Will Target find its identity with a department store layout?
Over the past year-and-a-half, Target has played with its grocery assortment, brought its urban stores under one banner, and refocused its strategy along a “transformation roadmap” that targets four key areas in an attempt to carve out a distinct, new identity. But the chain’s most fundamental change may now be on the way. Target is, in a few locations, testing out multiple alterations to the look and feel of its stores. If the new formats catch on, we may soon see Target locations that look more like department stores than the familiar grocery hybrid of recent years.
Target is running a test in 25 stores in the Los Angeles area, according to the Minneapolis Star Tribune. The test project, titled “LA25,” consists of implementing 35 changes to each store’s look and feel. Some of the individual changes have already been tested in other stores, but the aim of the LA25 tests is to see how all 35 alterations function together within one location. One of the most significant upgrades is themed displays, similar to department stores, placed at the entrance in place of the discount bins and shelves that now greet Target shoppers.
Target will also make use of mannequin busts showcasing products in the activewear department and place service advisers offering customers information in the aisles, according to the Star Tribune reports.
This sign of Target’s ongoing efforts to move upscale and experiential come alongside last month’s news that the chain hired Mark Tritton, former executive at luxury retailer Nordstrom, as its chief merchandising officer.
The impact of the changes Target has rolled out thus far is not clear. The company recently released a Q1 earnings report that an article on CNBC called “mixed,” stating that the while results topped expectations, earnings for the quarter were light.
Other analysts have taken a dimmer view of the chain’s recent performance. Seeking Alpha reported that two straight quarters of revenue loss is “troubling” at a time when “other discounters” are growing. Given the changes it has been making, though, Target may no longer see itself as a discounter.
- Target tests new displays, service reminiscent of a department store – Minneapolis Star Tribune
- Target pursues a single-banner approach – RetailWire
- What will former Nordstrom exec do for Target’s merchandising? – RetailWire
- Target earnings top expectations, but revenue is light – CNBC
- Target Shares Roadmap to Transform Business – Target.com
- What Went Wrong At Target? – Seeking Alpha
DISCUSSION QUESTIONS: Will a department store-inspired look elevate the shopping experience and ultimately improve Target’s sales and profits? What do you see as the potential pitfalls?