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Target Stores’ annual shareholders meeting, that brief and hardly satisfying attempt to explain the retailer’s surprisingly poor performance in its 2014 fiscal year, is fast fading into memory.
Target Stores’ annual shareholders meeting, that brief and hardly satisfying attempt to explain the retailer’s surprisingly poor performance in its 2014 fiscal year, is fast fading into memory.
Yet one question surrounding it persists: Why did Target, one of America’s truly significant retailers, expend so little time, effort and energy explaining its mistakes to the 100 or so shareholders who cared enough to show up at an aged Amtrak railroad terminal in Dallas to ask for an explanation?
The short answer is this: Target failed to deliver a satisfactory explanation simply because no such explanation exists. Or rather, no explanation is sufficiently plausible to cover the facts.
The facts, briefly, have been by now well documented: Target was victimized by a huge hacking scandal that put a serious damper on the retailer’s holiday sales in the U.S.; it exacerbated the problem by waiting too long to make it public; meanwhile, its Canadian rollout proved to be a major disappointment; finally, these events exerted a major impact in its executive suite, with the result that its chief executive departed amid allegations, recriminations and yet-to-be-implemented programs to right the ship.
All this came together on a Wednesday afternoon in early June in Dallas as Target sought to assure shareholders, analysts and the few media people in attendance that the retailer remains one of the best in the United States, that the recent stumbles were merely aberrations, that the poor Canadian performance was fixable, that chief merchant Kathy Tesija was the person to fix it, and that the hunt for a new CEO was proceeding smoothly, if slowly.
This performance lasted less than an hour, was punctuated by several short speeches, was accompanied by a buffet of soft drinks and snacks, and ended with assurances that a return to prosperity was just around the corner.
The problem was that the presentation wasn’t good enough to justify the need for it. No one doubts Target’s retail prominence. Few doubt the retailer’s ability and determination to restore its performance to former levels. Fewer still doubt the fact that a new chief executive will be in place before too much more time has expired. And very few observers take issue with Target’s position in the marketplace, one that places it as a very real alternative to Walmart’s position as the retail price leader. If you want price, shop Walmart. If you want an enjoyable shopping experience, try Target. That approach has worked well for the Minneapolis-based retailer. By all accounts, it will continue to work in the future.
Yet Target was hardly convincing in its efforts to make that case. Rather, all the elements of its annual meeting appeared to resemble the Western formula, successful since the advent of movies, of the shady cowpoke riding into town under cover of darkness to rustle some cattle, then head out just before the sheriff and the local ranchers mount up. The Amtrak trains for Los Angeles and Chicago left minutes before the Target train pulled out.
The object here is not to denigrate Target or to demean its recent performance. These are difficult days for retailing, as for all U.S. business, and Target is hardly alone in hitting a rough patch. But one secret of being a great business is acting like a great business, especially when the audience knows, or at least suspects, that it’s an act.
This is a time to showcase Target’s many notable achievements, its numerous contributions to retailing, in best-in-class stores, merchandising emphasis, value proposition and service emphasis. It’s a time to speak of its many successes, not its few failures. It’s a time to speak glowingly of the future, not disparagingly of the recent past.
That Target failed to do any of these things, choosing instead to wallow in its recent missteps, says more about Target than does those missteps. Much more. Said another way, if Target doesn’t believe it is a great retailer, who can fault the rest of us for refusing to believe it as well?
