Target prototype, entrance 1 – Rendering: Target
Will ‘ambitious store redesign’ lift Target to new heights?
Described as its “most ambitious store redesign to-date,” Target is opening a new prototype that addresses both quick trippers and browsers.
Similar to its SuperTarget stores, the prototype has two entrances, each designed to delivery a different shopping experience.
The entrance on the right leads to an “ease” section featuring grab-and-go food, a wine and beer shop, as well as order pickup. Two parking spots outside will be reserved for customers served by employees who will bring online orders straight to cars. Ten-minute parking spots nearby also serve those picking up or just wanting to get in and out quickly.
The entrance on the left leads to an “inspiration” section and features a department store-like focus, displaying categories such as apparel, accessories and home, as well as a CVS pharmacy and a Starbucks with seating. Curved center aisles, instead of squared-off lines, are expected to encourage exploring. LED track lighting replaces fluorescent fixtures and brand boutiques are expected to foster a specialty-store feel with rotating looks.
An area to hold store events will be located between the two entrances.
The first version of the prototype will open in Richmond, a suburb of Houston, in October. Target will incorporate elements in its store upgrades going forward. About 600 of Target’s 1,800 stores are expected to face remodels in the next couple of years. The revamps are part of $7 billion in capital expenditures Target in February said it will spend over the next three years on stores, digital and supply chain.
“Expect lots of flexibility, open sight lines and discovery moments throughout the store,” CEO Brian Cornell on March 20 in revealing the prototype at Shoptalk. “We’re going to take what we learn in Houston to help guide us as we customize and remodel hundreds and hundreds of stores over the next three years.”
- Sneak Peek: Target’s Plans to Reimagine Stores – Target
- Investing to Grow: Target Commits More Than $7 Billion to Adapt to Rapidly Evolving Guest Preferences – Target
- Houston area to get new Target prototype – Houston Chronicle
- Target CEO unveils next-generation store concept – Minneapolis Star-Tribune
- Target’s new dual-concept stores could set it apart from grocers, Wal-Mart, HomeGoods and Amazon – Houston Business Journal
Discussion Questions
DISCUSSION QUESTIONS: What do you think of Target’s prototype for addressing quick trip shoppers as well as those planning a shopping experiences? What should Target do to make the “ease” and “inspiration” sections reinforce each other?
Poll
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
Dave Wendland
Vice President, Strategic RelationsHamacher Resource Group
Target is one of the last places I think of for quick trips — but then Walmart and Kmart are also very low on my list. Does Target think their store look is flawed? We’ve had lots of discussions in this forum that suggest they have pricing, assortment and out-of-stock issues that may be hurting them. If that’s true, a store redesign is not the answer.
Target keeps throwing things against the wall to see what sticks as it lurches from one idea to another, yet its sales and growth are not keeping pace with Walmart and Amazon. What is the essence of the Target brand? How will it keep items in stock? Will it invest in training and retaining employees? Those are the basic questions that Target management should be asking and solving before spending billions of dollars on store redesigns.
There does not appear to be anything revolutionary in the changes Target is planning, but I’ll give them points for effort. What is important is Target’s desire to experiment, test and learn. Ultimately, the goal is to deliver better comp sales and business results, and it will take some time for these changes to have a material impact on the overall business results — I question whether the changes proposed will have the desired impact.
I applaud the design changes to try to differentiate shoppers — much like online does. In certain urban markets I can see this working well. On the other hand, to Stephen’s point — I don’t know that many shoppers who equate a quick trip with Target.
The change at Target is an innovation that is long overdue. However, many other retailers and mostly grocers have tried the “ease” approach and then reverted back to normal grocery shopping as it did not produce the sales expected. The new store design will help Target differentiate itself from Walmart by being a step above in both quality and design. Target needs to be different and that is exactly what is happening here. The inspiration section will do very well and using two entrances is a great and new idea for Target.
There are a number of elements that go into quick trips. The first is finding a parking spot. The layout would seem to address that issue but it will depend on what customers actually do. How many people concern themselves with these spots being “reserved” for the quick shopper when the spaces near the other door are full?
The second element is finding what you’re looking for. As Stephen pointed out, this not only relies on the item’s proximity but more importantly that it is in stock.
Finally, there is the checkout process. Should the checkouts at the quick-shopping end of the store have short lines it will not take very long before customers migrate to this checkout area. This, of course, means they have to be staffed. The Target in our area added a second set of self-checkouts near the entrance on the opposite end of the store from its existing self-checkouts. When I asked why it was not being used the reply was that they didn’t have someone to staff it.
I’m curious to know what customer research or study Target has done to identify these two pain points for their shoppers or, alternatively, for shoppers who do not come to Target. I admire Target’s willingness to experiment but this does seem to be quite a change from most Target concepts I have seen. Based on what we heard last week at ShopTalk it seems Target’s strategy is very near-term focused vs. the long-term focus Walmart is showing us. I suspect this approach of separating shoppers who are on different missions to the store will work well for those two customer types, but I wonder if all Target customers can be placed into those two categories or if a third category is being left out.
I’ll start with some dumb questions: What if you want to enter the “quick trip” side of the store but all of the available parking is close to the “inspiration” side? Do all of the commodity businesses (food, HBA, cleaning supplies and so forth) end up on the “quick trip” side, and what is meant to draw traffic around and through the soft goods side of the store?
I admire Target’s effort to redesign elements of the store lacking excitement, such as women’s apparel and home decor. But surely there is a way to design a store around both convenience and longer shopping trips without creating what sounds like a schizophrenic experience. We’ll all have to see this redesign for ourselves before judging, and I hope Target continues to address its inventory management issues at the same time.
Target is still stuck in the mindset of creating an attractive big box store while the paradigm shifted to omnichannel, payments and beating Amazon. Target does not have a compelling competitive strategy against Amazon and is not working as aggressively as Walmart in terms of buying up next-gen technology such as Jet.com or ModCloth.
Target’s trajectory is looking more like Sears/Kmart as time moves on.
I agree inventory and associate issues plague the chain — the former seems especially inexcusable given the time they’ve had in the market.
That said, if you look at their models for City Target, one can get in and out fairly quickly for essential items. I am actually somewhat bullish on this as more people head online for shopping leaving a smaller pie for in-store experiences. One of the main reasons for in-store is speed of acquisition — Amazon is pushing hard on this but won’t be able to hit the entire population any time soon.
Changing the brand narrative to help people associate Target with “just in time” pickup could be a good foil against Amazon. Combine that with their fairly sophisticated and increasingly good e-commerce presence (including SFS and STS technologies), and the focus on speed and efficiency in their store footprint makes sense to me.
Target’s CEO came out a few weeks ago and stated that they were going to work with their vendors to provide better pricing (“operating margins”) and re-imagine the store. This translates to squeezing their vendors for even lower margins and pricing and merchandising these products on new shelves. Sounds like a race to the bottom!
Target (and every brick-and-mortar retailer!) should be honest with themselves and their vendors. Retail is a consignment business! Create a shopping environment that leverages the “shop-n-shop” concept (it’s working for Best Buy). Target should focus on working collaboratively with existing and new brands to address out-of-stocks and ensure On Shelf Availability (OSA) by implementing an infrastructure that provides visibility of shelf inventory. This infrastructure will allow rapid merchandising of new products and create a viable business model around dynamic planogramming. This will have far more value than squeezing (and alienating!) your vendors for more margin dollars on products that are in the store on consignment in the first place.
Some of the Target stores are looking old, worn and messy. Experimenting with new designs is as important for Target as it is for every other retailer.
Target’s effort is a welcome innovation to reinforce their position as a higher-quality alternative to Walmart. But in order to deliver on this goal, they’ll need to focus on all aspects of the in-store experience — merchandising, check-out, associate compensation and training — in addition to just store redesign.
At Shoptalk, Target’s CEO shared his vision on the company’s prototype store and emphasized the importance of stores in the future of retailing which he described as being “digital.”
The Houston prototype should be a very active learning environment for Target as it journeys further into a digital future. Good store redesigns — done with the consumer in mind — create easier and more enjoyable shopping experiences that drive positive brand connections with customers. From what I’ve seen of this redesign, Target is on the right track.
If the company stopped with just the redesign, though, it would be an incomplete effort. Target also views their future stores as locally-aware, experiential and easily shoppable “distribution centers.” Their ability to manage inventory positions becomes critical delivering the complete package. So while it’s necessary to create excitement, you must ensure that you execute on the basics.
Albert Einstein definitely had it right when he defined insanity as continually doing the same thing expecting different results. I applaud Target’s imagination on this thoughtful design and the experimentation to deliver an experiential store to its guests. The integration of curbside pick-up and quick trip shopping journeys is important.
Of course there is another expression that says, “even if you put lipstick on a pig, it is still a pig.” The proof will be if this new design concept is more than a flash-in-the-pan makeover and instead delivers a truly differentiated experience and begins to transcend all of Target’s consumer touch points. If they can do that successfully and seamlessly, then they may be onto something.
It’s definitely a step in the right direction. A mindset switch for Target will be the fact that stores must drive sales online, which is contrary to the legacy. The other factor in the re-design of stores should be turning them into fulfillment centers as well as CX stops. I didn’t hear much of that from Mr. Cornell, but we need to, especially with Amazon and Walmart’s aggressive push for pickup centers.
I’ve noticed that Target has very quietly been greatly improving their online service. A delivery that in the past would have taken 10 days or more to deliver — inexcusable in this immediate gratification world — was fulfilled by my local Target and was literally on my doorstep the next day. Despite the free shipping and my 5% discount I’d given up on Target online, but tried them again for something I wasn’t in a hurry for. It would behoove them to reach out to the disenfranchised online shoppers and encourage them to try them again.
I’m in agreement with the skeptics who commented before me. Here’s another related thought. Most people use the path of least resistance. Why would we expect shoppers to “get” the two-door option?
Experimenting with the store design before making a store-wide commitment is sensible of course and it provides an opportunity to see any potential flaws. However, it won’t tell Target how good is good, i.e., will the return be worth the investment?
Target guests, like most shoppers, have a number of different reasons for their store visits, which change from one shopping occasion to the next. More than half of the trips to Target are to buy groceries/HBC items, and a smaller fraction are to shop for apparel, home products, electronics, and other general merchandise. When people visit Target to shop for groceries, the most common reason is to pick up a few items quickly or buy routine items that will be used in the next few days. It therefore makes sense to give these shoppers a quick and convenient option for buying what they need. If shoppers have extra time available, they will often browse the other merchandise and make unplanned purchases.
In my research with Professor Neil Morgan at Indiana University, we find that if shoppers are unable to quickly and easily find the products they desire at a competitive price, it drives strong dissatisfaction with the retail chain and reduces store loyalty. On the flip side, stores that perform well on these dimensions, and that provide product assurance and shopping enjoyment, have the highest levels of satisfaction and loyalty. The shoppability leaders include Wegmans, Whole Foods and Publix supermarkets. There are several articles related to this topic in the latest issue of the Journal of Shopper Research.
We’ve seen a lot going on lately around new store formats, focused on omnichannel. IKEA is developing smaller, more local store formats in Europe. Walmart is trialing gas/convenience/online order pick up in Denver and Alabama. And of course Amazon has turned Seattle into an omni-channel petri dish. Target is trying to split the difference between these “ground up” omnichannel efforts and the common “omnichannel after-thought” strategy that defines much of omni-channel today. It’s easy to say “too little, too late,” but who knows? Better to try new things than to try nothing.
10 minute or any other kind of limited time parking isn’t going to work unless it’s policed, which means right off the bat they’ll have an additional expense (with no certainty of payoff).
As for the rest of the design changes: meh. I’m sure there was thinking and research behind it, but then that was true of whatever this replaces (put stuff we want to find quickly near the door … who’d have thought?). Suffice it to say, Target’s problems have little if anything to do with the design of their stores (beyond the simple, unavoidable problem of big stores being inherently unwieldy) and aren’t going to be solved by redesigning them.
First off, can I please say how incredibly out of touch the parking “plan” is? Come on! Telling people where to park without the ability to “patrol” that is herding cats — Not on shopper is going to pay any attention to parking “reservations.”
Interesting that a wine and beer area is part of the “quick” trip side. They MUST have researched that. And what is “grab ‘N go” food? Is this just a convenience store carved out of a Target location? If that is the case, then why not separate the entrances MORE, i.e. at side of the building, so the parking for the “in and out fast” crowd really has potential to be “in ‘n out”?
I agree that they should be complimented on an interesting idea. But I ALSO agree that assortment and in-stock merch should be first priority. Get all the ducks in a row and then look at new approaches for lay-out.
I hope this works for them. I like Target, but there are other things that need to be attended to also….
You need a significant lift in sales to justify that spend! I’m not thinking Target for quick trip, I’m thinking CVS/Walgreens, etc.
Better sight lines sounds like what the office supply/consumer electronic stores did 10 years ago and that didn’t work out that great.
When you are not in charge of your own e-commerce efforts, you need to create a monster like this to address the BOPIS consumer wants. This amounts to putting on a different shade of lipstick and a foundation mask to hide the problems they can’t or wont fix. Like so many other recent brainstorms, Target may never get it right, but they do make a lot of interesting surrealistic decisions.
New store designs are always “fun” but I rarely think make much of an impact especially when you take into account the construction zones that these changes make while in transition. Store design alone will not move the needle.
I was at ShopTalk in Vegas where Target CEO Brian Cornell touted this and other changes. I wrote in my notes “what about the employees?” As a predominately brick and mortar retailer, the number one way they can compete with Amazon is with professional level of service from all of the people in the store. Take a page out of Sephora or the local dedicated mom and pop and focus on the people who can help with the thousands of different products in each category they have.