Almost ten days ago Minneapolis-based Target executives conducted the Target Corporate Analyst Meeting, during which new CEO Brian Cornell expressed his vision for the future and began mapping out how Target would get there. A mantra-like phrase was repeated throughout the meeting, “Nothing is sacred. Everything is on the table.”
Cornell began with a clear statement of differentiation and change:
“Going forward, we will be a brand that separates itself from others based on merchandising authority and experience, centered on ease and on inspiration. We’ll enable mobile to be the front door to all of Target. Importantly, we’ll reassert our cultural leadership to build unparalleled guest affinity. And we will be a more agile, a more efficient, and a more guest-focused headquarter team.
We know that to compete today, speed and simplicity are critically important. And we are looking at every opportunity to eliminate complexity; facilitate efficiency and accountability; to get our guests what they want and get it out to the market as quickly as possible. We are also being very disciplined in prioritizing our work to accelerate progress in areas that are most important to our guests and to our business.”
“Today’s guests are increasingly families. A growing percentage of them are Hispanic. They are digitally connected. They love to shop, and they demand great value. We refer to this guest as our Demanding Enthusiast, and throughout today’s remarks we’ll show you how we have designed our strategy to serve and meet their needs.”
Cornell then went on to explain the five key priorities Target will support with resources and investments.
- On-demand shopping
- Focus on key categories which account for $20b of annual sales
- Localization & personalization
- New urban formats
- Simplify control & costs
“Now, I want to pause here for a second and talk about food, because I believe we’ve created – perhaps I’ve created – some confusion regarding this important category. And while food itself is not a signature category, it will play a key role in our overall assortment. Food is more than 20% of our business, and it ties very closely to our focus on wellness. Our guest has told us they expect to have food in our stores, but they’d like us to offer more choices that support their wellness goals: more natural products, more organic, more gluten-free. Items that have simple, cleaner ingredient labels.
In addition, the guest has told us they’d really like us to be more specialized in food, inspiring them with unique and differentiated items in our assortment. As a result we believe we have a very clear opportunity to better integrate food into our stores and into our brand, supporting wellness and complementing those style categories. By providing comprehensive solutions for entertainment and occasions, we will help our guests celebrate the joy of food.
With these very, very clear guest insights, we have an idea of where we need to go with food. And I will tell you, the transformational work has already started. We will make progress in this space in 2015, but the biggest changes in our food assortment and presentation will be completed next year.”
Kathee Tesija, Target EVP and Chief Merchandising and Supply Chain Officer later went on to further explain the Target customer:
“Well, by now I hope that you all know it all starts with our guests. We are driving change across our merchandising strategy and we’re putting the guest first, style forward, and making shopping at Target both easier and inspiring.
Now, for a couple of decades the boomer mom was our core guest. She drove a minivan, lived in a nice house in the suburbs, and she wanted it all – kids, career and this crazy schedule that came with it. Fast-forward to today, and that mom is still shopping Target. But our guests are so much more diverse – more Hispanic, more millennial, more urban, more families, more dads, two dads, more kids. They all care about great style for themselves, for their kids, and for their homes. They buy products to express who they are. They care about wellness. And they want it easy and available. They love to shop. They love a great deal. And, most importantly, they love Target.”
So, with an understanding of their focus areas, target customer, opportunities in grocery and the “Nothing is sacred. Everything is on the table” attitude, I have a few questions, thoughts and challenges I’ll share in tomorrow’s post
Don’t miss the second part of “Nothing is Sacred, Everything is on the Table.”