young people

Young people are blocking the success of American retail expansion in Canada

If young people don’t engage with your brand as much as you like, it foreshadows tough times ahead. Your ability to increase sales and recruit staff depends on attracting a younger demographic. In this PACT post, we explain how to reach young people on their terms and identify the major American retail brands that missed the mark.

For the sake of clarity, we define “young people” as anyone under the age of 34, that fall within two
generational groups, Gen Ys (Millennials) and Gen Zs.


Distinct generations

The arrival of the web in the 90’s unlocked a new information age, setting the stage for the “digital-first” generations that followed. These “extremely online” generations vastly prefer using their smartphone to watching TV; reading blogs and product reviews, consuming news in their feed or on Twitter; streaming music and video over listening to radio; Netflix and chill over going to the movies; and buying online.

18-to-34-year-olds may not earn much now, but where will this giant consumer cohort be in five, 10, and 15 years? Your future depends on them!

Stuck in a brand comfort zone

Brands have a choice to make. Some refuse to adapt their operations to appeal to young audiences, even as their customer base retires. As consumers retire, they tend to purchase less of the same products they spent their lifetime enjoying. Brands rely too much on defensive marketing, focusing on existing customers and still shop in stores. Marketing for growth requires brands to focus on attracting new segments, like a young demographic. However, there’s risk in chasing a new target audience. Attached at the hip to their aging and shrinking demographic, many retail brands continue to see diminishing returns at their own peril.

Some American retailers got it wrong

Instead of expanding their stores into Canada, Target and Nordstrom should have invested in a richer, bilingual digital shopping experience. Embracing a different approach like creating great consumer content and deploying social media promotions in English and French, those retailers could have scored big. One easy promotional idea comes to mind; try reducing shipping rates for Canadian consumers buying online. At the very least, innovative thinking would have primed Canadian shoppers for the arrival of their stores down the road.

For the vast amounts they spent, Target and Nordstrom could be selling their products in the metaverse, like Nikecreating their own experience to attract young people. Targetland or Nordstromverse 
would have cost them a fraction of what they spent

Paying the price for a lack of digital leadership

So, what went wrong? Even smart people make mistakes. Why do brands like these insist on doubling-down on their old operations and formats instead of embracing new ones? Part of their issues reside internally. Target failed because Canadians didn’t find the deals Americans get. Nordstrom, on the other hand, committed to the same approach, but also was doomed by the pandemic. Consumers switched their shopping habits drastically in 2020. Had these retailers advanced a digital-first strategy with confidence, Canadians may have embraced them. Instead, they deferred to their old ways of
doing things that once worked rather than innovating.

The world’s most successful brands continually redefine the experiences they offer to keep up with rapidly changing consumer habits. Meanwhile, brands that force old formats onto consumers struggle and fail.

Hindsight is twenty/twenty 

Had these retailers recruited young digital leaders before expanding north of the border, they would likely have proposed different options to their respective leadership teams. Moreover, had they initiated a cultural transformation prior to expansion, they would have opened distribution centres in Canada instead of
retail stores. Modernizing organizations requires young people in leadership positions. Unfortunately, laggards in leadership roles fear promoting innovative digital leaders. Traditional work cultures led by professionals who resent modern practices 
like hybrid work models and diversity–equality–inclusivity policies fail to recognize the path to future success.

To effectively transform these lagging corporate cultures requires changes in leadership, the development and
communication of a progressive vision, and the adoption of new technology.


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