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U.S. Shopping Boosts Target Canada

Target will be opening its first stores in Canada in less than 12 months. Results from KubasPrimedia's new Major Market Retail Report (MMRR) study for 2012 indicate that a majority of Canadian consumers are interested in the prospect of shopping at Target on home turf. Those who have stopped at Target in the U.S. are especially keen, indicating that there is a positive feedback loop at work.

Shopping for clothesHigh Shopper Interest

The latest MMRR survey, conducted in February-March 2012, shows that 61 per cent of consumers are "very" or "somewhat" interested in shopping at Target once their stores open in Canada in 2013. This is identical to results from a year ago. The main difference between 2011 and 2012 is that the number saying they "never heard of Target" declined, particularly in Montreal.

Target's entry is highly anticipated by Canadian consumers. The 61 per cent expressing a clear interest in shopping at Target is significantly higher than the comparable 50 per cent pre-launch interest level for Wal-Mart back in 1994.

Target Experience

There is considerable experience with shopping at Target in the U.S. Overall, 43 per cent of Canadian consumers surveyed had shopped at a U.S. Target store in the past; 17 per cent had done so in the last year.

There are more Canadians interested in shopping at Target once they open here than the number who have actually experienced a Target store south of the border. Clearly, Target's reputation precedes it. This stems from a combination of word of mouth, media coverage, and Target's own (and not insignificant) public relations efforts in Canada.

Interest in shopping at Target Canada starting in 2013 is closely but not necessarily tied to previous personal experience with Target in the U.S.

Never Shopped

Among those who had heard of Target but had never shopped at one in the U.S., 52 per cent are still "very" or "somewhat" interested in shopping at a Target store once they open in Canada. Relatively more of this interest, however, is of the "somewhat" rather than the "very" variety.

In many ways, this "never shopped" group illustrates the pure power of image, awareness, and reputation. Although they have never set foot in a Target store, many of them very much want to because of what they have heard about it.

Have Shopped

Those who have shopped at a U.S. Target store in the past are much more interested than others in shopping at Target Canada starting in 2013. Ninety per cent of those who shopped at Target U.S. within the last year are "very" or "somewhat interested in shopping Target in Canada (and more are "very" than just "somewhat" interested). Canadian consumers who shopped Target in the U.S. over a year ago appear to recall a positive experience, with 70 per cent "very" or "somewhat" interested in shopping Target Canada.

This is a large group with heightened interest in Target, as 43 per cent of Canadian consumers have shopped Target in the U.S. at some point in the past. And those who made the effort more recently seem exceptionally keen and should be the first in line when the doors open in March 2013.

Positive Feedback Loop

There is no point in debating cause and effect between shopping Target in the U.S. and interest in shopping at Target Canada. The two are correlated, and one begets the other. This forms a positive feedback loop, which is made possible simply by Target doing a good job.

Given high overall interest, even those who have never set foot in a Target store are very likely to try it out once it opens in Canada. These new shoppers may soon find themselves caught in the loop too.

While all indications are that the initial trial will be high in 2013, it is worth noting that this may not be the real test. Once the novelty wears off, and grand opening promotions are exhausted, will Target be able to keep the loop going? Establishing a major new retail operation is a long process, so it may not be until 2018 that we find out.

Ed Strapagiel (ed@kubas.com) is executive vice-president of KubasPrimedia (formerly Kubas Consultants), a firm specializing in retail intelligence and analysis.