Today’s tech-savvy consumers demand omnichannel shopping experiences, even if they aren’t familiar with the word “omnichannel.” The brands who are not only surviving, but thriving, in today’s complicated retail landscape understand how to bring online elements to in-store shopping and vice versa. And Target is one of them.
Target has had a rough few years, following the 2013 data breach where 40 million consumers’ information was compromised. However, investing billions of dollars in digital gave the brand a great 2017, increasing sales by 10%.
It looks like Target plans to continue that momentum—and stay competitive with Amazon and Walmart—by investing heavily in its omnichannel offerings. Or as CEO Brian Cornell said at the company’s annual investors meeting in March, “This strategy is going to make Target America’s easiest place to shop.”
Here are three ways the company is chasing that goal:
1. Diverse delivery options
In February, national courier Dropoff found that 47% of consumers have paid extra for faster delivery over the previous year. Fast shipping is crucial for retailers and free shipping doesn’t hurt, either. According to Walker Sands Communications’ Future of Retail study, 90% of consumers consider free shipping to be the biggest online shopping incentive.
Over the last year, the company has tested numerous programs. Target Restock delivers household essentials and groceries to consumers the next day, while the December acquisition of next-day delivery company Shipt promises same-day delivery. And for those consumers who would rather pick up in-store, there’s also a Drive Up service where employees load online orders into customers’ cars. Target plans to expand all of these to more store locations throughout the year.
The brand ships from 1,400 different stores in addition to online fulfillment centers. “Flow centers” integrate the two, streamlining delivery as much as possible. The first flow center is currently being tested at a store in New Jersey. So far, it’s helped increase sales while significantly reducing backroom inventories.
2. Physical location makeovers
Target has been making stores more omnichannel, planning to remodel 1,000 of them by 2020. That includes everything from wider aisles to arming employees with devices that allow customers to make purchases anywhere. At the same time, Target is expanding its small-format store concept, which originated on the University of Minnesota’s campus in 2014. Having proven more profitable per square foot than regular-sized stores, there will be 130 of them by 2019.
In the spirit of makeovers, Target also announced its augmented reality beauty studio last week. To start, Target Beauty Studio will be available in 10 stores, as well as its desktop and mobile sites. Consumers can virtually test products to see how they look with their individual complexions and skin types. A concierge service also provides advice and product recommendations via text messages and chatbots.
Like LVMH, Target launched an incubator program last year to leverage tech talent. As part of Target Takeoff’s second year, 10 startups will develop beauty-focused innovations from the brand’s Minneapolis headquarters.
3. Improved discovery
One characteristic of Target’s “reimagined store” is two separate entrances. One focuses on convenience, with easy access to in-store pickup counters and groceries. The other is aimed at those shoppers (my mom) who are “just going see what they have.” That side of the store features apparel and home goods merchandise displays, aiding inspiration and discovery.
Extending that online is a feature similar to Neiman Marcus’ Snap. Find Shop. Consumers can search photos they take and see a curated collection of similar products. The difference is that instead of requiring a separate app, this visual search happens on Pinterest, a platform 200 million people already use every month.
Target is the first U.S. retailer to bring Pinterest Lens into its own channels, starting with the registry. “This Pinterest partnership quite literally helps us shorten the distance from when our guests have an idea to when they’re ready to make a purchase,” CMO Rick Gomez said in a statement.
