CEO Reveals How Target Plans To Get Its Style Groove Back
Bullseye, the Target dog. Photo: Getty Images
The annual WWD Retail and Apparel CEO Summit kicked off on Tuesday morning at the Pierre Hotel in New York City, drawing a range of high-level fashion and retail executives from LVMH to Scoop NYC.
Day one began with a talk from Target CEO Brian Cornell about “Transforming Target: How Target Is Leading Through Change, Putting Its Guests First and Doubling Down on Style in the Digital Age.” Cornell was hired in 2014, and had his work cut out for him, telling attendees that “Target had eight quarters of negative traffic, three quarters of negative [comparable same-store sales], and our stock was at a three-year low.” He also shared an anecdote about telling his 27-year-old daughter that he was leaving his post at Pepsico for the CEO job at Target. She was very excited, but quick to add, “Dad, my friends just don’t talk about Target like they used to.”
Now, a little over a year into his tenure, Cornell was happy to share that Target’s pedestrian traffic is back to wear it was —over thirty million guests per week! — sales have increased for three consecutive quarters, stock is trading at an all time high, and Target’s e-commerce business is growing at twice the rate of its competitors. “Whatever happens in the boardroom, it always comes down to what our customers are saying,” said Cornell. “The only thing that’s clear to me is that in the US, people still love to shop.”
First, more flexible formats — especially in cities.
The classic Target store is big. Big enough to house apparel, housewares, electronics, a little bit of everything — consider this the Target we know and love. Over the last year or so, however, Target has identified several new areas for growth in urban areas. “Chicago might seem like one city, but it actually is made up of seventy-seven neighborhoods,” said Cornell. The problem with putting more stores in urban centers, however, is that the space to put a full-on Target store is extremely limited. That’s why Target has been experimenting — successfully, as Cornell implied — with TargetExpress and CityTarget stores, featuring condensed merchandise assortments localized for the communities they serve.
Second, Improved in-store merchandising.
“Customers used to come in to our stores and just see racks and racks of hangers.” Enter “Home Innovations,” a new merchandising concept consisting of individual “vignettes” — imagine a picnic table set for dinner, instead of just seeing rows and rows of plates and candlesticks on a shelf. Target has also revamped its mannequin strategy, and Cornell insisted that products shown on a mannequin perform about thirty percent better than if they were just on a hanger. Oh, and Cornell casually mentioned that Target plans on adding a few more visual merchandising experts to its staff — 1,400 of them, to be exact.
Finally, the merchandise itself.
“Our assortment is really one of the secret weapons inside the company,” said Cornell. While he plans on leading a review of what Target is buying, what is performing well, what can be optimized, and what can be eliminated, Cornell did leave a hint that the designer collaborations, like last year’s with Joseph Altuzarra or this year’s with Lily Pultizer, will continue to be a mainstay of Target’s fashion buy.
Ultimately, Cornell gave a convincing speech about why the fashion industry should be keeping an eye on Target. After all, remember the company’s slogan: “Expect More. Pay Less.”
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