In an interview at the eTail West conference in Palm Springs, Calif., this morning, Bruce Starnes, vice president, digital solutions, Target, addressed how the big-box retailer is evolving its business to thrive in a changing retail environment. Starnes was interviewed by Jenny Kaplan, consumer goods reporter for Bloomberg.
On Target’s Digital Strategy
Our overarching goal is to bring joy to our guests’ lives, Starnes said. The role of digital is to support that corporate goal. Starnes identified three ways that Target is trying to do that: bringing its assortment to life; making it as easy and convenient as possible to shop with Target; and using its stores as a hub.
How That Strategy Has Evolved Over Time
“We weren’t that great at digital when we started,” admitted Starnes. “We had to learn it as a traditional retailer. We started having some successes — after a lot of mistakes — and then the company started investing.”
Starnes says that Target now has a modern technology architecture and adopted a lot of best tech methods (e.g., agile). “We’re not catching up anymore, but focusing on what we’re doing to innovate. Digital is now infused in everything we do.”
Pitfalls Along the Journey
The pitfalls occur when we stray from our overall strategy — bringing joy to our guests’ lives, noted Starnes. Target wants everyone in the organization, digital included, to be focused on that one singular strategy.
“The last couple of years, the pitfalls are minor,” Starnes said. “It’s now about adapting and evolving.”
On Target’s Competitive Landscape
“We were very happy with our Q4, and believe retail is very healthy,” said Starnes. “It’s important we know what’s going on with our competition — both main and niche players — but we spend equally as much time on the strategy.”
To that point, Target announced last year that it would invest $7 billion to go after digital, innovation and supply chain.
“Our bet is that consumers still love in-store shopping,” Starnes said. “As their behavior changes, we want to introduce tools and experiences that allow them to use digital. Monitor the competition, but stay focused on what we’re doing. “
Starnes cited an example of this to drive home his point: roughly 50 percent of Target’s online orders are shipped from its stores, and that number jumped to 70 percent in last year’s fourth quarter.
On M&A Activity
We would only look to that route if it would further our strategy, said Starnes, who cited Target’s acquisition of Shipt last year as an example of a strategic purchase that made sense for the retailer.
“Shipt is 100 percent focused on our strategy of being convenient to shop,” noted Starnes. “It has shared values with Target, and already had been working on the technology and services we wanted to implement. It goes right into the work that we’re trying to do … just got us there faster.”
Target has been aggressive with its rollout of Shipt to its stores, and has seen great adoption from customers. The retailer’s goal to roll it out to all stores by the end of 2018.
On Acquiring and Developing Talent
“There’s less and less talent out there since the economy is growing, which is a good thing,” Starnes said. “Target is passionate about being part of the Twin Cities community — bringing in talent and developing it.”
For example, Target partnered with Techstars, a startup accelerator, to create a retail accelerator program in Minneapolis. In addition to developing tech talent, Target is looking to source it from unlikely sources.
“We’ve put a lot of emphasis on looking for women in technology,” Starnes said. “Our guests skew female, so it makes sense that we have more women in the organization.”
In addition to actively recruiting talent, Starnes believes Target has become a much more desirable place for technology professionals to work.
“We’re no longer in a place of replatforming; we’re in a spot where we’re innovating, which is what they want to do.”
On Future Growth
Starnes said that retail starts with great product. In support of that, Target has invested in its own private-label brands — 12 brand launches in the last 18 months — as well as unique brand partnerships.
“Great experience, great product, convenience being layered on,” Starnes said of Target’s future. “The Target run of the future is giving more control — e.g., drive-up pickup, Shipt delivery of groceries. We’re giving our customers a lot more options.”
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