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Target Hits The brand that goes beyond cheap and chic




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Target's recent sales successes are the first fruits of a strategy initiated by CEO Brian Cornell and his management team in early 2017 Cornell and Co. are committed to invest $ 7 billion over three years in store, digital, and supply chain upgrades, as well as new exclusive brand development, and America's second-best department store operator also pledged to sacrifice $ 1 billion a year Profits continue to drive up prices and generate less profitable digital sales.

A Target Business in Chicago (Photo Scott Olson / Getty Images)

This big bet seems to have paid off the second quarter of Target earnings release last week boasted 6.4% traffic growth, 6.5% comparable revenue growth (the strongest in 13 years, with only 4.9% store-only C omps), and digital sales by 41%, to 32% growth 12 months ago. 19659003] Goal has certainly been aided by a booming US economy. As CNBC reports, Cornell said in a earnings recap that retailers are currently experiencing "a very strong consumer environment – perhaps the strongest I have seen in my career." The goal is to use these conditions. Cornell continued, "Well run retailers with strong balance sheets … are winning right now … there are clearly winners and losers and we're sure we'll migrate to the winning side."

Target used that, too The demise of Toys R Us and Babies R Us has increased his inventory in the toy and baby categories.

In summary, these tactics show that Target sticks to its strategic knitting as well as its goals (19659003) Target's primary focus was set a generation ago when it revolutionized retail by adopting a "cheap and chic" strategy , Ron Johnson, a one-time leader in merchandising, recalled in a recode interview that in 1987 Walmart "focused on pricing and went down to (every day) low prices … no one could compete with them."

Target's response was to carefully evaluate his options. In an article by Harvard Business Review in 2004, Vice Chairman Gerald Storch said the company had made three strategic choices: "to specialize in becoming the low-cost producer or differentiating itself". Option 1 would have slowed growth, Walmart had already made the second choice, and so differentiation was the only way left. Target "decided to reposition itself as a mass trader of affordable smart goods."

This "cheap and chic" focus unleashed tremendous innovation within Target and created a mantra about "Expect More Pay Less," which eventually catapulted the retailer beyond K-Mart to become # 2 in the 2002 category.

There was the famous "What to Wear" campaign from 1990, which contained print ads hitting $ 19.99 stirrup pants with the headline: "What to wear with a $ 175 Adrienne Vittadini pullover". In popular imagination (and the lexicon) Target became Tar-zhay.

There were new product collaborations (which were to be imitated by 1000 retailers), starting with Alessi designer Michael Graves, who first won luxury prizes. (One of my favorite ads of all time showed yet another Target partnership, with fashion designer Isaac Mizrahi standing under two street signs labeled "5 th Avenue" and "Main Street" and the crossroads of high – design and low prices .)

To create new fashion trends, Target performed eye-catching stunts like a vertical fashion show in which acrobats paced the retailer's fall fashion in the 9-story Rockefeller Center in New York.

But even as a Target (literally ) Turned fashion on, the world went on and Amazon was on the rise. In order to achieve a clear differentiation in today's market for a much more demanding customer, Target had to build on what made it famous in the past. This meant adding three more "Cs" to "cheap and chic":

Target Today = Cheap + Chic + Comfortable + Connected + Collections

The "cheap" part of the value equation is still and the goal is to reduce operating profits to enable savings for customers. The "chic" element turns Target into more than a discount store, and the image projecting Target into better, brighter shops, fresh produce, and cross-platform campaigns is true to this legacy. However, there is more to the current target:

  • Convenient – One of the biggest initiatives around convenience was store design. The goal is to "reshape" its businesses, with more than 600 to upgrade by 2020. Some sites will have two entrances, one leading the customer into a world of "inspiration," the other all about "ease." There will be drive-up parking, an on-line pick-up counter, new self-checkout trams, and small groceries and snacks. The aim is also to introduce new, smaller, urban businesses that are easier to navigate and offer a same day delivery service. It focuses on the idea of ​​"Target Run And Done" – so that customers can get the basics quickly and easily. The acquisition of Target's delivery service by Shift turbo places a burden on the ability to meet customer requests on the same day. Target definitely recognizes that "The New Arms Race in Retail" is convenience.
  • Connected – Target knows that retail today is not online or offline, it's "non-line". According to CEO Cornell, targeting the blurry lines is Target: "We are driving the digital world and developing our businesses, digital channels, and supply chains into an intelligent network that delivers everything guests love about Target." This includes a better implementation of in-store Wi-Fi, which gives target teams the ability to search and order Target.com instantly on behalf of a customer, enhanced target app functionality, new augmented reality capabilities, and more. Target also connects its designers digitally to a select group of customers via an app called "Studio Connect." This allows immediate marketplace feedback and fast tracking of new design concepts.
  • Collections – A big chunk of Target is traffic through new, exclusive brands. The retailer is launching a dozen private label brands – not only in fashion, but also in areas such as technology with the "Heyday" brand. (Private Label is also a large area for Amazon, which has 70 exclusive brands.)

Target's new tech accessory brand – Heyday Jon Bird

Target Success is part of it the advertised "retail renaissance"? We will not really know it for several quarters, but the company has raised its earnings outlook for the full year and is so far … on target.

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Target's recent sales results are the first fruits of a strategy In early 2017, CEO and CEO Brian Cornell and his management team were set in motion to meet the needs of a new retail era, and Cornell and Co. Committed to Investing and Developing $ 7 Billion in Capital in Three Years in Store, Digital and Supply Chain Improvements New, Exclusive Brands: America's Second Best Department Store Operator Also Pledged to Sacrifice $ 1 Billion in Annual Operating Profits to increase prices and generate less profitable digital sales.

A Target Business in Chicago (Photo by Scott Olson / Getty Images)

This big bet seems to have paid off Target's second-quarter earnings last week's growth of 6.4%, 6.5% comparable sales growth (the strongest in 13 years, only 4.9%), and digital sales sti 41%, a growth of 32% 12 months ago.

The goal has certainly been supported by a booming US economy. As CNBC reports, Cornell said in a earnings recap that retailers are currently experiencing "a very strong consumer environment – perhaps the strongest I have seen in my career." The goal is to use these conditions. Cornell continued, "Well-run retailers with strong balance sheets … are winning right now … there are clearly winners and losers, and we expect to migrate to the winners' column."

Target also took advantage of the demise of Toys R Us and Babies R Us and has increased its inventory in the toy and baby categories.

Taken Together These tactics show that Target is clinging to its strategic knitting as well as adding an interesting new stitch.

The essential direction of Target was established a generation ago, when it revolutionized retail by a "cheap and chic" strategy. Ron Johnson, a one-time leader in merchandising, recalled in a recode interview that in 1987 Walmart "focused on prices and the (daily) low price … no one could compete with them."

Target's response was to carefully evaluate his options. In an article by Harvard Business Review in 2004, Vice Chairman Gerald Storch said the company had made three strategic choices: "to specialize in becoming the low-cost producer or differentiating itself". Option 1 would have slowed growth, Walmart had already made the second choice, and so differentiation was the only way left. Target "decided to reposition itself as a mass trader of affordable smart goods."

This "cheap and chic" focus unleashed tremendous innovation within Target and created a mantra about "Expect More Pay Less," which eventually catapulted the retailer beyond K-Mart to become # 2 in the 2002 category.

There was the famous "What to Wear" campaign from 1990, which contained print ads hitting $ 19.99 stirrup pants with the headline: "What to wear with a $ 175 Adrienne Vittadini pullover". In popular imagination (and the lexicon) Target became Tar-zhay.

There were new product collaborations (which were to be imitated by 1000 retailers), starting with Alessi designer Michael Graves, who first won luxury prizes. (One of my favorite ads of all time showed yet another Target partnership, with fashion designer Isaac Mizrahi standing under two street signs labeled "5 th Avenue" and "Main Street" and the crossroads of high – design and low prices .)

To create new fashion trends, Target performed eye-catching stunts like a vertical fashion show in which acrobats paced the retailer's fall fashion in the 9-story Rockefeller Center in New York.

But even as a Target (literally ) Turned fashion on, the world went on and Amazon was on the rise. In order to achieve a clear differentiation in today's market for a much more demanding customer, Target had to build on what made it famous in the past. This meant adding three more "Cs" to "cheap and chic":

Target Today = Cheap + Chic + Comfortable + Connected + Collections

The "cheap" part of the value equation is still and the goal is to reduce operating profits to enable savings for customers. The "chic" element turns Target into more than a discount store, and the image projecting Target into better, brighter shops, fresh produce, and cross-platform campaigns is true to this legacy. However, there is more to the current target:

  • Convenient – One of the biggest initiatives around convenience was store design. The goal is to "reshape" its businesses, with more than 600 to upgrade by 2020. Some sites will have two entrances, one leading the customer into a world of "inspiration," the other all about "ease." There will be drive-up parking, an on-line pick-up counter, new self-checkout trams, and small groceries and snacks. The aim is also to introduce new, smaller, urban businesses that are easier to navigate and offer a same day delivery service. It focuses on the idea of ​​"Target Run And Done" – so that customers can get the basics quickly and easily. The acquisition of Target's delivery service by Shift turbo places a burden on the ability to meet customer requests on the same day. Target definitely recognizes that "The New Arms Race in Retail" is convenience.
  • Connected – Target knows that retail today is not online or offline, it's "non-line". According to CEO Cornell, targeting the blurry lines is Target: "We are driving the digital world and developing our businesses, digital channels, and supply chains into an intelligent network that delivers everything guests love about Target." This includes a better implementation of in-store Wi-Fi, which gives target teams the ability to search and order Target.com instantly on behalf of a customer, enhanced target app functionality, new augmented reality capabilities, and more. Target also connects its designers digitally to a select group of customers via an app called "Studio Connect." This allows immediate marketplace feedback and fast tracking of new design concepts.
  • Collections – A big chunk of Target is traffic through new, exclusive brands. The retailer is launching a dozen private label brands – not only in fashion, but also in areas such as technology with the "Heyday" brand. (Private Label is also a big focus for Amazon, which has 70 exclusive brands.)

Target's new tech accessory brand – Heyday Jon Bird

Is target success as part the advertised "retail renaissance"? We will not really know it for several quarters, but the company has raised its earnings outlook for the full year and is so far … on target.


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