Target shelves robot store and secret e-commerce start-up
Target is cutting back on its innovation project plans to concentrate more on its core business operations after coming off a holiday selling season when same-store sales declined 1.3 percent.
The Minneapolis Star Tribune reports that among the projects being shelved are Goldfish, a secret e-commerce start-up that got the go-ahead a year back, as well as a store of the future concept using robots that was slated for construction soon. Other projects, while not scrapped, are being cut back as the chain seeks to get its business turned around.
Any decisions made, according to Dustee Jenkins, chief communications officer and senior vice president of communications for Target, were just part of the normal ongoing management of the company’s business.
“We regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources,” said Ms. Jenkins in a statement. “We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities.”
Target, according to the Star Tribune, refused to comment on specific cuts while maintaining it has identified areas such as digital, merchandising and supply chain where it can continue to innovate to grow its business.
Among the few relatively bright spots for Target in November and December was the chain’s digital sales, which grew 30 percent. The gains, unfortunately, came with a cost as free shipping offers and promotions drove down profits.
While Target is pulling back on its innovation agenda, mega-competitors Amazon.com and Walmart are upping investments in a wide variety of projects intended to create further separation from the rest of the retailing pack.
- Target cuts innovation initiatives, including secretive Goldfish start-up – Star Tribune
- Target Just Made Some Tough Choices on its Future – TheStreet
- Target Reports November/December Sales and Updates Fourth Quarter 2016 Guidance – Target Corporation
- Will online sales redeem struggling brick and mortar retailers? – RetailWire
DISCUSSION QUESTIONS: Are you confident that Target’s leadership has the right strategic plan in place to turn the business around? What is your reaction to the chain’s plan to cut back on its innovation agenda?