There are many things a loyalty-marketing platform can resolve for a brand, but as Target recently demonstrated with its expensive failure in Canada, it cannot rebuild a weak foundation.
Much has been written about the pullout; it is in many ways a case study in marketing 101. Canada represented Target’s first international market, yet the value-priced merchant approached the region as if it had owned it, barreling across the country with 124 stores in roughly a year. But the physical expansion was less of an issue than Target’s execution against the core brand proposition Canadians had come to expect from either their own shopping experiences in the U.S. or from Target’s strong reputation.
Target launched with the tagline: “Expect More. Pay Less.” But the unique private-label offerings brought to market by signature designers – one of the chain’s key draws – seemed to stall in Canada. Combine that with some poor locations, supply chain issues and higher prices than expected, and we have a foundational value problem.
So it is no surprise that while Target operated its REDcard loyalty program in Canada, it was not effective in supporting an already challenging situation. At LoyaltyOne, we have always said a great loyalty initiative will rarely make up for a struggling brand that doesn’t get the basics right. And despite a population that is very receptive to loyalty programs, I am left uncertain as to whether the program ever gained traction considering the stores failed to be relevant in the first place.
However, now that Target has made its decision to abandon the market, perhaps the other retailers in Canada can take a page from the Loyalty Marketers handbook and take advantage of the data assets they have built up over the years.
1. Analyze your data to figure out which customers may have changed their shopping patterns upon the launch of Target.
2. Determine what they were purchasing elsewhere. What categories do you need to focus on in the future?
3. Target the customers with engaging offers that are customized to their existing and potential buying behaviors. Don’t just send them stuff they are not buying, but instead embed these offers within a series of promotions that reflect what the customer is buying today. This will capture more attention and enrich engagement.
4. Look at what this can tell you about the future. Do you need to shore up your offerings in specific categories? Are there additional ways to deepen engagement with your customers by building a new value proposition that changes the way they think about your brand?
By taking these four steps, marketers can reinforce the foundations of their brands and, more importantly, insulate them from the threat of future “Targets” yet to come.
