Target Corp. is accepting applications and nominations for a new startup accelerator dedicated to wellness-focused retail businesses.
Founders of the 10 startups selected for the Takeoff program will spend a week in May in Target's native Minneapolis to network, meet with mentors and “talk all things retail,” culminating in a July 25 “demo day” for participants to pitch their products and solutions to leaders in retail. Target is accepting Takeoff applications until the end of this month.
Target previously partnered with incubator Techstars for its Techstars Retail program, which had its first retail technology accelerator at Target’s Minneapolis campus last year and last month opened the application process for a second round.
Target recently shuttered its mysterious “Goldfish” tech project and has otherwise shaken up its tech operations, but it’s sticking with incubator TechStars for a series of startup accelerators dedicated to retail. Last summer, 10 Target + Techstars startups — which spanned a range of technologies including machine learning, crimefighting wearables, supply-chain solutions and employee scheduling services — worked with Target executives as well as visiting business and tech gurus to drill down into what they need to keep or throw out as they develop and scale their ideas. Three months of intensive effort culminated in a “Demo Day” at the end of September.
But the startups weren’t the only ones getting an education, according to Target CEO Brian Cornell, who said he admired the founders’ ability to act on their ideas and make swift improvements as they worked to expand their business. “There was a lot I could teach these entrepreneurs, but one of the biggest lessons they taught me was speed,” Cornell said in a recent blog post. “The juxtaposition of our operation and theirs was stark. Startups are measuring time in terms of months-worth-of-funding. I saw, first hand, that we moved too slowly, too often.”
Now Target appears to be sharpening that focus even further, a likely reflection of how it values its wellness-based merchandising. “We want to support the next generation of entrepreneurs creating accessible, affordable, inclusive and inspirational wellness products and services,” the retailer said on its blog.
Wellness products have been strong performers for Target even as it has struggled with sales declines and failed to gain traction with its grocery effort. Differentiation has always been important to the big box retailer, which can’t compete on price in the face of stiff price competition from bigger rival Wal-Mart Stores and, increasingly, Amazon and its marketplace.
Target last month reported same-store sales in the November/December holiday period fell 1.3% and total sales fell 4.9%, which the company says reflects the impact of the December 2015 sale of its pharmacy and clinic businesses to CVS as well as a “highly promotional competitive environment.” But same-store sales in the retailer’s signature categories – including wellness, beauty, baby and toys – grew nearly 3 percentage points faster than the company average.
Target also recently announced a major effort to promote transparency in labeling of chemicals in consumer products and to decrease the use of harmful chemicals in products and operations throughout its supply chain. To help meet those goals, Target says it expects to invest up to $5 million in green chemistry innovation by 2022.
"[I]t's important that retailers continue to budget and put priority on the innovation stuff," Ryan Broshar, managing director of Techstars Retail (the startup accelerator in partnership with Target) told Retail Dive earlier this week. "It's really easy to get away from it when things are bad.”