TORONTO - Target Canada is pledging to donate $1 million to local charities through its Facebook page this holiday season as it moves to establish itself as a good neighbour ahead of next year's arrival on Canadian soil.
The campaign, running Tuesday until Dec. 9, asks Facebook users to visit its page and click to donate $100 of Target's money to one of six local charities it has selected after months of market research on the Canadian philanthropy scene.
"It's just one of the ways we will try and engage our future guests," said Derek Jenkins, senior vice-president of external relations at Target Canada.
"Being a good neighbour doesn't mean you just come in and do business."
The U.S. retail giant, set to open its first Canadian locations in the spring of 2013, plans to donate five per cent of its profits to local communities and the campaign will help it determine some of Canadians' favourite causes.
"It just shows our commitment to making sure we're involved in the community, but also the other benefit we get is we get to find out what's really important to our Canadian guests," Jenkins said.
The information will help Target to draft its giving strategy for Canada, along with the research it has already been doing, which helped to determine the areas of concentration for the current campaign — exercise, nutrition, arts and education.
Jenkins said the company is looking to tailor its corporate social responsibility program specifically to the Canadian market, and has learned that Canadians are more focused on well-being, than education, for instance.
"It just seems education isn't as much as a concern as accessibility to food, and nutrition and well-being" in Canada, he said.
Participating partners in the program include ArtsSmarts, ArtStarts, various YMCAs in Canada, Food Banks Canada, First Book Canada and Pathways to Education.
Users can select not only the charity of their choice, but the province to which they want the money directed and can return to donate once every 24 hours.
Target will continue the campaign until the $1 million is donated, or just before midnight on Dec. 9, whichever comes first.
Gena Rotstein, a philanthropy adviser at Dexterity Consulting, said it's becoming more common for multinational companies to launch corporate social responsibility initiatives prior to entering a new market to build goodwill.
"Doing good in the community is good for business," she said,
Crowd-sourced funding programs are also innovative ways to drive people to companies' social media sites and to generate buzz, she added.
"The question then becomes from a company's perspective: is how are they managing their brand as it aligns with the charities that people are clicking on and voting for?" Rotstein said.
"It will be interesting to see what happens as Target learns about the community more. What charities do they choose to work with and are they actually putting their money into solving whatever the critical issues are that target has identified or are they just using it for more eyeballs?"
Target is preparing to move into Canada, its first expansion outside the U.S., opening the first of between 125 and 135 stores in March and April at locations once owned by Canadian retailer Zellers.
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The Booming Canadian Dollar
The Canadian dollar has risen from around 62 cents U.S. in 2002 to around $1.03 U.S. at present. What this means is that, from the perspective of international retailers, we're spending a lot more in stores. Colliers Canada reports that <a href="http://www.collierscanada.com/en/News/2012/Canada-Still-Magnet-for-Foreign-Retail" target="_hplink">Canadian shopping malls brought in 50 per cent more in sales, per square foot, than their U.S. counterparts</a> in 2011. While U.S. malls earned $400 U.S. in revenue per square foot, at Canadian malls it was around $600 U.S.. That's a powerful magnet for U.S. retailers looking to expand.
Our Existing Stores Are Disappearing
Remember Zellers? How about Eaton's, or <a href="http://en.wikipedia.org/wiki/F._W._Woolworth_Company" target="_hplink">Woolworth's</a> or <a href="http://en.wikipedia.org/wiki/Simpsons_(department_store)" target="_hplink">Simpsons</a>? <a href="http://en.wikipedia.org/wiki/A%26A_Records" target="_hplink">A&A Records</a>, anyone? Those are just a few of the retail names that have disappeared or are disappearing from Canada's street fronts and malls. With traditional retailers fading, U.S. retailers are seeing opportunity left and right. They are also seeing vacant space they can easily convert to their own stores, as <a href="http://www.huffingtonpost.ca/2012/08/22/target-canada-zellers-protest_n_1822223.html" target="_hplink">Target Canada is doing with Zellers locations</a> and <a href="http://www.huffingtonpost.ca/2012/09/11/nordstrom-canada_n_1874734.html" target="_hplink">Nordstrom Canada is doing with Sears stores</a>.
Our Retail Sector Is Growing Fast
Growth in Canada's retail sector was <a href="http://www.nasdaq.com/article/the-promise-of-the-canadian-retail-market-20120914-00599" target="_hplink">34 per cent faster than it was in the U.S. between 2004 and 2008</a>, according to data from the Retail Council of Canada -- and that's before the financial crisis sank the U.S. into an economic no-man's-land. The Council's data also shows that retail grew 96 per cent faster than the Canadian economy as a whole during that period.
There Are Too Many Stores In The U.S., And We Have Room For Growth
In the U.S., retail supports one-quarter of all jobs and accounts for about 18 per cent of the country's economic activity. By comparison, Canadian retail supports only about one-eighth of all jobs in the country, and retail accounts for just more than six per cent of all economic activity, <a href="http://www.nasdaq.com/article/the-promise-of-the-canadian-retail-market-20120914-00599" target="_hplink">according to a report at Nasdaq.com</a>. This would suggest that the U.S.'s retail market is saturated, while there is plenty of potential growth in Canada.
More Of Us Have Disposable Income
The U.S.'s persistently high unemployment rate in recent years has left many Americans with little cash for buying anything beyond the basics. Data from WSL/Strategic Retail shows that <a href="http://www.businesswire.com/news/home/20120914005044/en/Canada-Land-Retail-Opportunity-WSLStrategic-Retail" target="_hplink">only about 50 per cent of Americans have disposable income</a>, but the same is true for 64 per cent of Canadians.
Less Competition From Online Shopping
Canadians often complain that our options for online shopping are more limited than in the U.S., and that seems to show in our shopping habits. Research on women's shopping habits finds that <a href="http://www.businesswire.com/news/home/20120914005044/en/Canada-Land-Retail-Opportunity-WSLStrategic-Retail" target="_hplink">only about half of Canadian women shop online</a>, compared to 75 per cent of American women. That means more opportunity for brick-and-mortar stores planning to move into Canada.
We're Not As Big On Bargain-Hunting
The <a href="http://www.businesswire.com/news/home/20120914005044/en/Canada-Land-Retail-Opportunity-WSLStrategic-Retail" target="_hplink">same study of female shoppers</a> found that, while 68 per cent of American women use coupons when shopping, only 55 per cent of Canadian women do. Half of Canadian women look online for coupon opportunities, compared to 61 per cent of Americans, and 57 per cent of Canadian women pick up in-store circulars, while 71 per cent do so in the U.S. This lack of hunger for bargains translates into bigger profit margins for retailers.