More Americans are making Target runs
A lot of Americans are going on Target runs.
The retailer saw shopper traffic improve 6.2 percent during the just completed holiday season, according to Placer.ai, even as other major retailers like Best Buy and Walmart experienced footfall declines.
Store traffic for the chain, as reported by Reuters, was up across the board with the exception of Hawaii and Washington, D.C..
The store traffic numbers themselves don’t tell the whole story as COVID-19, first with the Delta variant and then Omicron, affected consumer behavior and convinced many to shop online.
Past performance suggests that Target is likely to report strong numbers for the current quarter when it reports next month. The chain has consistently registered traffic growth both in stores and online in recent years.
Target reported a 12.7 percent gain in same-store sales last quarter, on top of a nearly 21 percent increase during the same period in 2020.
CEO Brian Cornell cited increased customer traffic as the key factor on the company’s earnings call in November.
“Store sales were the primary growth driver this quarter, while same-day services propelled our digital growth. Since the third quarter of 2019, prior to the pandemic, Q3 store sales have expanded by $3.8 billion, while digital sales have increased another $3.1 billion,” he said. “This provides a vivid demonstration of the flexibility of our operating model to serve our guests no matter how they choose to shop.”
Mr. Cornell, who is slated to give a keynote address next week at the National Retail Federation’s conference in New York, emphasized the contribution of Target’s team members as the key to the chain’s success in an interview with the Minneapolis Star Tribune.
“What underscores our success over the last four, five, six years is that commitment to team and recognizing that from a consumer and guest standpoint that human touch is still important,” he said. “They like coming into our stores and interacting with our team members.”
Target’s success is directly tied to its stores. Mr. Cornell pointed to the 2017 decision to shift fulfillment of online orders from warehouses to store locations.
“It was not well received. It was a big bet,” he said of the decision. “The convenience and ease it was going to offer, to me, that was the vision of the future that our team understood because they had been talking to consumers and talking to our guests.”
- Target Holiday Shopper Traffic Growth Topped Walmart, Best Buy – Data – Reuters/U.S. News & World Report
- Target (TGT) Q3 2021 Earnings Call Transcript – The Motley Fool
- Target CEO Brian Cornell says there’s no off season in retail – Minneapolis Star Tribune
DISCUSSION QUESTIONS: What do you think is convincing consumers to make more Target runs? Where do you see the biggest opportunities for Target to further improve on its performance?