How did Target become one of the largest retailers!!
Target was officially born out of a department store named Dayton's, a discount retailer but also a hub for trendy items. In the early 70s, Target started adding more stores to compete with big grocery chains such as Walmart, Kroger, and K mart, today reaching approximately 1800 locations. As the company started picking up the pace, it became a go-to place for shoppers who loved their low-priced fashion merchandise. In the meanwhile, the company was also offering an exclusive collection of clothing and home goods by partnering with some popular designers such as Todd Oldham and Massimo Gianelli.
When the great recession hit the US in the early 2000s, like many other companies, Target became more conscious about its approach in the clothing industry. Thus, it shifted its attention from fashion to essentials. During that time many people were just looking for the best price and couldn't afford to spend on non-essentials. The year 2013 was unarguably the worst for Target, its profits declined by more than a third. The credit card breach at the end of the year was of no help to the company as it affected millions of customers and cost millions of dollars. In a hope to win back customers, it expanded to Canada but the rate of opening the stores was too quick than target could handle and that decision added a huge pile of losses to the company.
In 2014, Target appointed Brian Cornell as the CEO of the company, which turned out to be a game-changer. His experience with working in the retail industry (Sam's club and Pepsico) helped the company stand back on its feet. In February of 2017, Brian mapped out a strategy to spend roughly 7 billion dollars to make some necessary changes to Target's age fleet of stores, by opening new and smaller shops, primarily in college towns, launching new store owned brands, adding more delivery options for customers and improving the website. Under the plan, 2017 and 2018 were investment years and 2019 marked a return to stable growth.
Wall Street wasn't happy with the plan Target was following and investors were skeptical about the company's return. So they started selling their part of the shares. But the strategy seemed to have worked, as shoppers rushed back to the store and it became the destination for cheap trendy items again. Since then, the stock price went up roughly 40% in 2018. Two major factors for Target's success have been its brand new house brands and modern store makeovers. Target has rolled out 17 of its own brands since 2017, some of which have been extremely profitable. It is also back to partnering with designers for home decor and its cloth lineup. Aside from the new brands, its stores have also started to look more attractive and it has lifted sales by around 2-4%. But the retail industry has become even more competitive with online stores such as Amazon pressuring other businesses for speed deliveries. But Target is not far back, it acquired the same, day-delivery service "Shipt" and it had its highest single day of traffic and sales on its website so far on "Prime day". So it says clearly that the "tar-jay" has just started.