What Target is getting right and where vendors can win
Retail has been very exciting this year and I am proud of what our team has accomplished. From new product launches to exciting guest insights, we’re heading into the holiday shopping season with a renewed sense of optimism. PSFK recently published their annual Future of Retail report and their three pillars this year are: Own the Infrastructure, Own The Experience, and Own the Relationship. Target continues to make strides within these pillars. Here is why.
Target owns infrastructure by delivering products to the guests in multiple ways
Target’s investment in supply chain and delivery technology is paying off. With the acquisition of Shipt, expansion of curbside delivery, and their recent announcement of free shipping on everything during the holiday season, they’re well on their way to owning the infrastructure which the guest has made clear they want their product when and where they want it. What does this mean for the vendor community? We’ll continue to see pressure on margins. So, what are ways to deliver profitability? Using data to dig deep into the performance of your products can provide the necessary insights to reduce loss sales from out of stocks, optimize everyday and promotional pricing, and even manage end of season markdowns. Margin pressure will not go away any time soon, it is time to get creative and prescriptive on solutions.
Target is owning the relationship/experience by bringing back the “surprise and delight”
A trend emerging in all of retail is the focus on personalization. While personalization takes a lot of TLC to create, the payoff is clear when you walk in. I am loving the redesigned men’s grooming section in some stores that highlight emerging brands and the assortment isn’t a “one size fits all” approach. Expanded niche brands in the beauty section and the continuation of the beauty concierge services gives guests a reason to explore, discover, and be delighted when they’re in the stores. Looking at the home section, Target has brought back the inspirational experience with partnerships with Chip and Joanna Gaines and remodeling stores that showcase how the product would look on your own dining room table. Personalized digital promotions through Cartwheel send the message to the guest that Target is tailored to their uniqueness. We hear all the time that Target loves newness. Target relies on the CPG community to constantly be looking at trends and new ways to introduce emerging products to guests.
This week kicks off Black Friday, and so it begins. Because of the complexities of today’s retail, I believe teams should continuously be looking at small actionable plans that we can execute quickly in order to maintain profitability, and ultimately growth. It doesn’t need to be a break-through strategy, but small adjustments pre, during, and after the selling season can really add up to a very merry holiday.