Target and Barnes & Noble Education team up against Amazon on campus
CEO Brian Cornell on Wednesday noted the success of the retailer’s effort to build more smaller urban stores and said, in the process of transforming more than 600 stores over a three-year period, nearly doubling the number of small formats, its goal is to open more than 100 new units in dense urban, suburban and college campus neighborhoods over a three-year period, according to a transcript of a conference call with analysts from Seeking Alpha.
The company is working with the Barnes & Noble Education retail operation in areas where it isn’t opening such stores, he said. “[T]hose campuses that aren’t lucky enough to have one of the use small format stores with pondering with Barnes & Noble College, which operates nearly 800 college schools around the country to offer the Target assortment [to] more than 5 million students,” he said, according to the transcript. Target's efforts will focus on promoting its brand through Barnes & Noble Education outlets, a Target spokeswoman told Retail Dive in an email.
Barnes & Noble Education serves more than 5 million students and faculty members across 769 campus stores nationwide, according to its website. The company was spun off from the flagship Barnes & Noble bookselling company in 2015.
The news of Target’s tie-up with Barnes & Noble Education comes on the heels of Amazon’s announcement of a new free Instant Pickup service for Prime and Prime Student members, who can order from a selection of daily essentials for pickup in two minutes or less. Amazon also has several campus-based retail operations and pickup services, and the Target effort is an answer to that, according to Jim Fosina, CEO of Fosina Marketing Group.
Barnes & Noble’s education-based operations are strong and that makes this a "nice move" for Target, Fosina told Retail Dive in an email.
Success depends on smooth online and omnichannel opportunities, an area in which Amazon has raised the bar with its nascent Instant Pickup pilot. "My sense is that the only way the program is going to be super successful pivots on the ability for the student to shop online — as they are doing on the Barnes & Noble site — and pick up in the book store," Fosina said. "Online shopping [for] regular delivery really isn't all that special."
Target also must make some overt plays to capture students’ attention, including some purchasing perks at launch to let them know they’re there. That kind of early marketing would also trumpet Target’s cool factor, which college-age consumers prize, he said. "Target partnering with Barnes & Noble stores doesn't create demand," he noted. "It provides an opportunity to build demand. The real success of the program is going to be the marketing effort here to incentivize and win over the student market. We shall see."
- Seeking Alpha Conference Call transcript Target's CEO Brian Cornell on Q2 2017 Results
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