As headlines often mention the “retail apocalypse” in today’s market, it is necessary to argue that retail is not dying—but it certainly is changing. Many factors—such as the increase in ecommerce retail, shift in consumer behavior and ever-changing trends—can all lead to transformation in the retail space. However, some retailers are adapting to this change better than others. One retailer that has successfully combated the pressures of today’s market has over 1,800 stores in 49 states—Target.
Mary Kate Donahue, 2017.
Target realizes that they need to change, adapt and reinvent multiple facets of their company to stay relevant in the retail space. Often, people compare Target to Walmart, K-Mart or other big-box stores. However, Target set themselves apart in the 1990s and early 2000s with more refined, fashionable clothing brands. Now in 2017, Target recognizes that their exclusive brands need to be transformed. According to Kavita Kumar (2017a), Target “is saying goodbye to well-known brands such as Merona and Mossimo and introducing new labels in an effort to not only make the retailer more relevant in the face of newer competition but also to pick up market share from those chains that are struggling.” In addition to revamping their clothing selection, Target also has plans to expand their beauty products. According to Lauren Thomas (2017b), “the collection, called Glow Studio, will feature four-step routine kits that simplify a typical 10-step Korean beauty regimen, making it more accessible to users.” As another private label endeavor, Target aims to sees much value in “growing its beauty offerings at a time when players like Ulta and Sephora are expanding their physical footprints” (Thomas, 2017b). Therefore, Target realized the need to change their product selection and is actively taking action to do so.
Mary Kate Donahue, 2017.
Mary Kate Donahue, 2017.
Along with reinventing their clothing and beauty brands, Target will use this change in product to help streamline their position in omnichannel retailing. Kumar (2017a) adds that “over the next 18 months, Target will launch more than a dozen new brands, four of which begin hitting stores in coming weeks. They will be accompanied by a ‘More in Store’ marketing campaign that will feature TV and print ads, a big direct mail piece and an increased digital investment that includes tapping into social media.” By promoting these new clothing brands via TV, print, mail and various social sites, Target maximizes their potential to target a wide variety of consumers via the platform they prefer.
In addition to the store level, Target is also making changes at the corporate level. As of August 2017, Target hired Minsok Pak to fill the role of Chief Strategy and Innovation. Pak comes with experience such as “senior vice president of Lego’s stores and e-commerce sites around the world” (Kumar, 2017b). With the new leadership of Pak, Target hopes to hone their presence in the sphere of retail innovation and technology. For example, “innovation efforts are being embedded across all of the work Target does, such as current efforts to launch more than a dozen private-label brands in the next two years, remodel hundreds of stores with an eye toward integrating more digital elements, and remake its supply chain for the digital era,” says Kumar (2017b). Once again, Target plans to focus on digitalization to streamline the omnichannel experience.
Another connection to omnichannel retailing is Target’s plan to remodel over 600 outdated stores. By doing this, Target “will focus on creating more engaging guest experiences on the shop floor,” according to Pamela N. Danzinger (2017). This approach should see much success as many consumers now look for an aesthetically pleasing, fun shopping experience, rather than just a dull warehouse full of poorly-displayed merchandise. Along with the designed stores, “Target also plans to operate 130 small-format stores by the end of 2019 located in college communities and dense urban areas,” adds Danzinger (2107). By doing this, Target is making themselves physically available to more consumers, despite the limitations of location.
Potentially the most notable of the aspects, Target is bringing new, innovative thinkers into their retail space. With their Techstars Retail Accelerator program, “Target invites leaders from ten startups to work with and be mentored by Target executives for 13 weeks” (Danzinger, 2017). The opportunity allows Target to give real-world business advice to young, aspiring entrepreneurs, with the potential that those entrepreneurs could have their inventions sold across the nation at Target. The program is certainly mutually beneficial, and benefits Target in the sense that they are using young Millennials and members of Generation Z to then market specifically to those cohorts.
These various efforts toward reinvention and innovation seem beneficial, but have they stimulated recent success for the retailer? According to Daniel Keyes (2017), Target’s efforts certainly have manifested in the retail space. Keyes (2017) adds that Target revealed “a 1.6% year-over-year (YoY) uptick in revenue to $16.4 billion for the period. The retailer also saw its same-store sales rise 1.3% YoY, marking the end of a three-quarter streak of declines in the metric.” Looking toward future success, Lauren Thomas (2017a) claims that “a focus on executing new merchandising, and on offering customers value through pricing and convenience, will differentiate Target from the competition.”
Mary Kate Donahue, 2017.
Although Target has certainly seen recent success— a claim that is upheld by specific data—and experts in the retail industry predict continued growth for the retailer, how does the reinvention of Target affect the retail industry, as a whole? Because Target operates with over 1,800 locations, the retailer serves thousands, if not millions, of consumers. Since Target is able to deliver a charming shopping experience, with on-trend clothing products, unique home décor, high-quality groceries and other various household, beauty and electronic items, then their customers will be pleased, affecting consumer attitude and the overall retail industry. In addition, Target’s reinvention may spur its competition to reevaluate the state of their companies. Therefore, Target’s changes and adaptations not only benefit them, but could potentially positively affect other retailers who want to remain competitive. Additionally, because ecommerce retail will likely drive the majority of sales within the coming years, Target’s efforts to improve their online and mobile sites, as well as streamline their omnichannel experience, provides consumers with a platform—other than Amazon—to shop for a vast variety of products.
“Target is pulling out all the stops to bring back its “Tar-Jay” magic” (Danzinger, 2017). After making recent changes and with plans for even more transformation and growth, Target is on the fast track to reclaiming their former glory as a more prestigious, “one-stop-shop,” big box retailer. The retail environment has drastically changed recently, and Target recognized this reality and made the radically bold decision to adapt alongside the industry. Although many consumers already have difficulty walking out of Target empty-handed, the retailer just made that concept even more of a pervasive challenge.
References
Danzinger, P. N. (2017, August 29). Target’s Renaissance: New Blood, Not New Brands or Stores, Will Bring The Company New Life. Forbes. Retrieved from www.forbes.com.
Keyes, D. (2017, August 2017). Target sees in-store and online improvements. Business Insider. Retrieved from http://www.businessinsider.com.
Kumar, K. (2017, August 16). Target refreshes brands to stay chic and relevant, phasing out Merona and Mossimo. StarTribune. Retrieved from http://www.startribune.com.
—–. (2017, August 23). Target taps Minsok Pak to be new chief strategy and innovation officer. StarTribune. Retrieved from http://www.startribune.com.
Thomas, L. (2017, August 16). Target shares jump as shoppers return to stores, boosting sales. CNBC. Retrieved from https://www.cnbc.com.
—–. (2017, September 6). Target to roll out exclusive K-beauty brand, growing its makeup offerings. CNBC. Retrieved from https://www.cnbc.com.
