A Google history of searches for Target, Sears and Walmart in Canada

Target performing below expectations

There's been plenty in the Canadian media recently about US retailer Target's below expectations performance in Canada. In yet another case of how different US shoppers are to Canadian shoppers, Target Canada President Tony Fisher, speaking about Canadian shoppers, said "there’s a lot of differences versus what we expected" - The Star, 26 Nov 2013. 

From a market analytics perspective, I would hazard that there's no such thing as a typical "Canadian shopper", but that there are rather different buying patterns across Canada whether you're in St John's, Toronto, Saskatchewan or Vancouver. But this is a different topic altogether... 

Target Canada was founded in 2011.

Some reasons for Target's lower than expected performance

According to Target, one of the big differences between American and Canadian shoppers seems to be that US shoppers most often shop for food and healthcare products at Target - making up 40% of sales in the US, while Canadian shoppers don't follow that pattern. Also, while Canadian shoppers seem to have been expecting the discount pricing of Target as found in their cross-border shopping bouts in the US, Target rather aimed to offer competitive local pricing. In other words, basic customer experiences and expectations about pricing were not being met as Target was clearly expecting greater margins to be made in Canada compared to the US. 

Interestingly, it took 9 years after the first rumours emerged about Target entering the Canadian market for it to actually do so. Metro, July 26 2012

What does the data indicate?

Given the above introduction, let's look at how Canadians have been using the internet to find information on some of some of their favourite US headquartered retailers since 2004. The year 2004 is the date of the start of the first rumours about Target entering the Canadian market, it was said, via the the acquisition of Zeller's, a Hudson's Bay Company retail brand that has all but disappeared now. Canadian retailer Canadian Tire has been included as a point of contrast for this simple study. 

Note that US or otherwise global search patterns will be different to the Canadian search pattern.

Figure 1: The volumes of Canadian Google searches for selected retailers on Google from 2004 to Present

1. Walmart has Christmas season sorted

From Figure 1, between 2004 and 2008, US retail giant Walmart was playing second fiddle from the point of view of Canadian search interest, to both Canadian Tire and to another US retail giant, Sears, which has since fallen on hard times in Canada. Also from the graph, Walmart has since entrenched itself as top-of-mind in Canada, outranking all the searches for all the other retailers in this image, especially for the all important Christmas sales period (illustrated by the search peaks). It's clear that Canadian Tire has a second search peak unique among the retailers in this case, between May and July.

Also from Figure 1, it's clear that Target are properly gearing up for the 2013 Christmas retail season in parallel to the other major retailers in this study. 

2. Target vs Walmart. Or is it just Walmart?

There's also an interesting relationship between Target and Walmart as far as Canadian searches are concerned in that those searching for Target via Google are most likely to search for Walmart as well. Clearly Walmart has years of local experience plus this particular insight in its favour when stocking up and pricing for the Christmas season. However, the interest is not reciprocated by those searching for Walmart, who search for Canadian Tire, Future Shop and Sears instead of Target. 

Clearly Walmart is top-of-mind for Target Shoppers, but Target is not top-of-mind for Walmart shoppers. So show us your marketing strategy Target! 

3. From a mindshare perspective, Sears has been in decline in Canada since 2009
Another interesting aspect of Figure 1 is that from the Canadian public's perspective, Sears has been in decline since 2009, having been overtaken in terms of digital mindshare by all of Walmart, Canadian Tire, and more recently Costco over the last ten years. This is reflected in the financial performance of the retailer during this period. It's best that retailers keep a beady eye on this type of information as it can be a significant leading indicator of retail financial performance. In terms of Sears' current status in Canada, it is rumoured that it is on the hunt to sell its Canadian operation - Financial Post, 25 Nov 2013.

4. Costco seems on the up-and-up

Public interest in Costco has been growing since 2011 after a long period of apparent indifference relative to Walmart and Sears.

Closing

Ultimately, from Target's perspective, it should be heartening that digital interest in Target continues to accelerate. Maybe it's only a matter of time before Target learns lessons similar to what Walmart did all those years ago and becomes another successful US company in Canada. The question is whether there's enough time.

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Analysis by REData

From a corporate perspective, this could be considered a big data study given the analysis of data external to the company, at scale, from a Google perspective.