Blogs & Comment

Targeting the Community

For the first time, the battle to capture a large piece of the Canadian mass retail marketplace will be fought on more than price, quality, selection and service. Today, a corporation’s social purpose is as important as its business fundamentals and Target’sperformance in this area is a cut above its competitors in Canada.
Leveraging a corporation’s social purpose hinges on authenticity. This is where Target really has the goods. Since 1946, Target has given 5% of pretax profits to good causes including education, the arts, social services and volunteerism. Its a tradition started by the company’s founder, George D. Dayton, and has been carried out ever since. Thousands of Target team members donate and volunteer generously, and Target guests support its community initiatives with every purchase. The company also recently announced a new pledge of $500 million by the end of 2015 to support education and help kids learn to read.
Integrating social purpose programs into operations is also an area where Target has excelled. Take Charge of Education, Target’s flagship community program, is a school fundraising initiative that offers families, teachers and community members an easy way to designate an eligible K-12 school of their choice nationwide and have the company donate an amount equal to one percent of their REDcard Visa or Check Card purchases. (In addition, Target donates half a percent of all Target Visa Credit Card purchases made everywhere else Visa credit cards are accepted.)
Canadian retailers understand sustainability. The idea that reducing environmental impact also reduces cost and can support brand-building has been embraced by mass retailers in all categories. These same retailers, however, have neither understood the value of their company’s social purpose nor deployed their social programs as effectively as their environmental initiatives.
In the context of Target’s entry into the Canada, here are the questions that retailers need to ask themselves:

  • What is our social purpose as a corporation operating in Canada?
  • How can we apply the business discipline and creativity we have as merchandisers to better deploy our social purpose programs where they will have the biggest impact? (in the aisles, embedded in credit card and rewards programs, and in existing consumer-facing communications)
  • How can we involve our suppliers in a way that adds value for us and for them?
  • How can we leverage our communications as needed to better reach and influence consumers?
  • How can we move quickly without being seen as making inauthentic kneejerk reactions to Target’s entry into the Canadian marketplace?
  • How can we measure success in an area that antithetical to a transaction-based business model?

Over the next two or three years, there will be 100 – 150 Target stores across Canada. This will be a wake up call for Target’s direct competitors in the cheap-chic niche including Sears Canada, Walmart Canada, Loblaw, Reitmans (Canada)and Old Navy, as well as for other discounters, and apparel and home goods specialists. It is also an opportunity for retailers to put a Canadian flavour on the social purpose of business in this country.
Target shouldn’t be the only mass retailer that puts the community at the centre of their bullseye.