It's finally here. After more than two years of giddy anticipation among shoppers and anguished hand-wringing among domestic retailers – both of which began virtually the minute Target announced it was bringing its chic-but-cheap retail mojo to Canada – the Minneapolis-based retailer started opening the doors of select stores across the country in early March.
Tony Fisher, a 38-year-old former baseball player, is leading Target's charge here in Canada – which, at 124 stores coast to coast in 2013, is the largest Canadian retail invasion ever (nudging Walmart's 122-store offensive in 1994). Fisher sat down with Marina Strauss for an exclusive interview about leading Bullseye into unknown territory.
It's unprecedented for a retailer to come to Canada and open so many stores all at once and to fully renovate them. Not only that, but there are very high expectations. So how are you going to manage that?
You know, we spent a lot of time on what we called a Listening and Learning tour, starting in early 2011. We had a lot of insight from Canadians already-we had over 30,000 who held a REDcard [see footnote 1] and over three million Canadians who had shopped at Target within the last year. But we wanted to talk to other people who would be our future guests. I remember being in Halifax [2] and learning about the explosion. Do you know about that? It's fascinating. I mean, it emptied the entire harbour.
Yes, and that's why they...
You go around the country and you come to realize that there are so many differences. But it gave us great insight into what the expectations are and, to sum it up, the good news is that the expectations are very clear and consistent. And the guests want that same Target brand experience that they're used to seeing in the United States. Canadians' biggest fear,Marina, is that we're going to change something for Canada. Don't make Target Lite. So we are deeply committed to making sure we replicate that brand experience, which is about bright, clean stores, wide aisles, trend-right merchandise [3], great guest service, short checkout lines and incredible value. All these things that are part of our brand,we want to bring to Canada, and the expectations are quite high.
There are also high expectations around low prices. Will they be the same prices as in the U.S. or will they be comparable to other retailers in Canada?
We're very keenly focused on price. We've talked a lot about the fact that we are going to be incredibly competitive within the Canadian marketplace.
We're about to see a study come out on pricing in Canada versus the U.S.
I don't think it's going to make anybody feel better, because there's the reality of the vast geography that is Canada and increased fuel prices and different wage rates [4]. There's the reality of just the lack of economies of scale across a country this size, with a population that's 10% of what it is in the U.S. So when we pull that together, we've built our business model to be incredibly competitive with the lowest-price leaders in Canada. On top of that, you have the 5% rewards we're going to be offering.
The Globe just commissioned a survey comparing prices on a basket of items at Walmart here and in the U.S., and they were almost 23% higher in Canada. How will consumers respond to that, do you think?
I think we're going to be very clear with our value proposition. Walmart has a different brand strategy than we do. "Save Money. Live Better"-they're deeply focused on that. We talk about "Expect More. Pay Less." So yes, you pay less, but it's also about the "expect more" side. You can expect a brighter store, a cleaner store, wide aisles, in-stock merchandise, trend-right merchandise. We just announced a design partnership with Prabal Gurung [5]. We've also announced a partnership with Fondation de la mode de Montréal and the Toronto Fashion Incubator. You can't get that anywhere else. We're bringing that focus on design and innovation to Canada.
What have you found on the labour side here in Canada?
Wages can be anywhere from 10% higher to well into the teens, depending on the province. For example, Alberta has a 4.5% unemployment rate. You have people with varied levels of education making six-figure salaries in the oil fields, and we want to tell them the story about a retail career at Target. I remember being in Edmonton, where people weren't even familiar with the Bullseye. And it was great for us to realize that, because it meant that we had more work to do, not only educating people on our retail brand, but also our employment brand. What does it mean [6] to work at Target?
Were there other parts of Canada where the brand was not familiar?
Brand recognition [7] in Quebec was about 20 points lower, both two years ago and today. So as of today in Quebec, we'rein the low 70s. We started out in the low 50s. Quebec has such a unique culture-the smaller grocery store trips, the smaller, boutique-type stores. We did a lot of work in Quebec. We've never had to translate our brand into a different language before, ever in the history of our company. We don't say "Expect More. Pay Less" in Quebec. It's "Trouvez Mieux. Payez Moins." We've never had to do that before.
We also use the term "guest" at Target, because we think it's an honour to have you in our stores. And so I thought, okay, what is guest in French [8]? Well, there are all sorts of different words-invité, visiteur, client. Invité was the most comparable to guest, so what do we think about invité? Well, boy, that's a really personal word to Quebeckers; I mean,that's like you inviting me over for a personal dinner. So I thought, okay, gosh, maybe that doesn't make sense.
So what was the resolution?
We are going with client. I struggled with client, because it didn't sound intimate to me. It sounds like there's not that emotional connection, which is what "guest" demonstrates to me on the English side. Quebec was such a big one for us because people have gone into Quebec and they've failed [9]. We were deeply committed to not letting that happen and, as part of that, we had to make sure that we took advice from the right people and the right partners.
What about elsewhere in the country?
When we went out to Vancouver, where there's a big Asian demographic, one of the things we heard was, "Just make sure you don't have everything for tiny little people." Because the size demographic is different-there are a lot more extra-smalls, rather than a balance between small, medium, large and extra-large.
So some retailers are going too far?
Yes, they're going too far. We can't just swing the pendulum too far and think, okay, we've solved it for Vancouver. And obviously the climate is different in Vancouver-it rains [10] a lot, so you need rain boots and rain gear and umbrellas. You don't need the giant winter parkas, but you might need insulated rain jackets. And then you come to the Prairie provinces, and it's just bitterly cold. One of my son's friends from hockey moved to Fort McMurray.I used to think Edmonton was the North Pole. You know where [11] Fort McMurray is?
So your kids play hockey?
We are deeply, deeply invested in that game, I tell you. My two boys play rep and house. Being American, I didn't know what that meant before I came here in August of 2011. Hockey trials started three weeks after we got here. I didn't know what the difference was between rep and house. They had to kind of educate us.
How often do you get to the rink?
I'll tell you, every single game. I don't miss them, ever. The only exception to that is if I'm travelling to Minneapolis. I'm not going to miss our board of directors meeting for a hockey game, even though that is, without question, my number one priority.
What level are they at?
Triple A and double A.
Wow, you're a serious family.
Then they both play triple A baseball. So, here we are, like, okay, we love them playing sports, but it is an absolute lifestyle choice. We've cancelled vacations. We didn't go skiing last year because the kids were in the playoffs. We're at the rink 10 or 12 times a week. I grew up in Minnesota. So did my wife. Our kids were born there, and for us to come here and not know a soul in Oakville, which is a great community, and to have the kids immediately get invested into these sports and make the teams they wanted to make and all of a sudden they have 16 best friends...I mean, they love it here. They absolutely love it, and for me, it's like okay, this is home. This feels right.
What time do you get in to the office?
I'm usually in between 6:30 and 7. Now, if I have a late hockey game-because I still play hockey myself, twice a week-I get in later, maybe 8 o'clock.
Oh, wow, you're busy.
Then I'm home for dinner every night by 6:15 or 6:30. We didn't have hockey last night, and my oldest said, "I love this"-the fact that we have family dinners and we all five sit around and talk about what they learned, which somehow is always the hardest question for a kid to answer. When I see my kids react that way and at that age, oh my God, how could I not be home for dinner every night?
And if I'm not home for dinner, the only other place I'd be is at the hockey rink or the baseball field. It doesn't mean that you shorten your time investment in the job, but maybe it means that you're in the office earlier in the morning.
You were a baseball player, weren't you?
I was, in a former life. I played in the Texas Rangers [12] organization. So I was drafted out of my third year of university, and I played for three seasons. And after my third season, it was kind of my life crossroads-do I play baseball for the rest of my life, you know, until I'm in the big leagues or bust, or do I get a real job? And I probably sent my resumé to 50different companies. I got an offer from Target, because I interned here in university. I started as an entry-level business analyst and I haven't looked back since.
So tell me a tip about Target that you got at the hockey rink.
Well, first it was, don't change a thing. And I always get, are you going to have Shaun White [13], are you going to have C9, are you going to have Archer Farms potato chips? They will go item by item and make me swear in blood that I'm going to have them in the store. And of course I turn into kind of media mode and say, well, we're going to replicate that brand experience. But it's amazing how passionate people are. And they want to know that we're going to be competitive, and that's an easy one to answer.
So how much higher will prices be?
It varies. To be perfectly honest...
On average.
Because we match the retail marketplace, we are doing competitive-pricing shopping all the way up until the first day we open stores. And so our pricing differential could be different in six weeks or two months from now.
You'll be doing it once a week?
Absolutely. Yes, on a subset of items. For example, you might com-shop an item in one store that might change in price and you can make an assumption across a marketplace. Or you might com-shop items within Toronto that might be different in Winnipeg or Vancouver.
Right, because in outlying regions, things are always priced higher.
Yes, so one of the things we've found is that, I would say across the country, there's not a huge disparity. We haven't found significant double-digit variations across the general basket across the country, which is very different in the U.S.
What was one of the biggest surprises for you when you moved here in August, 2011?
I wanted to be a consumer here, so I could say exactly what it is like to shop at Loblaws or Sobeys or Metro or Fortinos on the grocery side, what it's like to go to Canadian Tire or Home Depot, or to shop at Walmart or Shoppers Drug Mart. One of the biggest surprises early on was just how many different places I had to go to get what I wanted. There was a lack of one-stop shopping. Now, Walmart exists, but it's the consumers' mentality. It was just kind of part of the norm.
So that's a challenge-to get people into that new habit.
Absolutely. We want to convert our customers to guests. We're not going to win if people are coming to our store one time to see what all the fuss is about and then going back to their routine. We have to make Target part of people's routines.
Analytics is your specialty. What have you learned about the customer base and what you need to do?
We have a deep investment in what we call guest insights , [14] and that gets translated into business intelligence. We can see shopping patterns, so where a guest will come into our store and buy a certain brand of deodorant that isn't one of our top sellers. But they're also buying toys, apparel, food. Then if you make assortment decision changes-maybe you take out your worst-performing deodorant, which might be that deodorant-what you've just done is taken that guest [15] completely out of your store, because they are deeply committed to this one particular brand of deodorant, and if Target doesn't have it, they don't come to Target. And so these items might be low sellers, but they're actually trip drivers for our guests.
What will be some of those key items in Canada, based on your research?
I would say food's going to be a very passionate topic for our consumers here. One of the things that we found is that the Canadian palate is different. Things are sweeter in Canada. Ice cream is sweeter, ketchup [16] is sweeter. So you'll have a Hershey's chocolate bar that looks like the exact same Hershey's chocolate bar you bought in Buffalo versus what you bought in Toronto, and they will taste different.