'Our Strategy Is Working:' Target Plows Into the Holidays

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Target's new Herald Square
Target's new Herald Square Credit: Target

It's mere days before the crucial holiday selling season gets underway and Target is rolling full-steam ahead. On Thursday, Brian Cornell, chief executive of the Minneapolis-based retailer, laid out a series of plans for the remainder of the year, based on a gameplan he unveiled in February. "Our strategy is working," he said, speaking from the brand's new 43,000 square-foot small-format store in Manhattan's Herald Square. He noted that traffic, sales and digital growth have all increased in recent months.

Here are some other key takeaways as Target preps for holiday and 2018:

Expect more "Target Run and Done" messaging

Earlier this year, the retailer introduced marketing meant to position it as the place to shop for household essentials like toilet paper and dish detergent. That messaging has resonated, Cornell said, noting that the company will double down on the campaign through the remainder of the year—separate from Target's holiday-focused marketing. "Unlike other years, where we shifted all creative to holiday and style as we go into the holiday season, we're going to continue to remind the guest that we deliver great value in household essentials," Cornell said.

Store remodeling will ramp up

Cornell said in February that the company is investing some $7 billion in efforts that include the renovation of 600 existing stores. Over 70 stores have been remodeled thus far, and by the holidays more than 100 will have been redone. The company is now accelerating its plan—between now and 2020, Target will remodel over 1,000 of its 1,800-unit fleet, while 130 new format stores, including urban locations like Herald Square, will open by 2019. Cornell said that renovated stores have seen a sales lift of between two and four percent.

More delivery and digital rollouts ahead

Cornell said that Target's biggest advantage is its brick-and-mortar store base—which will work hand-in-hand with digital efforts to drive growth. Target began piloting a "Drive up" option in Minneapolis where consumers can order online and have purchases delivered to their car in the brand's parking lot. The effort will expand in 2018. The company's "order online, pickup in store" option is now in all stores, the majority of which will also operate as fulfillment centers during the holiday season. Cornell said that the average basket size for Target customers who use its new same-day delivery option is six times as large as those customers who do not. "Our goal is that we expect to be able to fulfill orders no matter how you want to shop at Target within 48 hours," said Cornell.

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