accenture, which Target hired as a consultant on SAP, said in a statement: “Accenture completed a successful SAP implementation for Target in Canada. The project was reviewed independently and such review concluded that there is no Accenture connection with the issues you refer to.”" > "The company had purchased a sophisticated forecasting and replenishment system made by a firm called JDA Software, but it wasn’t particularly useful at the outset, requiring years of historical data to actually provide meaningful sales forecasts." > "The depots were hampered by other factors, caused by lingering data problems and the learning curve associated with the new systems. Manhattan, the company’s warehouse software, and SAP weren’t communicating properly." > "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." > "To add even more headaches, the point-of-sale system was malfunctioning. The self-checkouts gave incorrect change. The cash terminals took unusually long to boot up and sometimes froze. Items wouldn’t scan, or the POS returned the incorrect price. Sometimes a transaction would appear to complete, and the customer would leave the store—but the payment never actually went through. The POS package was purchased from an Israeli company called Retalix, which worked closely with Target Canada to address the issues. Progress was maddeningly slow. In 2014, a Retalix team flew to Toronto to see first-hand what Target was dealing with. After touring a store, one of the Retalix executives remarked, “I don’t understand how you’re using this,” apparently baffled the retailer managed to keep going with so many bugs. But Target didn’t have time to find a new vendor and deploy another technology. [...] Unlike SAP, Retalix is not an industry standard, and why Target chose it isn’t entirely clear." > "Like SAP, the replenishment software was brand new to Target, and the company didn’t fully understand how to use it."
faitswulff 11y ago
> 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.” I think this article, and the employee quoted here, works too hard to excuse immoral behavior in their junior business analysts.
- SixSigma 11y ago
  For me it is the fact that they receive punishment for stock outs, especially in a company in such trouble! Why would you only look at stock amount and not stock turn. I would be concerned at "in stock, sold zero". This whole story is a clusterfuck. "We are going to have a new product, it ships on June 1st, no matter how ready it is" has never been a wise choice.
- iSnow 11y ago
  The metric is bullshit, those business analysts would get punished even if the delay was not their direct fault. If you go crazy with KPI's, people will find ways to avoid getting bit by them. Show me a metric and I'll show you a game.
Tiktaalik 11y ago
Here's my anecdote. It was late November after Target had been open for a while. I popped in to look for Christmas stuff and I was blown away by the quality. All of their decorations and trees were dramatically better in quality than the usual cheap garbage found at Canadian Tire and Walmart. I was super impressed. I was on my lunch break and I didn't have a lot of time, so I decided I'd come back on a weekend to pick up some things. I show up again next week in the first week of December with my friend, because he was looking to buy an artificial tree, and I was shocked to find out that they were basically sold out of all trees. They still had some decorations but not a lot. I couldn't understand it. How on earth do you run out of Christmas trees in the first week of December? I asked this to a young guy who was working there and he just shook his head in disappointment. He'd clearly been hearing a lot of this. Their logistics were completely messed up.
_rpd 11y ago
People are mentioning Walmart as a competitor, but not Amazon. Is Amazon not competitive in Canada?
SixSigma 11y ago
Sounds like they got played by Walmart too. "Raise you $1.6bn" "Raise you $1.8bn" "I'm out, enjoy Canada"

105 points by diego_moita 11y ago

mabbo 11y ago

> what emerged is a story of a company trapped by an overly ambitious launch schedule, an inexperienced leadership team expected to deal with the biggest crisis in the firm’s history, and a sophisticated retail giant felled by the most mundane, basic and embarrassing of errors. Big-bang launches aren't just bad in software. Imagine if they had opened one store, and then iterated on it until they got it right. Then a second store, maybe a third, and slowly spread out. They'd have built a successful organization in 5 years rather than one that collapses after 2.

joezydeco 11y ago
"Imagine if they had opened one store, and then iterated on it until they got it right" They couldn't launch just one store. That was the root cause of everything according to the article. Target Canada took over the leases on all that real estate at once - it was costing them money to leave those stores empty. That's what drove the insane schedule.
- mabbo 11y ago
  They didn't have to buy all those leases. That was their choice, they're decision for how to run the project. And that was their downfall.
  - teh_klev 11y ago
    The leases were more or less all from the same company so it's most likely they got a deal for taking them all at once: Fourth paragraph: "Under Steinhafel, the company paid $1.8 billion for the leases to the entire Zellers chain in 2011" Also later we read that Walmart were sniffing around the same real estate: Walmart approached him and offered to buy the Zellers chain from HBC. Baker realized there was more value to Zellers’ real estate than to the operation itself, since Walmart had soundly beaten the brand. An astute deal maker, Baker and his team reached out to Target to stoke the company’s interest. And they'd planned for a fast entry into the Canadian retail 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. And all because they thought they really could do this: But Steinhafel may have felt justified in making such a bold move. In the three years since he was appointed CEO, he’d boosted revenue 8.3%—not a huge number, but an impressive one, considering the U.S. was experiencing the worst recession since the Great Depression. Steinhafel had joined Target in 1979, and his entire professional career had been spent with the company. Target experienced steady growth during that time, and Steinhafel had simply become accustomed to succeeding. “The company had never really failed before,” says a former employee who worked in both the U.S. and Canada. There was no reason to think Target wouldn’t be able to pull this off.
    - sergers 11y ago
      Seems walmart is buying up some of these failed target leases. http://www.cbc.ca/news/business/walmart-to-buy-13-former-target-canada-stores-and-a-distribution-centre-1.3066182 http://www.cbc.ca/news/business/walmart-to-buy-13-former-tar... 2 of these locations are within 20km of me, and not too far from 3 other walmarts within 20 minutes apart.

mkrfox 11y ago

That data goofiness issue is pretty much use case #1 for Mechanical Turk. Pay a bunch of people a few cents to do a sensibility check on the data, collect 10 for each item, and put any that are less than 100% through another round. Not even all that expensive. 10 cents each, 75,000 items, 10 checks each. $75,000 is quite a bargain for that kind of data validation. It'd take a day or two. (There's probably some horrible flaw with this idea)

retroafroman 11y ago
There's no real way a turker would know if the data is bad. Really only the merchandiser at HQ who was checking with the supplier would have had the source data (dimensions, units for those dimensions, case quantities, and so on) or warehouse workers who actually receive the product and can physically look at it. Suppliers sometimes change product attributes, quantity per case or pallet, or packaging without giving advance notice so the warehouse often ends up making these updates as they notice them, if they do. Data quality in supply chains is a constant struggle for many companies. It sounds like Target got hit bad with this due to a perfect storm of poorly trained merchandisers and SAP having dummy data that probably looked somewhat reasonable to the untrained eye.
- cwilkes 11y ago
  Some of their issues were with the measurement system (English vs metric) and order of dimensions (length * width * height or width * length * height). I can see a turk system where they show a picture of the product and ask if the unit of measurement looks correct (being 2.5x off is pretty easy to guess) and if the order looks correct. They might not get the width and the length correct but the height could probably be guessed. Course that can probably be done with computer vision. So for $75k they could get it so at least the product would fit on the shelving units. That could easily pay for itself in a day. Products that failed these two simple tests should be looked at more closely for other issues.
  - retroafroman 11y ago
    True, but again, that assumes they have a picture of the data. If the product was sold online through target.com, a picture may exist somewhere. Otherwise, most company's item master data tables (that I've seen) don't include a picture. Also, they chose not to use data out of the old systems, because they wanted to avoid getting it out of the old and into the new system. This seems like it should've been the easier route but for whatever reason their legacy software probably made it much more difficult than needed.

rickdale 11y ago

I think these two paragraphs sum up the article well. It didn’t take long for Target to figure out the underlying cause of the breakdown: The data contained 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 stock products, the company had to enter information about each item into SAP. There could be dozens of fields for a single product. For a single product, such as a blender, there might be fields for the manufacturer, the model, the UPC, the dimensions, the weight, how many can fit into a case for shipping and so on. Typically, this information is retrieved from vendors before Target employees put it into SAP. The system requires correct data to function properly and ensure products move as anticipated. A team assigned to investigate the problem discovered an astounding number of errors. Product dimensions would be in inches, not centimetres or entered in the wrong order: width by height by length, instead of, say, length by width by height. Sometimes the wrong currency was used. Item descriptions were vague. Important information was missing. There were myriad typos. “You name it, it was wrong,” says a former employee. “It was a disaster.”

refurb 11y ago
Would the width x length x height measurement even matter? It's still the same shaped box. I guess if boxes could only be stack standing up it might matter.
- kevan 11y ago
  For shipping I don't think it would matter much but for in-store displays it helps to show the front of the box to customers.
  - jacquesm 11y ago
    Indeed, shelf face space is the most precious commodity to a retailer.
- zyxley 11y ago
  Take a look at planograms for retail displays.

kazinator 11y ago

Hi Diego! Please update the link to the original Canadian Business article (given in the article): http://www.canadianbusiness.com/the-last-days-of-target-canada/ http://www.canadianbusiness.com/the-last-days-of-target-cana... The Maclean's copy of it is unreadable due to the ridiculous font combined with narrow column width.

dang 11y ago
We changed the URL from http://www.macleans.ca/economy/business/what-really-happened-at-target-canada-the-retailers-last-days/ http://www.macleans.ca/economy/business/what-really-happened.... That reveals that it was posted before (https://news.ycombinator.com/item?id=10952937 https://news.ycombinator.com/item?id=10952937), but since there is active interest in this story we'll leave this one up and merge those comments here.

fatjokes 11y ago

OOC, Why do people shop at Target instead of Walmart? For me, the only reason is distance---if there's a Target closer than a Walmart. Otherwise the two are pretty much interchangeable.

goodJobWalrus 11y ago
In the US, I shopped for (some) clothes and household items. They were much better than stuff at Walmart. This was 10 years ago, and at the time, Target was the first one to pioneer famous designers doing a low end (Target) line. So yeah, my perception was that they had better stuff.
giarc 11y ago
Are you referring to Canadian Target vs Walmart? If so, I agree. I feel like Walmart Canada doesn't have quite the same reputation it does south of the border.
skrebbel 11y ago
They tend to have better bicycle parking though.
sotojuan 11y ago
Clothes, household goods, furniture, etc are much better at Target, but the real reason is because Target is nicer. It's cleaner, better designed, the employees are drilled into being helpful (I worked there)—it just feels better to be at a Target. They get fashion designers to do collaborations with their clothing line as well, which helps their image. 3.1 Phillip Lim for Target a couple of years ago sold out instantly. In general their clothing is on par with a real clothing store. I have a cardigan/jacket thing I got there in 2011 that has no holes or damage. Walmart has a "lower class" reputation, and so do the people that go there often. Don't get me wrong, they are both big box stores. They aren't that different under the hood, but Target managed to present itself with a cleaned-up image that attracts a lot of middle and upper middle class people who don't want to be seen at or go to Walmart.
- fgandiya 11y ago

giarc 11y ago

Here is my anecdotal reason why Target failed. Target missed the boat by about 15-20 years. I entered 4 or 5 different Target locations in Canada and none of them had a full grocery selection. Targets were basically Walmarts before they began converting to full grocery stores. Therefore, shoppers had the option to either go to a Walmart Superstore and get everything they needed, or go to Target and get 80% of what you needed, the remaining 20% being available at a grocery store. Beyond all the data logistics issues, Target would have never succeeded in my opinion as they couldn't compete with Walmart on selection (or Great Canadian Superstore for that matter).

freebasedgirl 11y ago
The problem I found is in the US there is a class system of those who despise Walmart as being for the "commoners". In Canada the stigma is much less to non-existent. Walmart pays more, has the same insurance for all its employees, and does not actively promote "anti-union" videos to new hires.
- 67726e 11y ago
  I wouldn't even say commoners. Walmart has a reputation for having very trashy, uncouth people walking about. The employees at Target also seem a bit friendlier, whereas Walmart probably scrapes.the bottom of the barrel for its employees. My mother has been the weekend manager at a Walmart for 30 years and it's a real shit-show keeping staff because most are incredibly unreliable and don't give a damn about their job.
  - bozo1979 11y ago
    Walmart in Canada is much, much nicer than in the US. In the US, we almost never went to Walmart and preferred shopping at Target. When we moved back to Canada, we initially were delighted that there was now a Target store in our area. We had horrible experiences and it turned us off completely. I feel really bad for the people who lost their jobs.. for young people in their first job, it might be okay. For older folks who probably quit a job some place else, it is really a hard experience. Walmart stores in Toronto that I visited, definitely seemed crowded with long check outs. Other cities in Ontario, the checkouts seem to be adequately staffed. I'm surprised how different Walmart Canada is from the US operation!

canistr 11y ago

My thought is that because Target's downfall was really location. Zellers got significantly worse and worse over the years that eventually, people stopped shopping there and took their business elsewhere. As a result, Zellers only existed in dead-end malls with low foot traffic because the majority of people went to Walmart. Target decided it was a good idea to buy up all the Zellers locations and put their stores in there. But by that time, people's habits changed. Target wasn't going to revive dead malls.

tjl 11y ago
That's not entirely true. I know that Target in Waterloo was in one of the major K-W malls that gets a lot of traffic. Even still, the few times I shopped at the Target, it was dead.
dghughes 11y ago
The Zellers here Charlottetown was a busy place yes it was run-down but quite a few people shopped there every day. Walmart did take a lot of the lower end product sales and Sears was similar to Zellers with a few higher quality items but Zellers was still busy. You but something at Walmart it falls apart in six months, Sears lasts and stands by what they sell, Zellers was in the middle.
Tiktaalik 11y ago
Some of those Zellers locations were super premium locations. In BC one was at Oakridge Mall, which is one of the top malls in North America by sales by square foot. They also grabbed a spot at Metrotown, another very successful mall. Unfortunately they also grabbed a lot of other locations that were probably underperforming. They over extended themselves.
slavik81 11y ago
I was surprised when they announced they were coming to Canada. They seemed like another mid-market red-coloured retailer. Why did they think they'd succeed where Zellers failed?

the_unknown 11y ago

I loved my local Canadian Target store while it existed. Probably for some of the reasons it eventually went out of business... Target was always easy to shop at - nobody else was there - I could walk down any aisle and not have to deal with other people getting in my way. Fresh food delivered from the local Sobey's distribution centre (at least I'm pretty sure that's where it came from). And nobody else pawing through it before I chose what I wanted. Somewhat unique stuff - sure they had all the same mass-produced junk that WalMart did - just slightly different. So it was basically the same but just different enough to be say "Ha! I'm unique" Good prices - I know people were always complaining that WalMart was cheaper but that wasn't necessarily true. Target had some good deals as well. And if you combined your Target shopping with an occasional trip to Costco you were pretty well covered.

jhou2 11y ago
This was my experience too. I enjoyed shopping at my local Canadian Target. Clean aisles, brightly lit. Well priced, good quality. Superior experience to Walmart, Canadian Tire, or Loblaws. Sad when they exited the market.

kyllo 11y ago

Complicating matters was the dummy information entered into the system when SAP was set up. That dummy data was still there, confusing the system, and it had to be expunged Testing in production, good job. Sounds like a typical systems integration fail, IT incompetents trying to hook up SAP, JDA, Manhattan, and NCR with no clue how much time and money it really takes to assemble such a complex systems infrastructure, and getting fleeced by consultants in the process.

serge2k 11y ago
> Testing in production, good job Well, failing to properly set up production is probably more accurate.
charlesism 11y ago
"IT incompetents trying to hook up SAP" The major incentive for SAP is to drive customers to their consultants. It's basically designed to be impossible for anyone else to maintain, or use. Target should have modified their American in-house system instead, where the incentives align with Target running smoothly.

joneholland 11y ago

> SAP, Accenture I'm surprised they opened at all.

charlesism 11y ago
Nonsense, SAP is great. All Target needed to do is G42 their VV6s into a bunch of CC5 subtables. Then they'd have been free to JK8 the W1 data to an F123098 batch, and... abracadabra, Y29 reports for the whole company! Hmm, wait a moment. I think that should be G420, not G42. Let me call my consultant, and I'll get back to you.
- somedangedname 11y ago
  "RPCEWGJ2 is a standard Executable ABAP Report available within your SAP system (depending on your version and release level)...If you would like to see the full code listing simply enter RPCEWGJ2 into the relevant SAP transaction such as SE38 or SE80" Found some documentation on Google - I thought you were joking :(
  - charlesism 11y ago
    I like their use of "simply" in that sentence.
    - chris_wot 11y ago
      What I love about SAP is that the only way to work in it is to be trained inhouse at the cost of literally tens of thousands of dollars. Even Oracle lets you install their database for free to figure out how to use it. You'll never get that chance with SAP. Is it any wonder SAP analyst get paid so much money? I'd say it's not just for their expertise, it's because SAP have sewn up the market.
- purephase 11y ago
  It's amazing that a simple comment on HN reminds me, viscerally, of how I will never, ever write software. So much so, that if I ever find myself contemplating this approach, I'll jump off the nearest building.

DIVx0 11y ago

I live in Minneapolis and Target is a huge presence here amongst just about every type of professional. Everyone knows someone who works(ed) at Target corp and from catching anecdotes from various people it became clear it was no secret that Target Canada was in bad shape from the beginning. This failure not only damaged the careers of many Canadians but also irrevocably damaged the professional lives of people in my town who were laid off. While the job market in Minneapolis is fairly good it became a struggle for some of these newly jobless Target folks to find work in town because of the massive white collar layoffs. Target should have been successful in Canada, all of the problems in this article are linked to over the top pressure and hubris.

skylan_q 11y ago

Most everyone I asked about it's failure said that they just didn't get Canada. It acted as it Canada was a 51st state. The lack of inventory didn't help either. The one closest to me had about 10,000 options for bath mats and bath robes. Everything else was out of stock and the food section had limited selection and higher prices than other nearby stores.

sergers 11y ago

i went to the target a handfull of times in canada. most targets were in old zellers locations... when they opened, they seemed like a bit more modern and cleaner zellers, but still in the same not so high traffic crappy locations. the zellers theme was red, so was target... people were excited about target opening based off experiences crossing the border and shopping at USA Target. the USA stores differed from the Canadian stores. 1)canada target didnt have the same selection/inventory of products. 2)prices were significantly different... even when factoring in the exchange rate, it was still cheaper to shop at USA target locations on a trip across the border. walmart here, atleast in locations near me in canada are far cleaner and newer looking compared to walmart USA. most existing were upgraded to "super centers" and several more locations are opening soon where as in the states they are downsizing and closing locations.

moeedm 11y ago

Walmart. Thats how.

dghughes 11y ago

When Target opened in my town I went in to see what they had for men's clothing and walked out five minutes later. Nothing. There were piles of clothing for (obviously) teen girls, a lot for women and boys but for men there was nothing. I'm in my 40s I have no interest dressing like a 15 year-old. Overall choice for everything else was very limited and the prices were higher than the previous store there (Zellers). Some people who went to Target in the USA said the choices in Canada were very limited and prices were double for the same items. I bet millions were spent on renovating the local store here alone since it was pretty grungy before Target took it over. Worse is when Target took over they were the anchor store and demanded all the little kiosks in the main route of the mall be closed. No sunglasses huts, engraving, tobacco or lottery booths either since rumour was Target is owned/started by a fundamentalist religious family(?). Target put a lot of small stores of of business before they even opened the Target store causing a lot of hurt feelings in a small town.

HillRat 11y ago
This is a bit off-topic, but just to be clear, Target is considered generally politically-progressive for a major, publicly-traded retailer, while the direct descendent of its founder is the current, very liberal, governor of Minnesota. Having said that, I'd say that they were focusing on the wrong methods of creating an appealing retail environment, their other issues being noted.
Grishnakh 11y ago
>since rumour was Target is owned/started by a fundamentalist religious family(?). I think you might be confusing them with Hobby Lobby, the company that went to the US Supreme Court so they could deny contraceptive coverage in their employees' health insurance plans. I won't set foot in a Hobby Lobby now. With them closing the kiosks, that just sounds like your typical dick corporation move, to try to shut down competition and drive up traffic in their store.
- wtbob 11y ago
  > I think you might be confusing them with Hobby Lobby, the company that went to the US Supreme Court so they could deny contraceptive coverage in their employees' health insurance plans. I won't set foot in a Hobby Lobby now. They didn't deny contraceptives; they denied (what they believe to be) abortaficients. Big difference.

hluska 11y ago

I don't think that Target spent enough time researching Canada. Perhaps if they had hired some Canadian executives, the result would have been different. My favourite example has to do with winter hats. In Canada, we call them toques (it is not pronounced 'toke'), yet in Target, all the signage said 'hats'. That sounds really small, but it was my most memorable example of a company that genuinely did not get Canadians. They treated us like Americans and, while Americans are cool, we aren't Americans!!

rasz_pl 11y ago
but, but wouldn't you want to be cool?
sergers 11y ago
tuques are a type of knitted hat usually, not specific to winter. them generalizing a section including tuques as hats is correct, i dont think i have seen a "tuques" section in any canadian store, they would be in the hat section. toques are hardly a canadian thing, and alot of canadians refer to them as beanies. target did not fail cause they werent canadian enough(is anything really canadian?), they failed due to locations, business model, inventory, and technical issues on their backend. if anything they failed because they werent "american" enough, as canadians were expecting a similar experience to USA target shopping
- sandworm101 11y ago
  >> is anything really canadian? Yes. Many things. Watch TV? Vancouver? Nickleback? Or drake? Or pretty much 1/3 of Hollywood? Canada and canadians are very over-represented in US culture. They are just hard to spot. Cruz 2016 -
  - sergers 11y ago
    what i meant was, besides originated/born in canada, what truly makes anything canadian? minus drake who does alot for toronto, what do any entertainment/sports/actor/star from Canada still live in canada or represent themselves as canadian or produce a unique viewpoint that is canadian. canadian content is usually pretty boring on TV. there have been some good original shows, but few. i am born and raised in vancouver, continue to live here, 4th generation of my family to be born in canada.

Naga 11y ago

Every time I read an article about Target, the only people who come out looking good in the end is the Hudson's Bay Company. While I loved Zellers and shopped there on a regular basis, it was worth more for its locations than the actual business. I worked at Zellers briefly in the years leading up to its eventual dismantlement and the question on everyone's mind was really "what is going to happen to all of these stores?" HBC made out like a bandit by seducing Target into buying them in one fell swoop.

alanctgardner3 11y ago
Do you have any insight into when Zeller's was good and what went wrong? HBC seems to have done a much better job turning around The Bay locations (albeit very gradually) and apparently they also own Saks? I'm pretty young and all of my experiences were a combo of dirty, badly stocked stores, products that I didn't care about, bad fluorescent lighting, and employees who didn't give a shit. I also don't really shop at Walmart, but Walmart seems kind of sterile and organized, at least. I honestly did not know why anyone would ever go into a Zeller's - they had clothes and housewares and groceries and stuff, but somebody else seemed to do all of those things much better.
- ayuvar 11y ago
  Zellers (no apostrophe, even though it was started by a guy named Zeller) was able to stay 'on top' of the Canadian department store game for quite some time. They were founded in the 20s, profitable well into the 90s, and had a niche and a format that was poorly understood by existing department stores. Their only real competition was K-Mart. HBC bought them out in the early 80s and then started shovelling more acquisitions on top; Bonimart, Fields, Woodward's. They had enough capital to start fixing things - in the mid to late 80s your parents probably remember "Club Z" and pushing aggressively against their remaining competition to make sure they had the lowest price in town. In the late 90s, just as Walmart was starting to show up in Canada (by buying up the burned-out corpse of Woolworth's) and threaten pretty much every brand under the HBC umbrella, HBC centralized decision making and planning in HBC's Toronto offices and under HBC execs. K-Mart basically collapsed at this time from the same pressure; HBC opened up the purse and bought a lot of old K-Mart locations, intending to convert them. Eatons also died, and their assets were acquired by Sears. I worked at Zellers to put myself through school briefly during this general time period, and I remember hysteria and confusion in all ranks of retail and management staff. Communication with HBC was generally command-and-control with no mechanism to individually fix brand-wide or regional problems. Actual Bay stores in the late 90s were also doing poorly, and it was likely that Zellers was seen as a losing anchor that needed to slash margins further to compete with Walmart. I will miss the chain. I had never really gone in prior to working there, but after working there I had gained enough weird institutional memory to be able to quickly find whatever I was looking for even in Zellers I had never visited before. It is now basically a race in Canada to see if HBC or Sears will pull out first. Neither one of them are doing particularly well. Canada is, in general, not kind to its department stores. http://ottawacitizen.com/business/local-business/canadas-big-box-graveyard-target-joins-illustrious-company http://ottawacitizen.com/business/local-business/canadas-big...

Negative1 11y ago

I was living abroad in Canada at the time and when Target showed up I was super psyched. I was the only one. I think it's easy to blame the horrible and run down locations they took over from Zellers but people still shopped at Walmarts in similar places. In the end, it felt like the same experience we had with Amazon (or Netflix) in Canada; the shell is there with some good products but mostly lacking in everything that makes Target a fun (and addictive) place to shop. The lack of products didn't help but that had more to do with Quebec's super bizarre language police/laws. The irony is Target Canada was at least slightly better than Walmart Canada and many MANY times better than Canadian Tire, a place that was almost always packed with people. It's sad but I don't think Target ever had a chance in Canada.

skywhopper 11y ago

This failure could have been predicted with a simple understanding of Systemantics, one of the precepts of which is: A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over, beginning with a working simple system. https://en.wikipedia.org/wiki/Systemantics https://en.wikipedia.org/wiki/Systemantics

mbesto 11y ago

This is why the leveraged systems integrator consulting model (i.e. Accenture, Deloitte, etc.) is inherently flawed. If only these firms would take a few experience senior people (as opposed to a tiered leveraged or pyramid hierarchy with tons of juniors at high margins) and implement the systems I think they would find a lot less failures.

faitswulff 11y ago

What an incredible debacle. Select quotes regarding their technology decisions: > "While SAP might be considered best in class, it’s an ornery, unforgiving beast. Sobeys introduced a version of SAP in 1996 and abandoned the effort by 2000. (It wasn’t until 2004 that the grocery chain tried again.) Similarly, Loblaws started moving to SAP in 2007 and projected three to five years to get it done. The implementation took two years longer than expected because of unreliable data in the system. Target was again seeking to do the impossible: It was going to set up and run SAP in roughly two years." > "The company wasn’t doing it alone, however, and hired Accenture (which also worked on Loblaws’ integration) as the lead consultant on the project. [...] Accenture, which Target hired as a consultant on SAP, said in a statement: “Accenture completed a successful SAP implementation for Target in Canada. The project was reviewed independently and such review concluded that there is no Accenture connection with the issues you refer to.”" > "The company had purchased a sophisticated forecasting and replenishment system made by a firm called JDA Software, but it wasn’t particularly useful at the outset, requiring years of historical data to actually provide meaningful sales forecasts." > "The depots were hampered by other factors, caused by lingering data problems and the learning curve associated with the new systems. Manhattan, the company’s warehouse software, and SAP weren’t communicating properly." > "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." > "To add even more headaches, the point-of-sale system was malfunctioning. The self-checkouts gave incorrect change. The cash terminals took unusually long to boot up and sometimes froze. Items wouldn’t scan, or the POS returned the incorrect price. Sometimes a transaction would appear to complete, and the customer would leave the store—but the payment never actually went through. The POS package was purchased from an Israeli company called Retalix, which worked closely with Target Canada to address the issues. Progress was maddeningly slow. In 2014, a Retalix team flew to Toronto to see first-hand what Target was dealing with. After touring a store, one of the Retalix executives remarked, “I don’t understand how you’re using this,” apparently baffled the retailer managed to keep going with so many bugs. But Target didn’t have time to find a new vendor and deploy another technology. [...] Unlike SAP, Retalix is not an industry standard, and why Target chose it isn’t entirely clear." > "Like SAP, the replenishment software was brand new to Target, and the company didn’t fully understand how to use it."

faitswulff 11y ago

> 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.” I think this article, and the employee quoted here, works too hard to excuse immoral behavior in their junior business analysts.

SixSigma 11y ago
For me it is the fact that they receive punishment for stock outs, especially in a company in such trouble! Why would you only look at stock amount and not stock turn. I would be concerned at "in stock, sold zero". This whole story is a clusterfuck. "We are going to have a new product, it ships on June 1st, no matter how ready it is" has never been a wise choice.
iSnow 11y ago
The metric is bullshit, those business analysts would get punished even if the delay was not their direct fault. If you go crazy with KPI's, people will find ways to avoid getting bit by them. Show me a metric and I'll show you a game.

Tiktaalik 11y ago

Here's my anecdote. It was late November after Target had been open for a while. I popped in to look for Christmas stuff and I was blown away by the quality. All of their decorations and trees were dramatically better in quality than the usual cheap garbage found at Canadian Tire and Walmart. I was super impressed. I was on my lunch break and I didn't have a lot of time, so I decided I'd come back on a weekend to pick up some things. I show up again next week in the first week of December with my friend, because he was looking to buy an artificial tree, and I was shocked to find out that they were basically sold out of all trees. They still had some decorations but not a lot. I couldn't understand it. How on earth do you run out of Christmas trees in the first week of December? I asked this to a young guy who was working there and he just shook his head in disappointment. He'd clearly been hearing a lot of this. Their logistics were completely messed up.

_rpd 11y ago

People are mentioning Walmart as a competitor, but not Amazon. Is Amazon not competitive in Canada?

SixSigma 11y ago

Sounds like they got played by Walmart too. "Raise you $1.6bn" "Raise you $1.8bn" "I'm out, enjoy Canada"