Will Target’s new store format be even a bigger hit with its guests?

Discussion
Photo: Target
Nov 10, 2022

And now for something completely different. Target today said that it plans to open new larger-format stores with new reimagined open layouts designed to better meet the needs of the chain’s guests (AKA customers).

The new stores, which will measure around 150,000 square feet, will be about 20,000 square feet larger than Target’s average size. The new design, which will feature localized elements to make customers feel at home, came about after “years of research,” according to a company press release.

Target said the stores are designed with backroom fulfillment space that is five times larger than previous stores of a similar size to enable the chain to better meet the growing number of customers using its same-day Drive Up and Order Pickup services. The areas will also provide the space necessary to help Target fulfill online orders for delivery. More than 95 percent of the chain’s digital orders are fulfilled by store locations.

“Target’s stores are at the heart of how we deliver for our guests, whether they browse the aisles, shop online or stop by for same-day services like Order Pickup and Drive Up,” said John Mulligan, executive vice president and chief operating officer, Target. “Guests and team members tell us they come to Target because they feel inspired, connected and welcomed. With our reimagined store design and larger store footprint that better supports our same-day services, we can give guests more of what they love while incorporating features that build on our commitment to sustainability, community and helping all families discover the joy of everyday life.”

Will Target’s new store format be even a bigger hit with its guests?
Photo: Target

More square footage also means that the new and remodeled Targets will stock a wider selection of the retailer’s merchandise. The new format will not be as large as a SuperTarget but will include added space for food and beverages.

Target recently opened its new larger and redesigned store format near Houston. The new design features more windows and natural light. It also adds “plants and regionally sourced reclaimed wood” to create a warmer, welcoming environment.

The retailer said that more than half of its 200 or so planned full store remodels in 2023 will include elements of the new design. Almost all of its 30 new stores will do the same, and all of its remodels and new stores in 2024 will include the new design elements.

DISCUSSION QUESTIONS: Is Target on the right track with its new, larger store format and new design? What will this development mean for Target’s competitors?

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Braintrust
"If Target can successfully replicate this across new and existing stores, I think it's another sound decision in a long line of solid decision-making."

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18 Comments on "Will Target’s new store format be even a bigger hit with its guests?"


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Dr. Stephen Needel
BrainTrust

Target should re-design if it helps them do their business better, but let’s be honest — none of this is aimed at helping me, the shopper. None of this will hurt the competition.

Rich Kizer
BrainTrust

Wow, a super store on steroids. There will be an element, granted a small element that won’t like the hikes of shopping some categories. All that aside, this is going to be fun to watch. Now we all get a new lesson on inventory control and GMROI results.

Dr. Stephen Needel
BrainTrust

Rich — not a super store on steroids. According to the article, it will be smaller than a Super Target.

Georganne Bender
BrainTrust

To be fair, the article does talk about Target’s plans to open new larger-format stores; 20,000 square feet larger than the current average store size. So maybe “semi-steroids”?

Dick Seesel
BrainTrust

It sounds like Target has two goals in mind with its new store concept: First, to refresh hundreds of its existing stores; and, second, to improve the functionality of its omnichannel initiatives. The extra space devoted to online order fulfillment (in the Houston prototype) might be hard to replicate in existing stores due for remodel, however without identifying and shrinking less productive floor space.

Scott Norris
Guest

Target is putting rooftop solar up across the system, so perhaps in footprint-constrained sites there are opportunities to go up for storage. Engineers and construction crews will be up there regardless.

Gary Sankary
BrainTrust

Target is not afraid to tweak their formula if they think it differentiates them and enables them to serve their guests better. Consumer shopping patterns changed during the pandemic. Target won big by quickly standing up capabilities that allow customers to shop, receive and return goods however they wanted to. Curbside was a huge component of that success. So was being in-stock on key items. Target learned from those experiences and has designed a new format that will enable them to soar with those strengths and continue to differentiate themselves from the competition.

David Spear
BrainTrust

Most spaces that combine more ambient lighting with soft, rich patterns and wood/plant accents tend to be very inviting and provide a comfortable atmosphere for shopping. If Target can successfully replicate this across new and existing stores, I think it’s another sound decision in a long line of solid decision-making. Competitors will have to amp up their game with similar store environment investments if they choose to stay relevant.

Scott Norris
Guest

As a Minnesotan, I’m always game to visit a Target when traveling and compare it to what we have at home. The store in Maui is a great example of localizing, with outside trelliswork and interior accents using native wood and more windows at key locations. Even the classic red polos are swapped for red Hawaiian shirts with local iconography plus the company logo and bullseye. If they would have had those shirts for sale of course we would’ve bought them. I would love to see these ideas replicated around the fleet!

Georganne Bender
BrainTrust

Our local Target is currently undergoing a full remodel. I don’t know where this new design falls in Target’s future plans, but the store is beautifully branded, easy to shop, bright, and fun. This store even plays music, which makes a huge difference in the shopping experience.

Target understands its customers and makes decisions based on their needs, not what the corporate office thinks is cool. Shoppers understand that and reward the retailer with their business.

Karen S. Herman
BrainTrust

Research matters. Target’s new larger-format store reflects a commitment to fulfilling the shopper’s needs for elevated in-store experiences, greater product selection and on-site order fulfillment. All of these factors lead to instant gratification for the shopper and invite a return visit, leading to customer loyalty and brand affinity. Partner this with a solid online shopping experience and Target wins both online and offline. People like to shop, so help them enjoy the experience. That’s the bottom line.

Melissa Minkow
BrainTrust

This is super interesting to me, as it feels like a very modern take on the department store. The extra storage space is smart given that there’s been an increased premium on storing inventory the third-party way. I’ll be curious to see how profitable this is since rent will be higher, but I do trust that Target knows exactly what it’s doing here.

Gene Detroyer
BrainTrust

John Mulligan is more excited about this than I am. Should not all stores go through updates regularly? It is no surprise that the newest would have all the latest bells and whistles. But who am I to question this fine retailer? For more than five years, it has been game on at Target.

Verlin Youd
BrainTrust

Change and adaptation are universal truths for survival. It shows intelligence to chose to adapt and change rather than be forced in a far more traumatic way, in contrast to several retailers going through forced transformations today. The change to aesthetics, although interesting, would not seem as important to the actual business process and physical workflow impact. I’ll be interested to see if the actual shopping space is increased, or if the increased footage is to provide the backroom space necessary to continue to evolve an efficient, effective, and popular BOPIS/BOPIC experience with minimal impact to the in-store shopping experience.

David Slavick
BrainTrust

Sounds great! Target knows what it is doing. Putting a partner like ULTA in the store within a store, partnering with CVS for RX and with a larger format likely allow for more partners to take on floor space and generate incremental traffic plus new revenue share opportunities.

Jeff Sward
BrainTrust

This isn’t just new aesthetics, it’s new operations and logistics. It’s a footprint that recognizes today’s and tomorrow’s shopping and fulfillment needs versus last century’s methodologies. It would be great to read something similar about JCP or Macy’s, but their business model is no where as evolved as Target’s, even with Macy’s robust ecomm business. Begs the question of how malls will be able to evolve out of prior century modeling and logistics.

Craig Sundstrom
Guest

So Target already has “Super Targets,” which are larger, and (for want of a better term) “regular” Targets — which come in a range of sizes — and Target Express … this doesn’t really strike me as “new.” Don’t get me wrong, it’s a perfect example of “Kaizen,” but that means the answer to the final question is: not much … they’re making the same kind of improvements themselves.

Brad Halverson
Guest

That’s quite an increase in footprint. If one of the main goals is to formally embrace a much more seamless experience for ordering online and pick up at the store, this is a big winner for customers to save time, but have the flexibility of going inside for more. A differentiator against competitors.

wpDiscuz
Braintrust
"If Target can successfully replicate this across new and existing stores, I think it's another sound decision in a long line of solid decision-making."

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