March 03, 2015

Target Sacks Thousands Of Salaried Employees - And Other Omnichannel Nonsense

Click here for the news about Target.

Omnichannel experts want you to fully digitize your business ... they want you to allow your customers to buy wherever, whenever. Expand in Canada! Grow your online business! Digitize the store! Do it all!

Did you read the article yet? Go back and read it. Ok, you're lazy. You want me to outline the facts for you. Fine. Here we go:

  • Target's omnichannel international expansion failed miserably.
  • Target winds up being $2,000,000,000 in the red in Canada.
  • Wall Street doesn't like it when you lose billions of dollars on an omnichannel international strategy.
  • Wall Street wants $.
  • Target cuts costs, to the tune of $2,000,000,000 (why does that number sound so familiar ... oh, it's, coincidentally, the same amount that was lost in Canada).
  • Thousands of Target employees, the vast majority of course had nothing to do with international expansion, get the benefit of being fired as part of a reorganization of the business.
  • Wall Street, however, is thrown a bone, to the tune of $2,000,000,000 (there's that number again) to $5,000,000,000 of current and future stock buy-backs. In other words, Target takes cash that could be used to grow the business (or pay employees) and instead buys back stock, driving up the price of the stock, allowing Wall Street to sell the stock and earn a profit.

Why do we listen to vendors, trade journalists, researchers, consultants, and other third parties who demand omnichannel expansion? Those folks get paid when you pay attention to them. Why are we letting the non-accountables run our businesses for us? Notice that the non-accountables don't get fired (yet) ... nope ... just Target employees get fired.