Sunday, September 18, 2016

TARGET'S TURNAROUND EMPHASIZES OMNICHANNEL

Target's turnaround emphasizes omnichannel, in-store efforts

Dive Brief:

  • In effort to boost the “Pay less” half of its “Expect More, Pay Less” tagline, Target is revamping end-caps and marketing for ordinary household goods like detergent, Fortune reports.
  • The retailer is also rolling out the grocery changes it has been testing in Los Angeles, with 30 stores in Texas getting grocery overhauls to include better lighting, specially-trained staff and improved displays.
  • Target is getting prepared to encounter higher demand for omnichannel shoppers by separating lines for in-store pickup with clearly marked areas, differently dressed staff and specially colored bags, the Minneapolis Star-Tribune reports.

Dive Insight:

In an effort to recapture its “cheap chic” mantle, Target has worked hard to revamp merchandise and presentation of its apparel and home goods, and apparel sales have spiked there 20% to 30%, according to Fortune. But Q2 same-store sales slipped 1.1%, Target’s first negative same-store sales measure since the first quarter of 2014. 
“‘Expect more’ and ‘Pay less’ both have to work together,” CEO Brian Cornell told Fortune. “We lost a bit of that balance and now we’ve got to get back.” Its recent slump, reported amid fairly upbeat reports from other retailers in the summer quarter, indicates that Target has faced a plateau in its turnaround. 
But now, Cornell thinks he’s got the magic recipe — providing appealing grocery areas where small errands can become a part of routine Target runs, emphasizing the company’s low prices on consumer goods and smoothing out the last mile of in-store pickup with an omnichannel-specific lane. This combination of efforts will be particularly important over the holidays, when fatigued shoppers are more likely to take advantage of buying goods online if they know they can pick them up the same day. Target is unlikely to have to grapple with the hassle and expense it encountered with its curbside pickup program, which it halted abruptly in June.
As for grocery, Cornell says the aim is for it to be convenient for shoppers, but not holistic. Target recently brought in more fresh, organic produce and gluten-free and other specialty products, but the retailer doesn't have ambitions to expand much further. Target doesn't want to be like Whole Foods or Kroger's. “We’re not a grocer. We provide a convenient assortment of food,” Cornell told Fortune. “We’ve been able (in the past) to drive traffic without having a sushi chef.”