TARGET’S REBOUND
to counter Amazon but often
dumped shares when a retailer
committed money to do so. (In
2015, Walmart announced plans
for big e-commerce investments
and higher wages—and imme-
diately suffered its biggest share
drop in 25 years.)
Little wonder that Cornell’s
$7 billion announcement turned
stock charts red. The price tag
was greater than Target’s net
profit for the two previous years
put together, with no obvious
payoff in sight. Target’s shares
had already been sliding since
Cornell stood under that Jum-
botron; by the time the stock
bottomed out in June 2017, it was
down more than a third.
a
S HE TOURS a renovated
Target store in Westbury,
N.Y., Cornell points
out signs of the redesign plan in
action. The location has lower
shelves, which reduce the sense
of clutter and improve sight lines
so shoppers can see farther into
the store. Wood “grower bins” in
the fresh food area give the gro-
cery aisles an upscale, farmers’-
market flair. And brightly lit dis-
play cases draw the eye to “grab
and go” snacks. It’s all designed
to make the Westbury location a
place shoppers want to go rather
than have to go. “Foot traffic is
the most important barometer of
Target’s health,” Cornell says.
Today, every big retailer seeks
the sweet spot at which in-store
and online shopping feed busi-
ness to each other. At many
retailers, digital business simply
cannibalizes in-store business,
especially when those retailers
neglect the in-store experience.
“Everybody wanted to act more
like a tech company,” Kantar
analyst Laura Kennedy says of
the industry. “Then they realized:
‘We are retailers and have to fig-
ure out how to sell stuff better.’ ”
In that spirit, Cornell wanted
Target to focus on its core busi-
ness and prioritize initiatives that
would pay off quickly. He disman-
5 TARGETS THAT TARGET HIT
Target’s comparable-sales growth has recently outpaced that of rivals like Kohl’s,
Macy’s, and mighty Walmart. Here are some key ingredients of the comeback.
Spruced-up stores:
Improving stores meant
spending billions on es-
sentials like better lighting
and longer sight lines. The
chain even hired “visual
merchandisers” to help it
get more out of manne-
quins and other decor ele-
ments. By the end of 2020,
about 1,000 of its 1,800
stores will be redone.
Integrated e-sales:
Target has upgraded its
locations to handle store
pickup of online orders,
drive-up order collection,
and shipments-from-
store. Stores are involved
in about 80% of Target’s
e-commerce sales, which
makes those sales more
profitable.
Speedier delivery: In
2017, Target bought Shipt
and Grand Junction to
enable faster delivery, now
available from most stores.
Building such capabilities
from scratch would have
taken years, says CEO
Brian Cornell.
Fresher brands: Since
2017, Target has launched
more than 20 new brands,
while ditching older ones
that had lost their luster.
Store brands often earn
higher profit margins, and
hipper ones help draw a
younger demographic.
Selective tech: Early
experiments with innova-
tion labs generated some
impractical, pie-in-the-sky
ideas; Cornell’s team has
focused on projects with a
more immediate payoff.
OUTFOX
THE
WOLVES
OF
WALL
STREET.
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