When Target first launched its PFresh grocery program in its conventional discount stores, the aim was simple: give its guests more reasons to visit the store more frequently and, in turn, drive greater sales of higher profit non-grocery items. The chain billed the concept as a convenience, but as a Star Tribune (Minneapolis) article points out, convenience is in the eye of the beholder and Target appears to be still trying to figure out how to best manage PFresh to its advantage.
One of Target's strategies to encourage shoppers to buy more than groceries is to place its PFresh department towards the back of its stores. That alone runs contrary to the notion that consumers can do a quick in/out trip to buy a small number of items, such as bread and milk.
"It's like Target is saying 'we are going to call you on your bluff,'" Amy Koo, an analyst with Kantar Retail, told the Star Tribune. "You may have intended to buy food but you really want to buy clothes."
"Target's greatest strength is the near-bullet-proof loyalty it enjoys from many of its customers. Its loyal base looks for excuses to make purchases at Target and groceries are a perfect reason to make the trip sooner than later," said Carol Spieckerman, president of newmarketbuilders and a RetailWire BrainTrust panelist in a 2012 discussion on this site. "Target's biggest opportunity for improvement is to create a more intimate shopping experience in grocery, and across the store for that matter. The hike to grocery is cold and cavernous and Target's uber-spaced departments render the term 'adjacency' an oxymoron. If Target is to get the full benefit of those (hopefully) more frequent food-driven trips, it needs to tighten things up or forfeit its cross-the-aisle opportunity."
Kantar's Ms. Koo said PFresh offers Target an opportunity for greater growth if the chain focuses more on convenience to attract new, less affluent customers. Rival Walmart, its been well documented, has gone the reverse route in recent years with mixed results.