Target: A Retail

Chain Analysis
PROJECT BY
CONNOR MARSHMAN
 Section 1: A Brief History of TARGET
May 1, 1962: The Dayton Company opens a discount retail chain called Target
Goals for the new retail chain:
Original logo
Fashion for less: Offer the best of the fashion world at a reasonable price designed by
Stewart K. Widdess.
Quality at a discount: Quality store design and quality merchandise at discount prices
The bullseye was
Customer satisfaction: Shopping should be enjoyable for the whole family. Store layouts chosen, because
should have spacious aisles, attractive displays, fast checkouts, and large parking lots. Target hits the mark
1967: Target goes from a regional chain to a national chain. when offering
discount retail,
1979: Target stores achieve $1 billion in annual sales. goods, and services.
1989: Target opens 30 new stores in Kentucky, Tennessee, Georgia, North
Carolina, South Carolina and Florida. It becomes a coast-to-coast retailer.
1994: Target Stores unveils new brand promise Expect More. Pay Less. which
reaffirms the chains commitment to offering high value for consumers. Debuted in 1999,
Bullseye the dog
1999: Target moves onto the world wide web with Target.com. Bullseye the dog was a runaway
it debuted as a brand mascot. marketing success.
He has starred in
2007: Target donates more than $3 million per week to local communities to
support education, arts, social services, and volunteerism. advertisements and
red carpet events.
2012: Target and fashion designer Neiman Marcus team up for a clothing line.
2015: The CVS Health Pharmacy comes to Target stores.
(Target through the years, 2017)
Section 2
TARGET : The Strategic Plan
Location, Facilities, and Retail Image
Locations
- 1,800 stores in 49 US states
(Hawaii and Alaska not
pictured)
- Global locations in India
Facilities
- Racetrack layout has one
main aisle circling the store with
additional aisles running through
the center and the perimeters.
-A simple layout and uncluttered
aisles make it easier to find what
you need.
Retail Image
-Recognizable bullseye logo and
dog
-Color palette: red, black, grey,
white
-Emphasis on fashion, design,
and quality
(Then & Now: Target's Store Design, 2017)
Customer Base and Target Market
Customer Base
Female: Targets base shoppers are 6063
percent female.
Younger: 5862 percent of Targets shoppers are
between the age of 18 and 44.
Higher income: Individuals 25-34 who shop at
Target make $12,000 more a year more than
those shopping at other stores, with an average
annual income around $65,000.
White and Hispanic: Target shoppers are 60%
white, as of 2016 ~20% are Latino/Hispanic and
climbing.
Target Market
Spread more into Hispanic community with
Spanish language advertising
Urban shoppers: CityTarget and TargetExpress
stores that are small-format for an urban
setting
Invest in digital capabilities to reach out to
more online shoppers
(Average Target Shopper, 2016)
 Competition
-International leader in retail sales
-Combination store: retail and
groceries (similar)
-Walmarts focus is unbeatable low
costs but Targets focus is value for
the price
-Warehouse store: Items are stored
with little focus on in-store aesthetics
like lighting or displays
- Just around the corner: stores are -Emphasis on great fashion at low
stationed conveniently close to cost (similar)
homes for easy access
-Not a combination store
-Small layout makes for quick
shopping and a friendly atmosphere -Has more space for
clothes and accessories
-Greeters and helpful staff
-Clean, brightly lit stores
Merchandising Plan
Target is a combination store that sells apparel, home accessories, appliances, and groceries
Ava & Viv plus size line and
Victoria Beckham line
Designer partnerships
Target has an emphasis on fashion
and they offer exclusive designer
partnerships at stores like Victoria
Beckham, Missoni, and Mossimo.
Skylanders Target exclusive toy and
Adele 25 Target deluxe album
Other exclusives
Target also offers exclusive
products like deluxe music
albums and toys.
Target.com and
The Target shopping app
Multichannel
Besides brick-and-mortar stores,
customers can shop at
Target.com and the Target app
(iOS and Android compatible).
(Designer partnerships, 2017)
Pricing Strategy $$$

The first president of Target, Douglas Dayton, said:

We will offer high-quality merchandise at low
margins, because we are cutting expenses. We
would much rather do this than trumpet dramatic
price cuts on cheap merchandise (Rowley, 2004).
In other words, Target puts value over bottom-
dollar products.
Taking risks: In 2017, Target plans to become more
competitive against Walmart and Amazon.com by
slashing prices on its goods and accepting a
smaller profit margin (Gustafson, 2017).
Target is investing in stores, the supply chain, and
digital technology to streamline and reduce
expenses (Gustafson, 2017).
Marketing Strategy

Upscale discounting: Associating style

and quality with discounted prices or
"cheap-chic"
Devoting more money and energy
toward digital and the Internet where
shoppers are increasingly spending their
time
Personalized content on Facebook and
Pinterest
Offer a hassle-free experience: keeping
stores and website stocked through the
help of digital technology

(Pasquarelli, 2017)
Personnel

Employees are called team members

Supervisors are called team leaders
One Team, One Strategy, One Voice a unified group
of employees
Customers are called guests
Typical jobs at a Target store include: cashier,
customer service, food service, human resources,
electronics team member, apparel team member,
beauty team member, sales floor team member, store
facility technician, cart attendant, and team leaders
(managers)
Target does not support employee discrimination
based on race, color, sex, pregnancy status, gender
identity, marital status, political opinions, religion, age,
disability, sexual orientation, social origin, national
origin or any other characteristics unrelated to an
individuals ability to perform the work required
(Team members, 2017)
 Policies
Hiring Practices:
All facilities have a human resources department and candidates must be approved by human resources.
Age documentation is reviewed, and high-risk candidates are removed.
Discipline:
Target does not employ mental or physical punishment and will not work with vendors or factories that use physical or mental punishment.
Discrimination:
Target does not support employee judgement based on qualities unrelated to their work such as race, color, sex, pregnancy status, gender identity, marital
status, political opinions, religion, age, disability, sexual orientation, social origin, national origin or any other characteristics
Working Hours and Time Off:
There is a 60-hour maximum work week, including overtime, in all facilities.
Workers receive a minimum of one full rest day after six consecutive work days.
If a facility does not meet local laws and corporate requirements, Target will deactivate the facility for a minimum of one year.

Payment of Wages:
Time card and payroll records are reviewed to ensure workers were paid legal wages for all the hours they worked
Wages, benefits and deductions are clearly explained to employees
Workers have access to all of their own records to verify their hours and wages
Workers know who to speak to if they have an issue.

Health and Safety Review:

A in-depth review is conducted on all facilities health and safety practices: fire safety, worker safety, clean facilities, the availability of personal protective
equipment, chemical safety, and proper employee training.
(Labor & human rights policies, 2017)
 Challenges and Outlook

Challenges:
In mid-December 2013, Target data system was hacked and customer information was stolen. Target had to tighten
its security with a $100 million chip-and-PIN-enabled technology system.
(Target through the years, 2017)
In January 2015, Target discontinued operating 133 retail stores in Canada which put out a negative impression of
the company and cost Target $2 billion. Doug Stephens, president of Retail Prophet Consultants in Toronto, said,
"They diminished peoples image of what Target was. They should have done fewer stores, but better stores.

Outlook: (Wahba, 2016)

Shares of the retailer plunged to 2-1/2-year lows in heavy trading

Target expects same-store sales to decline by low-single digits in fiscal 2017
Target is responding to this sales slump by making adjustments:
Push for lower prices to compete with Wal-Mart and Amazon
Aggressive promotions with new brands and investments in technology
Smaller format stores
Better grocery selection (Bose & Naidu, 2017)
 Sources

Average Target Shopper & Customer Demographics. (2016, November 03). Retrieved June 15, 2017, from
http://www.pymnts.com/news/retail/2016/average-target-shopper-customer-demographics/
Bose, N., & Naidu, R. (2017, February 28). Target shares dive on earnings outlook, price cut plans. Retrieved June 15, 2017, from
http://www.reuters.com/article/us-target-results-idUSKBN16719S
Designer partnerships. (n.d.). Retrieved June 15, 2017, from https://corporate.target.com/article/tag/2086/designer-partnerships
Gustafson, K. (2017, February 28). This means (price) war! Target to take prices down to bring back shoppers. Retrieved June 15,
2017, from http://www.cnbc.com/2017/02/28/target-declares-a-price-war-as-it-tries-to-turn-around-sales.html
Labor & human rights policies. (n.d.). Retrieved June 15, 2017, from https://corporate.target.com/corporate-
responsibility/responsible-sourcing/social-compliance/labor-and-human-rights
Pasquarelli., A. (2017, May 19). Inside Target's New Marketing Playbook. Retrieved June 15, 2017, from
http://adage.com/article/cmo-strategy/inside-target-s-marketing-playbook/309076/
Rowley, L. (2004). On Target: How the Worlds Hottest Retailer Hit a Bulls-Eye. John Wiley & Sons.
Target through the years. (n.d.). Retrieved June 15, 2017, from https://corporate.target.com/about/history/Target-through-the-years
Team members. (n.d.). Retrieved June 15, 2017, from https://corporate.target.com/corporate-responsibility/team-members
Then & Now: Target's Store Design Philosophy. (n.d.). Retrieved June 15, 2017, from
https://corporate.target.com/article/2013/07/target-store-design-philosophy-then-and-now
Wahba, P. (2015, January 16). Dumpy locations, empty shelves and poor pricing compared to Wal-Mart doomed Target's efforts in
Canada. Retrieved June 15, 2017, from http://fortune.com/2015/01/15/target-canada-fail/