Target succeeds by going big on convenience in small stores
Target is pushing ahead with its plan to have around 130 small stores operating in communities around the U.S. by the end of 2019. This week, Target confirmed plans for four stores — three in New York City and one in Chicago — demonstrating that the retailer is planning to build its business around small boxes even further into the future.
The three stores planned in New York are located on the Upper Eastside of Manhattan, Astoria, Queens and on Staten Island, according to CNBC. The Manhattan store, which will open next year, will be the second smaller box the chain operates in the borough. It also has a store that sits across from Macy’s Herald Square flagship. The Queens location shows that Target is taking a long-range view with its smaller stores. The retailer plans to open the store by 2022.
Target’s planned Chicago store will be located in the city’s Logan Square neighborhood and cover 27,400-square-feet, according to a Chicago Tribune report. The store, which is scheduled to open in 2020, will be the tenth smaller format location for the retailer in the Chicagoland market.
The Tribune report points out that Target is clustering small stores in Chicago, with locations within a mile-and-a-half of one another. Target has identified college communities and densely populated urban neighborhoods as the ideal locations for its small stores.
“Part of joining a new community is being a good neighbor,” said Target CEO Brian Cornell on the chain’s fourth quarter earnings call last month (via Seeking Alpha). “So, our teams go deep into those neighborhoods to really know those guests and tailor the experience to what they need. It’s a capability we built and refined over time.”
Target’s emphasis on small stores is supported by the numbers. Research released last year by GlobalData Retail showed the small stores were more than twice as productive as Target’s big boxes.
- Target reveals locations of three new small-format stores in New York – CNBC
- ‘Small-format’ Target to open at former site of Logan Square Discount Mega Mall – Chicago Tribune
- Target’s CEO Brian Cornell on Q4 2017 Result (Earnings Call Transcript) – Seeking Alpha
- Why are Target’s small stores much more productive than its big boxes? – RetailWire
- Will hundreds of small stores produce big results for Target? – RetailWire
DISCUSSION QUESTIONS: What role do you see small stores playing in Target’s strategic mix in the years to come? What do you think is behind Target’s success with its smaller footprint stores?