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Creating Lasting Relationships is the Key to Brand Success

Successful branding is all about creating strong and lasting relationships.  In a volatile industry like retail where the ground can move every day, effective branding is critical.  The quality of the customer relationship must be the one constant.  Creating relationships is what drives sales; and ultimately, a retailer’s fate.  We saw what happened when Target entered Canada – it didn’t have existing relationships in Canada and it failed to build positive new relationships with customers, which quickly lead to the company’s Canadian demise.

The Canadian retail market is unique, competitive, and constantly evolving.  In order to succeed, retailers entering Canada must know how to shape their products and services to fit the Canadian market; and most importantly, they must know how to build and maintain strong relationships with their Canadian customers.

Adding to the already competitive Canadian retail market is the fact that buying patterns are significantly changing.  One of the biggest trends impacting the retail industry is the drastic rise and popularity of e-commerce, which has resulted in many consumers steering away from in-store purchases.  This makes it even harder to meet and engage customers on any kind of a relationship level… transactional level yes, but not any deeper than that.

According to a recent article written by Walter Loeb in Forbes’ magazine, he cautions that in order for retailers to survive in 2016, they must restructure their organizations: “a new industry culture needs to emerge; one that empowers associates by creating a team spirit that will be rewarding for customers, employees, and management.”  The question is: are retailers in Canada ready to restructure and change their culture? And, will new retailers entering Canada have a structure adaptive enough to satisfy and sway Canadian consumers?

Just recently, Japanese clothing retailer Uniqlo announced that it will soon be opening two flagship stores in Toronto in the fall (one at the Eaton Centre and the other at Yorkdale Shopping Centre) with plans to expand the brand to Vancouver and other Canadian cities.  The international retailer sells fashionable and affordable clothing and accessories for all genders and ages, free of logos.

With a global presence that spans 1,500 stores in Asia, Europe, Australia, and the U.S., it will be interesting to see how Uniqlo fares in Canada.  How will it create positive and enduring relationships with Canadian consumers?

Uniqlo’s CEO, Larry Meyer, believes the brand will be successful where Target was not since they it is a vastly different retailer entering the market on a much smaller scale.  Meyer says that his past has shown that Canadians are “open people and very willing to welcome new brands.”  He believes Uniqlo has unique products and that the company is not just another mass merchandiser of branded goods: “our products are our brand,” he states.

Meyer is correct in that Canadians are very open and willing to welcome new brands.  There have been several international retail brands that have made the successful and effective transition to the Canadian market.  But this notion should be treated with caution, as this is exactly what Target was thinking when it decided to enter Canada.  There was so much hype and excitement for Target’s Canadian arrival, but the retailer failed to live up to expectations and build positive relationships with Canadian customers.  It’s one thing to have a strong brand identity (like Target), but it’s absolutely critical to satisfy consumers and build strong relationships with them.  The best way to do this is by understanding consumers’ unmet needs and addressing them effectively – whether they come in the form of prices, the shopping experience, merchandise, or unique product offerings.

The Uniqlo brand may well be a great addition to the Canadian retail market, but its long-term success will depend on the brand’s ability to create, grow and sustain positive relationships with its Canadian customers.

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Did Target ever really come to Canada? Not according to their Mission Statement.

Leases in less than optimum locations, a weak supply chain and runaway ambition in opening 133 stores may have all ganged up to doom Target in Canada.  But, there’s one corporate failure that intrigues me even more.  Target ignored its own mission statement. ‘Our mission is to make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling our Expect More. Pay Less.® brand promise.’

Target must have known, before coming to Canada, that it wouldn’t be able to offer U.S. price points or U.S. selection.  It also must have known that those were the two things Canadians loved about shopping at Target south of the border.  So, here’s the $5.4 billion question… if you can’t get those two fundamental promises right, why bother coming to Canada at all?  The cheap chic appeal of Target didn’t travel well.

Maybe more than anything else, Target’s ungracious exit from Canada shines an uncomfortably bright light on the whole exercise of creating mission statements in the first place.  I think for many companies, mission statements and the accompanying brand promise are just corporate accessories that they feel are a mandatory part of a website or annual report.  Leaders and managers only seem to pay attention to them when it suits them and ignore them too often and too hastily when a shiny new opportunity arises. The result, yet another announcement in the media of a shuttered company. In this case, one that was ill-fated from the start by it’s seemingly altered promise of expect more, pay more and receive less, in Canada.

At Spyder Works, our brand promise is encapsulated in Building Business by Design®. Design, of course, referring to the thought and intention behind the creation of a new idea or direction. Whenever we are creating something for a client, we test it against that statement. Ensuring that whatever we create is single-mindedly focused on our client’s own promise to their customers.

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