Photo: Target
Target pursues a single banner approach
And then there was one. Target announced earlier this week that the company will do away with the CityTarget and TargetExpress banners and rebrand those store formats as simply Target.
While the company’s management believes there is strength in operating multiple concepts, there was also a view within Target’s c-suite that the various names could be a source of confusion as the company opened more such stores. The chain currently operates 14 stores under the CityTarget and Express banners, but has made clear it intends to pursue its “urban growth strategy.” The chain plans to open four new smaller stores in Chicago, Rosslyn, VA, San Diego and San Francisco in October along with two traditional-size units.
One name that is not being changed, at least for now, is SuperTarget, according to a Star Tribune report. While Target did not pursue supercenters to the same degree as Walmart, it continues to operate its bigger store format with a full grocery selection.
Discussion Questions
What is your reaction to Target getting rid of the CityTarget and TargetExpress banners? Do you think the company is sacrificing shopper appeal through the loss of differentiation in the store names?
Poll
BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
I agree that CityTarget was not needed as a distinct brand, at least based on my visits to the location in the Chicago Loop. Most customers would recognize it as Target — plain and simple — despite the assortment and space allocation changes geared to an urban (and car-less) customer in a two-level store. The merchandising and presentation will say “city” if the execution is right.
On the other hand, I think TargetExpress is a brand worth keeping. The name communicates “small format” and “edited assortments” very clearly, especially in urban neighborhood locations. In fact, putting the Target name on these stores may raise false expectations about the breadth of products offered to the consumer.
Multiple name strategies for a company have pluses and minuses. In some cases they are used to identify a difference in product, pricing etc. In others, to indicate a difference in format to alert the customers that they may or may not find the same selection, departments, etc. Most typically to indicate a smaller format or more limited selection.
Target’s decision to put three of its four formats back under one banner makes sense. Using the SuperTarget branded stores makes sense because of the significant difference in the offering.
It may be that Target found customers were confused by the City and Express modifiers to the name. Or perhaps they prefer saying we are opening six new stores rather than we are opening two Targets, one TargetExpress and three CityTargets.
I think they should have one name for smaller Target stores, as their largest stores are called SuperTarget, to set expectations about what consumers will find inside. When Target runs TV spots, consumers can realistically expect every store named Target to carry those products. That may not be the case with the smaller stores. Target already has a perception problem with regular out-of-stocks. This may make things worse.
If the various banners have points of differences, then the name consolidation does not make sense. I presume this is why Target is keeping the SuperTarget banner. On the surface, the names, CityTarget and TargetExpress appear to convey characteristics dissimilar to the Target banner.
However, the key here is consumer perceptions. If consumers view these various banners as not unique then name consolidation makes good strategic and financial sense. I assume Target has engaged in the appropriate consumer research before making this decision.
First of all I think the CityTarget and TargetExpress sub-brands weren’t fully enough developed and therefore should have gone away. Sub-branding is a tricky art and Target doesn’t seem to be too good at it.
On the other hand, branding is an equally difficult process and Target may be falling into a common trap here. Brands are promises to the consumer. When they see a brand name they have certain expectations. If a specific format fails to deliver against those expectations the brand is weakened.
If for example “Company X” operates stores that are open 24 hours a day and a format that closes at 9 a.m. and brands them both the same some customers are bound to be upset when they rush over to Company X’s at 3 a.m. only to discover that it is closed.
As to the shopper appeal, it is entirely dependent on how well the sub-brands were built out and accepted. Since they are going away I presume we know the answer to those questions.
Corporate internal redundancy may be something Target can not afford to keep or, as they would have us believe, simply no longer wish to have. This will be of little concern to the consumer that wishes to shop at Target. That makes the change moot except for company operations that will be burdened with the smaller boxes having relevant inventory supply and content to meet demand. Differentiation is a means for the retailer to inform the consumer of the value of doing business with the company. This market need may have been totally forsaken in another cost cutting move to add revenue to the ever-shrinking bottom line that is still paying for the company’s past mistakes.
Target, like all retailers need to do, is looking down the road. In an omnichannel world Target will be positioned to provide kiosk tablet service for consumers to order virtually any product they may choose to purchase.
Speed of service, convenience, pick-up flexibility and a trusted retailer view held by the consumer will be the leverage point for Target. In the process, they will be positioned to shave costs via smaller square footage, as well as savings on labor costs at the store level.
It is one brand. One banner serves it well.
I get CityTarget going away. I don’t care if it has one or two floors if it is just a Target store, and that was about the only distinction I could see.
But I don’t get the logic in keeping SuperTarget and blowing up TargetExpress. If it is important to communicate “bigger with more items” isn’t it also important to communicate “smaller with fewer items”?
And isn’t there less risk of disappointing consumers if you over-deliver on selection (Target vs. SuperTarget) than if you under-deliver (Target vs. TargetExpress)?
Calling all those formats by different names is what we call “non-customer language.” In other words, you’re talking to yourself.
What Target did is just smart, clarifying and customer-centric. One brand! Hard NOT to get that.
Agree with Lee’s comment above. City Target especially seemed like unnecessary sub-branding all along. Most consumers get that a store in a very urban location is going to have an at least slightly different layout and assortment than one in a suburban power center. People shop the Target closest to them and think of it as “my Target.”
CityTarget was an instance of an internal distinction without a difference to shoppers. Disposing of the brand is a no-brainer.
TargetExpress was just a signal that the store is small. Seems like anti-branding to me. Yes the assortment must be edited to fit, but shoppers don’t need to be reminded of that.
SuperTarget, on the other hand, tells shoppers that the assortment includes a full-on grocery assortment. That used to matter a great deal, before Target stores had their food assortments expanded a few years ago. Now the distinction is narrower, but still meaningful, I think.
So overall, I think I endorse Target’s re-branding decisions. While store formats may require varied operational practices, the brand is one.
As a Target shopper and follower, my take on anything other than the clear Target and Super Target says you are getting less at that store. Eliminating those restrictive names gives Target a chance to micro merchandise the store without putting other constraints on it. I do not believe this name change will necessarily help them unless their merchandise mix in those stores is fine tuned.