September 11, 2014
Target looks to get its groove back
Will Brian Cornell be able to return Target to its Tar Jay days? When Target’s new CEO was named to the post in July, many questioned whether he would be able to help the chain regain its cheap chic mantle after a massive data 2013 breach and numerous execution issues nicked away at the company’s brand equity in recent years.
Mr. Cornell told The Wall Street Journal that he plans to focus on key categories, including baby, children, fashion, furniture and wellness products, to drive traffic and compete with rivals ranging from Amazon to Walmart. Other categories, while important, will receive more attention as the chain meets its goals elsewhere.
An example of Target’s approach under Mr. Cornell is the chain’s hookup with TOMS just in time for the holiday season. TOMS for Target includes 50 items priced under $50. In addition to TOMS slip-on shoes, other items in the seasonal collection include apparel and accessories for women, men and kids as well as home goods. The TOMS for Target promotion will run from November 16 through March 12 in the company’s stores in the U.S. and Canada.
![[Image: TOMS for Target]](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZpZXdCb3g9IjAgMCAxIDEiIHdpZHRoPSIxIiBoZWlnaHQ9IjEiIGRhdGEtdT0iJTJGcHVibGljJTJGaW1hZ2VzJTJGZGlzY3Vzc2lvbnMlMkYxNzc3MSUyRnRhcmdldC10b21zLXN0aWxsLmpwZyIgZGF0YS13PSIxIiBkYXRhLWg9IjEiIGRhdGEtYmlwPSIiPjwvc3ZnPg==)
In line with TOMS’ One for One Giving model, for each item a customer buys from the collection, a blanket, meals or shoes will be donated to the following charities: American Red Cross Disaster Relief, Canadian Red Cross Disaster Relief, Feeding America and Food Banks Canada.
"We’re excited to partner with Target for the holidays and take TOMS’ One for One giving model further than ever before," said Blake Mycoskie, TOMS founder, in a statement. "Every purchase allows Target’s guests to bring home a beautifully designed product and do good, providing nourishment, warmth and shoes to a person in need."
At a national meeting of the chain’s store leaders this week held at the Target Center in Minneapolis, Mr. Cornell told the Star Tribune, "Hopefully, five years from now, ten years from now, we’ll have people look back and say this was a real turning point. They know this is a new day, a new start."
In a separate Star Tribune piece, David Strasser, an analyst with Janney Capital Markets, gave Mr. Cornell credit for helping Target to regain some of its lost swagger.
"It seems that if nothing else, in his short time [as] CEO, Brian Cornell has brought back some confidence and reignited passion in a management team that has been hit pretty hard by a variety of factors, many of which were out of its control," Mr. Strasser wrote in a note to clients.
- Target Narrows the Bull’s-Eye, With Emphasis on Signature Products – The Wall Street Journal (sub. required)
- Great Design, Great Cause: Target and TOMS Team Up for the Holidays – A Bullseye View
- Target revs up managers for the holidays – Star Tribune (tiered sub.)
- Target sees signs of progress, but cuts outlook for year – Star Tribune (tiered sub.)
BrainTrust
Recent Discussions
Discussion Questions
Do you think Brian Cornell is taking the right approach to helping Target regain its cool image? Is progress on that front the key to the chain’s success or failure going forward?
Poll
I have always viewed Target’s focus on food and consumables to be a distraction from its core business. Having made the investment in groceries it’s hard to step back now, but the strategy served largely to “commoditize” a company with a distinct brand identity. I’m pleasantly surprised to see Mr. Cornwell (the subject of initial skepticism because of his CPG background) focusing on “cheap chic” areas like apparel and home decor.
It was also interesting to note in the Wall Street Journal article that Mr. Cornwell paid a visit to Bob Ulrich, who was perhaps the most important figure in Target’s history. (The Journal said that Mr. Ulrich stepped back while his protege Gregg Steinhafel took the company in a very different direction.) Bob Ulrich’s re-engagement with the new CEO has some symbolic value for a company trying to move faster while honoring its heritage.
I’m not sure Target was ever “cool,” but it was an acceptable place to find better-looking clothes or home furnishings than one might find at Walmart without going to a mall department store. If he’s betting that partnering with TOMS is going to turn around his business, he better have a plan B. Nobody runs a successful store based on doing good things for the world. And I’m not sure I care if management is excited—I care about whether the store workers are excited and the store has good merchandise at a good price.
Absolutely. Brian Cornell is moving Target back to its “cool days” image with the latest commercials as well as the creative hookup with TOMS. Target got away from concentrating on the strategy that separated them from other retailers and online businesses, particularly when they greatly expanded their food program. Not to say that food cannot work for them, but that is NOT the reason most consumers visit Target stores. It will be very interesting to see what 2015 brings in the areas of marketing and promotion.
Target should focus on the basics: people and products. It needs to improve customer service, decrease out-of-stocks and bring in merchandise that consumers want. Mr. Cornell is taking steps in this direction, but turning around the company will take time. Trying to make Target cool again, before tackling these issues, would be a mistake.
While I think the management and merchandising is on the right track, the real change has to be with the store staff. They have to believe in themselves and in the “new” Target in order to get back to the way the consumer, “guest” in their terms, looks and shops at Target. It will happen, and getting the store team on board will shorten the time.
It’s a total TBD at this point. We shall see. Personally, I’m rooting for them.
If J.C. Penney can head back to “working” surely Target can course-correct and come out the other end regaining it’s vibrancy.
Today you need an image and supporting shopping experience to stand out in the crowd. Target trying to compete directly on price with Walmart is no different than an independent supermarket trying to compete. They will lose, so having a different image, be it cool or otherwise is a requirement for success.
Hope is a waking dream. Brian Cornell’s Target, just like the always cold (vs. cool) Minnesota Vikings, are hoping for the fulfillment of their dreams. Both organizations know success is cool.
The marketplace wants a cool big box retailer and they will support small aspects of Target’s quest just as David Strasser suggests. But at this moment Target, with its dynamics and confusing shelves, still seems to be but a dream within a dream.
I absolutely believe that Target did have a cool image at one time. They were the front leaders in cheap chic and then got totally distracted during the recession.
I do think the TOMS products is in the right wheelhouse for them. (Unfortunately that will hurt the independent specialty retailers who carry them, but that’s another story for another day.)
I think the bigger challenge is the slowdown in traffic affecting so many retailers, and TOMS is not going to impact that. I think Target will need to continue to innovate and differentiate themselves to create incremental visits.
Yes. The promotion and purpose are cool, and Target and TOMS sound like a great winning combination. One of many, I’ll bet, that Target will establish. But I believe the Tar Jay image is passe. Maybe something new will pop up as Target becomes relevant and special again.
A couple of thoughts. While Target may not necessarily ever have been cool, it certainly was a heck of a lot cooler than its competitors. However, what Target now needs is not just “cool” merchandise, but it needs to get the in-store experience under control. I recently was in a CityTarget in L.A. and the GM departments were a huge mess. Admittedly a high-traffic store, but I’m still seeing similar situations in other locations.
It would be interesting to know how much the grocery department contributes to Target’s bottom line. IMHO, every box of cookies that Target carries takes away floor space for the cheap chic items that made Target’s reputation in the first place.
The current ad for Altuzarra is sexy, compelling…and has the potential to bring shoppers back.
I’m with Kelly here: fundamentals first.
As for getting “cool” back, no …not gonna happen: that was the 80’s-90’s, before online and, quite frankly, before the leading edge of their key demographic was even born. You’re never going to be cool if it’s where someone’s parents shopped.
Target’s design, and brand-icon pop-up shops like this TOMS project help make it relevant and different vis-a-vis Walmart and other value-priced retailers. I remember the Missoni program sold out in a couple of days, and the TOMS program should do the same.
I agree with the folks who say food and consumables took Tar-jay out of its sweet spot – but that is sunk investment now in terms of store capital. Future store footprints could omit the food formats in those zip codes that don’t need more fresh food. In urban environments, go for the food and help solve food desert issues. The store should and will evolve several models; super-sized and small urban to become more relevant. “Cool” isn’t necessary—relevant and useful, amen. And more and more health to continue to extend primary care to the community will help the store’s (and shoppers’) sustainability.
Merchandising has always been Target’s strength. What we did not see in grocery was the sophisticated approach they applied to soft goods and in some cases home goods.
Going back to what has differentiated Target in the past makes sense. Those core tenants applied to grocery and the coming age of digitally enabled shopping would be intriguing to see.
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I have always viewed Target’s focus on food and consumables to be a distraction from its core business. Having made the investment in groceries it’s hard to step back now, but the strategy served largely to “commoditize” a company with a distinct brand identity. I’m pleasantly surprised to see Mr. Cornwell (the subject of initial skepticism because of his CPG background) focusing on “cheap chic” areas like apparel and home decor.
It was also interesting to note in the Wall Street Journal article that Mr. Cornwell paid a visit to Bob Ulrich, who was perhaps the most important figure in Target’s history. (The Journal said that Mr. Ulrich stepped back while his protege Gregg Steinhafel took the company in a very different direction.) Bob Ulrich’s re-engagement with the new CEO has some symbolic value for a company trying to move faster while honoring its heritage.
I’m not sure Target was ever “cool,” but it was an acceptable place to find better-looking clothes or home furnishings than one might find at Walmart without going to a mall department store. If he’s betting that partnering with TOMS is going to turn around his business, he better have a plan B. Nobody runs a successful store based on doing good things for the world. And I’m not sure I care if management is excited—I care about whether the store workers are excited and the store has good merchandise at a good price.
Absolutely. Brian Cornell is moving Target back to its “cool days” image with the latest commercials as well as the creative hookup with TOMS. Target got away from concentrating on the strategy that separated them from other retailers and online businesses, particularly when they greatly expanded their food program. Not to say that food cannot work for them, but that is NOT the reason most consumers visit Target stores. It will be very interesting to see what 2015 brings in the areas of marketing and promotion.
Target should focus on the basics: people and products. It needs to improve customer service, decrease out-of-stocks and bring in merchandise that consumers want. Mr. Cornell is taking steps in this direction, but turning around the company will take time. Trying to make Target cool again, before tackling these issues, would be a mistake.
While I think the management and merchandising is on the right track, the real change has to be with the store staff. They have to believe in themselves and in the “new” Target in order to get back to the way the consumer, “guest” in their terms, looks and shops at Target. It will happen, and getting the store team on board will shorten the time.
It’s a total TBD at this point. We shall see. Personally, I’m rooting for them.
If J.C. Penney can head back to “working” surely Target can course-correct and come out the other end regaining it’s vibrancy.
Today you need an image and supporting shopping experience to stand out in the crowd. Target trying to compete directly on price with Walmart is no different than an independent supermarket trying to compete. They will lose, so having a different image, be it cool or otherwise is a requirement for success.
Hope is a waking dream. Brian Cornell’s Target, just like the always cold (vs. cool) Minnesota Vikings, are hoping for the fulfillment of their dreams. Both organizations know success is cool.
The marketplace wants a cool big box retailer and they will support small aspects of Target’s quest just as David Strasser suggests. But at this moment Target, with its dynamics and confusing shelves, still seems to be but a dream within a dream.
I absolutely believe that Target did have a cool image at one time. They were the front leaders in cheap chic and then got totally distracted during the recession.
I do think the TOMS products is in the right wheelhouse for them. (Unfortunately that will hurt the independent specialty retailers who carry them, but that’s another story for another day.)
I think the bigger challenge is the slowdown in traffic affecting so many retailers, and TOMS is not going to impact that. I think Target will need to continue to innovate and differentiate themselves to create incremental visits.
Yes. The promotion and purpose are cool, and Target and TOMS sound like a great winning combination. One of many, I’ll bet, that Target will establish. But I believe the Tar Jay image is passe. Maybe something new will pop up as Target becomes relevant and special again.
A couple of thoughts. While Target may not necessarily ever have been cool, it certainly was a heck of a lot cooler than its competitors. However, what Target now needs is not just “cool” merchandise, but it needs to get the in-store experience under control. I recently was in a CityTarget in L.A. and the GM departments were a huge mess. Admittedly a high-traffic store, but I’m still seeing similar situations in other locations.
It would be interesting to know how much the grocery department contributes to Target’s bottom line. IMHO, every box of cookies that Target carries takes away floor space for the cheap chic items that made Target’s reputation in the first place.
The current ad for Altuzarra is sexy, compelling…and has the potential to bring shoppers back.
I’m with Kelly here: fundamentals first.
As for getting “cool” back, no …not gonna happen: that was the 80’s-90’s, before online and, quite frankly, before the leading edge of their key demographic was even born. You’re never going to be cool if it’s where someone’s parents shopped.
Target’s design, and brand-icon pop-up shops like this TOMS project help make it relevant and different vis-a-vis Walmart and other value-priced retailers. I remember the Missoni program sold out in a couple of days, and the TOMS program should do the same.
I agree with the folks who say food and consumables took Tar-jay out of its sweet spot – but that is sunk investment now in terms of store capital. Future store footprints could omit the food formats in those zip codes that don’t need more fresh food. In urban environments, go for the food and help solve food desert issues. The store should and will evolve several models; super-sized and small urban to become more relevant. “Cool” isn’t necessary—relevant and useful, amen. And more and more health to continue to extend primary care to the community will help the store’s (and shoppers’) sustainability.
Merchandising has always been Target’s strength. What we did not see in grocery was the sophisticated approach they applied to soft goods and in some cases home goods.
Going back to what has differentiated Target in the past makes sense. Those core tenants applied to grocery and the coming age of digitally enabled shopping would be intriguing to see.