- Target is ramping up its small-format store expansion. The retailer said in a press release 2020 will mark a record year, with three dozen of the smaller stores planned.
- The retailer is also exploring locations for an even smaller store, a 6,000-square-foot format, about half the size of its other smaller formats. The retailer expects to open the first new store next year. Target said the aim was to reach "even more guests in urban neighborhoods and on college campuses."
- Along with the small store expansion, Target plans to remodel 300 of its existing stores this year, which would bring the total number it has revamped to more than 1,000 by the end of 2020.
In 2017, amid talk of the "retail apocalypse" and "Amazon effect," Target outlined a strategy that ran counter to mainstream and Wall Street logic.
The company unveiled a multi-billion dollar plan to invest in its stores, employees, brands and other nuts-and-bolts aspects of its business — though Target certainly didn't neglect its digital business.
Even there, though, Target made its stores linchpins in its digital strategy, using them as fulfillment centers as well as delivery locations for customers using its pick-up and drive-up services. Those services, along with Shipt, have driven the majority of Target's digital sales, executives said in a recorded presentation Tuesday.
As for the remodels, which cost the company $4 billion all told, they were meant to reinvigorate the shopping experience at Target. CEO Brian Cornell said yesterday that his company's stores "weren't dead — just uninspiring."
In the stores that have undergone the changed layout and sprucing up, sales have increased 2% to 4%, Cornell said. In many cases, SKUs were removed from stores yet customers said they appreciated new categories, he added, implying that the new layouts have done a better job highlighting the stores' merchandising.
And Target's not done. In addition to the remodels planned for this year, the retailer plans to roll out a new electronics department layout and test a new front-of-store layout that includes "fresh flower displays, a curated product assortment, and lower walls and counters to make it easier for team members to offer helpful service to guests," the company said.
The goal overall — with the remodels, the services, the digital investments — is to reach customers wherever and however they want to shop. Executives this week lauded the results, with comparable sales growing for 11 straight quarters and digital comps expanding by more than 20% six years in a row.
"Nobody is doing what Target is doing," Cornell said.