MINNEAPOLIS, MN – Target Corp. Chairman and CEO Brian Cornell and members of his leadership team recently unveiled new strategies to transform the company.
“Following a thorough, strategic review of our business, coupled with a careful evaluation of the changing retail landscape, we have identified the key initiatives that will put Target on a clear path to growth,” said Cornell.
He added, “We’re focused on our future and building the capabilities that will take us further, faster. Redefining Target will require a renewed emphasis on prioritization and innovation, and above all else, putting our guests first in everything we do.”
To start, the retailer will be revamping its grocery sections for millennials. Target will be focusing on fresh produce, fresh meat, beer and wine, snacks and more to differentiate it from other stores and draw in younger shoppers, according to the Wall Street Journal (WSJ). Though these selections won’t be given more shelf space, there will be a renewed push on merchandising.
Fixing grocery, which accounts for about a fifth of Target’s $73 billion annual sales, is a priority for Cornell, and this is not the first grocery push for the company. Target has previously pledged to add more organic, natural and gluten-free foods to its selection.
Cornell is also working to find a new head for its grocery business. According to the WSJ, Target is looking to bring in an executive with grocery experience from elsewhere, and Cornell, whose background includes Pepsi, Safeway and Sam’s Club, will personally be interviewing candidates in the coming weeks.
Another part of the plan is to lay off several thousand employees. According the WSJ, most of these job cuts will come from Target’s Minneapolis headquarters, where it has 13,000 employees.
The retailer expects that over the next two years, it will cut costs by $2 billion. That money will be used to pay for investments in technology, the development of smaller urban stores as well as upgrades to food, apparel and home goods.
Other key initiatives that Target laid out include:
- Taking a channel-agnostic approach to growing its business, driving a total Target experience across stores, online and mobile.
- Style, Baby, Kids and Wellness are being prioritized and will be the merchandise categories Target is know for – the retailer will invest in these areas with a focus on newness and differentiation.
- Grocery is being repositioned to deliver a more compelling and appealing shopping experience.
- Creating a more guest-centric experience by tailoring its assortment and offering more locally relevant products, with demographics, climate, location and other guest-led factors driving merchandising decisions.
- Target’s store opening plans will increasingly focus on new, more flexible formats like TargetExpress and CityTarget, which cater to guests in rapidly-growing, dense urban areas.
“While we’re in the early days and there’s no doubt that transformation can be challenging, we’re taking the steps necessary to unleash the potential of this incredible brand,” said Cornell. “I’m encouraged by our early momentum, and am confident that by implementing our strategy, simplifying how we work, and practicing financial discipline, we will ignite Target’s innovative spirit and deliver sustained growth.”
When Cornell was speaking about early momentum, he was referencing the retailer’s latest financial release where it beat its 2014 forecast with strong sales growth. Target reported 2014 sales of $21.8 billion for the quarter, a 4.1% increase over $20.9 billion last year.
With all of these changes in the works coupled with these financial gains, we will be keeping an eye on Target. Stay tuned to AndNowUKnow for the latest on this and other retailers across the industry.
