Target was a special case. They did everything they possibly could do wrong. They announced locations almost 3 years before opening, allowing Walmart to make sure every store was ready with manipulated lower prices and fresh remodels. Walmart pulled their classic US model of lowering all the prices to loss leader level near the competition, offsetting by raising prices at the other stores. They knew that they were so well entrenched in the market that they could leverage their EDLP model in an anticompetitive manner to help Target arrive with a swift "thud," and they were expecting Target to have well run stores like the US-they had no idea that Target would be an operational train wreck when they arrived.Romr123 wrote: ↑March 3rd, 2023, 6:22 pm Also you need to remember that a high percentage of the Canadian customers (along with an even higher percentage of affluent Canadian customers) live within an hour/100 km of the US and are well-disposed to do "big" shopping in the States...this was part of the reason Target struggled; and I'd posit that the Nordstrom customer would just as soon shop cheaper in the US.
Rack stores are in Buffalo, Albany and Syracuse; Portland, ME,
Both Rack and full-line stores in Detroit and Minneapolis; and both Rack and full-line throughout Washington State (plus the heritage of being ground-zero).
Target did not successfully bring over any of their proprietary systems and processes that make their stores work, such as locating overstock, automated pick lists etc. so they were basically running dinosaur stores with plans to finish up the transition later. They bought a generic cash register system instead of their own system. Generic SAP software with data errors bolted to a JDA system that didn't know any sales history because they've never been in Canada before. And they did not get their supply chain model set up for timely replenishment so the stores could not maintain the needed inventory, resulting in wacky situations like blocking out empty aisles and racks with walls of paper towels or toilet paper that would have been appreciated in 2020. Our Canadian relatives were completely disgusted with these stores from opening day on. They looked like a bootleg Target store. Canada wanted Target and they got some weird, funky, out of stock store with red walls and high prices. The employees were frustrated too and Target helped many of their best US employees immigrate to Canada only to abandon them there a short while later when they liquidated. Since the company didn't even install normal Target policies and procedures this was likely much worse than if they just hired new employees as they wouldn't have been expecting to leverage their experience with systems and processes that didn't exist in Canada. Supposedly anger had boiled over well before the stores opened because nothing worked like it was supposed to. I cannot even imagine running a giant store like Target with dinosaur processes of walking around with a notepad and writing down a list of what needs to be stocked then going to find it manually in a Gigantic stockroom. Couple that with broken back end inventory trend monitoring and prediction and you would get what you expect, mountains of the "wrong stuff" and very little of the product needed.
A few good articles about the now textbook case of the failed Target Canada.
https://www.google.com/amp/s/fortune.co ... -fail/amp/
https://www.henricodolfing.com/2019/09/ ... e.html?m=1
https://archive.canadianbusiness.com/th ... et-canada/
On top of that remember many parts of Canada were locked down until this year at the border. If there was ever a chance to succeed it was the last three years as cross border shopping dwindled to zero. And the Canadian dollar has underperformed, making US shopping very expensive. In exchange the US dollar goes very far there. I am fairly certain that Nordstrom followed the same model as many other American retailers and they ship product in from the US then swap the trailer at the border with a Canadian carrier. So exchange rates and possible customs holds/issues affect the potential margin and sales. A weaker Canadian dollar is bad for retailers that operate in this manner. A Canadian dollar right now is worth US 73¢ and has been hovering around there for years. For the US visitor this means your American credit card is like a 27% off coupon so it's a great time to visit there and shop if you see what sounds like a good deal to you. (What scares the heck out of me is that I saw some pictures of grocery pricing up there in CAD and they were cheaper in comparison before even factoring in the exchange rate so their inflation must not be as bad as here).
I never visited a Canadian Nordstrom but I imagine it was not heavily differentiated from the US stores. I have seen surprisingly little differentiation between Seattle and San Diego Nordstrom stores these days yet they are totally different customers. Nordstrom seems to try to sell the same things at every store these days because they assume they are the dictators of fashion trend, a place they may have lived in for decades but the market has moved on in this heavy direct to customer market. Reading other articles about Nordstrom I think they have strayed from their original model that "no two stores are the same" in this post COVID era- my perception recently is their attempts to drive obscenely high percentage of e-commerce as a part of B&M sales drives a move to "sameness" which is clearly unhealthy for their business. They state that now 50% of their sales originate online. I think they're looking for the wrong metric and should be focused on the big three like everyone else: top line sales, comps, and profit. Their current model seems to be driving almost to a place where they wouldn't even need stores and just become a website. Their bizarre "Local" concept which is a 7-Eleven size box with a pickup counter, sales associate and a tailor shop is symbolic of their bizarre vision for the future. I believe that they really don't have any accurate way of understanding where sales truly originate. Their stores are so light on inventory and sizing these days that they force the customer to use the website. Even a decade ago they seemed to have a magical stockroom where they always could pull my size from the back. I wear an unusual size of men's dress shirt and have extreme difficulty in finding my size. Nordstrom had some high quality shirts that were reasonable when you factored in the convenience of immediate availability. Price was about double that of Macy's but quality, comfort, style and fit is in another universe. The shirt lasts much longer than the cheaper Macy's level shirts making it cheaper in reality. Now of course they've pivoted and my size isn't carried in stores and they want me to shop their website. This of course sends me back to shopping all their competition as well and they have missed the sale every time.
We have traveled several parts of the US with our Canadian relatives and they have plenty of money to spend but absolutely zero interest in the clothing sold here. I can't really name any popular Canadian brands (maybe Roots?) but I would imagine that if Nordstrom did stock up all their stores with the right product then they would be in a situation where the product is not nearly as expensive/high end as their overhead and service model requires for profitability.