everybody [in retail]
wanted to act like a
tech company. then
they realized: ‘we are
retailers and have
to figure out how to
sell stuff better.’ ”
LAURA KENNEDY, KANTARtled the team of in-house entre-
preneurs mandated with finding
“moonshot” tech—electronically
lowering the price of an apple as
it aged in a produce bin didn’t fit
Target’s new mold. The new Tar-
get would be less flashy and more
focused. “Sometimes you have to
turn down the volume,” Cornell
says. But it would return to being
a retailer where shoppers wanted
to browse and explore.
Making that happen required
Target to spruce up dreary stores.
The company has executed most
of its renovations on a gradual,
“pardon our appearance” basis,
so it hasn’t had to close locations
outright—thus reducing harm to
cash flow. Linoleum floors are out;
slick display cases for groceries
are in. So are mannequins. Early
in his tenure, Cornell instructed
managers to take a page from
the department-store playbook
and use mannequins to present
apparel. The problem: “We didn’t
know what to do with them,” he
recalls. People with backgrounds
in discount retail, it turns out,
weren’t sure how to optimize the
humanoid sales props. Target
spent tens of millions of dollars
to hire an army of “visual mer-
chandisers” so that, among other
things, the mannequins could
have maximum impact. Cloth-
ing brands like the Goodfellow &
Co men’s line have consequently
thrived because the clothing is
presented in an appealing way,
with items paired to suggest out-
fits rather than folded and stacked
in high piles, as they often are at
rivals like J.C. Penney or Sears.
Store brands, including the
Universal Thread women’s cloth-
ing line, Threshold (home), and
Heyday (electronics), are Target’s
secret sauce. Along with only-at-
Target exclusives made by other
companies, they generate about
30% of sales and a disproportion-
ate share of profits. Low prices on
staples like diapers and detergent
may fill parking lots, explains
analyst O’Shea, but once you have
shoppers on your property, “you
sell them Cat & Jack, which is
higher margin.”
In all, Cornell’s 2017 plan has
included the launch of more than
two dozen brands and the jet-
tisoning of others. Mark Tritton,
the chief merchant Cornell had
poached from Nordstrom a year
earlier, has long argued that
strong brands would lure back
bored shoppers and win younger
ones. Whatever the reason,
Target appears to be regaining a
demographic edge. According to
Prosper Insights & Analytics, the
average Target shopper is 42.5
years old with a household income
of $77,610, compared with 46
years and $64,202 for Walmart.
Target has also shortened
the time it takes to bring new
brands to market, helping the
company more quickly capitalize
on other retailers’ woes. In toys
and sporting goods, Target picked
up customers from bankrupt
rivals like Gymboree, the Sports
Authority, and Toys “R” Us. Three
years ago, the L Brands franchise
Victoria’s Secret announced itWHEN THE
WORLD’S
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