It's Target goes global — Take Two.
After picking itself up from a disaster in Canada, the Minneapolis-based retailer is once again testing the international waters. Only this time, it's not doing anything as risky or costly as building new stores. For now, Target is embarking on a much cheaper and faster expansion through online channels.
"We're not going to open up 100-some stores in a market to go after the next international opportunity," Casey Carl, Target's chief innovation officer, told the Star Tribune in a recent interview. "But we will step into it through digital first … We'll walk into it smartly."
And that, he said, will lead to a more robust international presence and strategy for Target down the road.
Target knows there's an appetite for its cheap-chic apparel, housewares, and health and beauty products outside of the United States. The company says it gets more than 50 million visits to Target.com every year from people in other countries. But until recently, they haven't been able to purchase items from Target online.
In November 2014, the company began a pilot with eBay's global shipping program to make about 200,000 products it has on that portal available to shoppers in the United Kingdom. Interestingly, one of the hot sellers was T-shirts from the TV show "Breaking Bad."
In June, Target began expanding that test to the 64 countries in eBay's program.
"Already we've learned that China loves our Legos and that guests in Europe are willing to pay much higher shipping fees for hard-to-find products," Carl said at Target's annual employee meeting in September.
In addition, Target has begun quietly testing an international website — intl.target.com — in partnership with the firm Borderfree, which helps a number of U.S.-based retailers such as Nordstrom, Nine West, and J. Crew with the logistics of international shipping.
The site has already generated mixed reviews. When Canadians got wind of it earlier this week, some complained that the steep duties and shipping fees can often be more than the actual price of a product.
But Brian LaBelle, a self-professed "comic book geek" and collector of action figures who lives in Edmonton, was excited to hear about Target's global shipping program through eBay and its international website.
"The only other option so far has been to buy from third-party resellers who typically jack up the price," he said, adding that they can sometimes ask for twice the original selling price at Target.
Even when Target had stores in Canada, LaBelle often went to eBay to find exclusive collectibles only sold in Target since those products weren't often sold in the Canadian stores, he said.
Earlier this year, Target shuttered its 133 stores in Canada after racking up billions in losses in less than two years of operation. It was an embarrassing outcome to the company's first international expansion.
Ironically, Target didn't have a functioning e-commerce site in Canada when it had stores there. It's only now that Target has shuttered those stores that Canadians now have a way to buy from Target online.
A Target spokesman didn't have any more details to share about the international website, saying that it is just a test right now and that more details will be forthcoming.
Selling internationally online offers U.S. retailers access to new markets, but it's not easy. They have to navigate a tricky terrain of customs policies, duties and taxes for each country. There are also the complexities of different currencies and figuring out returns.
A number of companies such as FedEx, UPS and eBay have been enhancing their services to make cross-border shopping more seamless.
EBay launched its global shipping program a couple of years ago to assist its sellers, many of whom were hesitant to wade into the international marketplace.
"It's a hassle, it's complex and it's expensive," said Manish Joneja, director of eBay's global shipping program.
So eBay does a lot of the work, including figuring out which items are exportable and calculating shipping costs and related duties and taxes. Sellers then send items to eBays' shipping center in Kentucky and it takes care of the rest, including handling such problems as lost or damaged items.
While Joneja would not disclose other retailers eBay is working with aside from Target, he said it's a growing list of hundreds. So much so that today about a quarter of eBay's listings are now available to buyers abroad and 1 in 5 transactions cross international lines.
Macy's began shipping internationally in June 2011 through a partnership with Borderfree and now can ship to more than 100 countries through its website. Orlando Veras, a Macy's spokesman, said in an e-mail that it's a "very popular feature," especially when it comes to women's shoes, handbags and dresses.
Macy's also is among the retailers who have recently teamed up with the Chinese e-commerce giant Alibaba to sell items on an online shopping mall called Tmall. Other brands selling on that site include Old Navy, Nike, Amazon and Costco.
But international shipping may not be as appealing to all U.S. retailers. For example, other retailers in other countries sell many of the same electronics that Richfield-based Best Buy sells in the U.S.
So Best Buy currently only ships to the U.S. and related territories. It also has operations in Canada and Mexico, which are able to ship products to customers in those countries.