Target Narrows Merchandise Assortment in Effort to Re-Energize Brand
It's been a tough 10 months or so for department store chain Target. Late last year the retailer announced that it was a victim of massive data breach, one that impacted up to 110 million customers. The fallout from that breach has been severe. Revenues and profits have been down significantly in the months following the breach as consumers have lost trust in the company. In May, Target announced that its CEO, Gregg Steinhafel, a 35-year company veteran, had stepped down from his position, a casualty of the data breach.
For many consumers, Target had lost its way. The man tasked with getting Target back on track, Brian Cornell, who was named the company's new CEO in July, took his first significant steps in that process this week.
At the company's annual fall meeting in its home city of Minneapolis, Cornell announced some sweeping changes for the brand, most notably around its merchandising. Target is shifting its philosophy from being a one-stop shop that offers every type of product a consumer could conceivably ever want and/or need to a company that differentiates itself by excelling in a smaller group of product categories, namely baby products (e.g., diapers, clothing, gear); children's products (e.g., clothes and toys); design and style (e.g., fashion and furniture); and wellness products (e.g., organic foods and natural cleaning products).
"We've got to major in these signature categories and make some bold changes to re-energize those businesses," Cornell said in an interview with The Wall Street Journal. "All categories can't be prioritized the same."
The scaled-down product focus falls in line with Target's plan to open smaller stores in urban areas. The retailer opened its first TargetExpress — the name given to the 20,000-square-foot test store in Minneapolis — in January, and just announced last week that it plans to open two new TargetExpress stores, one in San Francisco's Financial District and the other in Berkeley, Calif. A second TargetExpress store is coming to Minneapolis as well.
"Going forward we have to regain our merchandising authority," Cornell said in an article that appeared in USA Today. "We need to be cool again."
What are your thoughts on Target's plan? Do you think it will help re-energize the once-hot brand, or is it too little too late from a company whose better days are behind it? Let us know by posting your thoughts in the comments section below.