Target CEO points to one-stop shopping as key to chain’s success
Target continues to top the lists of major retailers thriving during the pandemic, even as many businesses struggle in an environment where customers are hesitant to spend much time in physical stores. CEO Brian Cornell recently pointed to one factor that has allowed Target to make the best out of an unprecedentedly bad situation — the fact that at Target you can buy most anything.
The retailer has been seeing a type of guest recently that shops all of its categories, Mr. Cornell told CNBC’s Squawkbox. He described the chain’s diverse product assortment as being especially important during the pandemic, since customers are attempting to limit the number of trips they make to stores. For example, Target has found parents with kids who are quickly outgrowing clothing visiting the store to buy private-label apparel, then moving to adult clothing sections and on to food and beverage.
Mr. Cornell’s statements come after Target posted outstanding third-quarter results with increases both in digital and physical sales. The chain saw online sales jump 155 percent and physical store sales increase 9.9 percent. The retailer’s pandemic-era success is also shared by its bigger rival, Walmart, which reported likewise impressive third quarter numbers, including a 6.4 percent gain in same-store sales.
While the Squawkbox interview touted the in-store experience as the basis for Target’s expectation-busting quarter, the chain has also been notably successful in its leveraging of delivery and curbside pickup/BOPIS, services that have become essential to customers during the novel coronavirus pandemic.
Even before the pandemic, Target was experiencing an uptick in the use of these services. Last Christmas season, the chain reported having prepared nearly five times the number of orders for curbside pickup than it had the previous year.
Target has been making significant investments in product lines as well as services, recently announcing it would be adding 600 new SKUs to its Good & Gather grocery brand. The line has drawn sales of $1 billion since its launch in September of 2019.
The chain has also promoted itself as a safe place to shop during the pandemic, introducing measures during the holidays meant to allow customers to move through the store faster.
- Target CEO Brian Cornell says retailer is benefiting from its ‘one-stop solution’ advantage – CNBC
- Target and Walmart’s 3Q results are just – Wow! – RetailWire
- Can Target assure customers they’ll be safe shopping for the holidays? – RetailWire
- Has BOPIS changed holiday selling? – RetailWire
- Target looks to expand the reach of its Good & Gather grocery brand – RetailWire
- Target Introduces New Safety Measures for the Holiday Season – Target
DISCUSSION QUESTIONS: Do you agree that one-stop shopping is the key to Target’s recent success and will it remain so after the threat from COVID-19 diminishes? Should more specialty retailers broaden their mix to try and compete with chains like Target or would that, in most cases, be a mistake?