Target Gazes Into the Crystal Ball
November 6, 2012,
By David Gill
At a meeting last month to commemorate its 50th anniversary in business, Target debuted a series of holiday shopping programs, including the new collection under its partnership with Neiman Marcus and the Holiday Price Match program.
As part of this launch, Target and Neiman Marcus announced a partnership with the ABC Television Network. The two retailers will be the sole sponsors of an episode of the series "Revenge," which is scheduled to air on Nov. 11. In place of broadcast commercials, the retailers will work with the "Revenge" creative team to formulate original content incorporating the Target + Neiman Marcus Holiday Collection, which will air throughout the November-sweeps episode of the series.
The Holiday Price Match program offers Target customers the ability to match select online competitors' prices in its stores from Nov.1-Dec. 16. If a shopper purchases a qualifying item from Target in this time frame and then finds it priced less on target.com or on a competitor's site, Target will match that price. Qualifying online retailers include amazon.com, walmart.com, bestbuy.com and toysrus.com.
The meeting also included a look into Target's business from its top executives. Gregg Steinhafel, chairman, president and CEO, said the fourth quarter looks promising. "Consumer sentiment has been staying below prerecession levels, but it is improving," Steinhafel said. "However, we do expect the fourth quarter to be highly promotional and intensely competitive on price."
Target's long-range plan is to achieve $100 billion in annual sales by 2017, including annual same-store-sales growth of 3 percent, Steinhafel said. Kathee Tesija, executive vice president of merchandising and supply chair, said Target has invested nearly $3 billion in store remodels since 2009, with the core of those remodels being the Fresh Grocery section, geared toward driving trip frequency by shoppers.
Steinhafel said nearly three-fourths of the stores will have grocery by the end of this year. "Grocery has not only generated additional sales and profits, but it has also deepened our guests' loyalty to us," he said.
Over the next year, Target will forge ahead with its store remodels, its expansion into Canada and its debuts of stores under the smaller CityTarget format. Steinhafel said future CityTarget openings will include a second store in Los Angeles, a second one in San Francisco and one in Portland over the next 12 months.
Regarding Canada, Tony Fisher, president of Target Canada, said the retailer is on track for the first stores to open next spring. By the end of next year, 124 Targets in Canada will be open, which Fisher said is the largest one-year expansion in the retailer's history. Target Canada is eventually projected to contribute $6 billion in annual sales.