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NEW YORK — Target executives have announced plans to invest $7 billion over the next three years in an effort to win back the hearts of consumers after a disappointing 2016 that saw sales and net earnings fall.
In its meeting with the financial community Tuesday, the retailer’s leaders said Target will “reimagine” about 600 of its 1,800 stores, add more small-format locations, introduce new exclusive brands, and offer more competitive prices everyday.
“We’re investing in our business with a long-term view of years and decades, not months and quarters,” chairman and chief executive officer Brian Cornell said. “We’re putting digital first and evolving our stores, digital channels and supply chain to work together as a smart network that delivers on everything guests love about Target, including more than a dozen new brands we’ll introduce over the next two years. We’re confident our strategy meets the challenges of today and will lead us well into the future.”
Digital sales were a bright spot in the retailer’s fourth quarter results, and Target said its digital sales doubled from 2013 to 2016. As part of its efforts to keep that momentum going, the retailer plans to merge its Cartwheel savings app with its main app, making it easier for consumers to shop and save. In addition, the retailer is enhancing its ability to ship online orders from the backrooms of its stores (all stores will get Ship from Store capabilities by 2019, the company said). Target said it is also rolling out new technology in June that will allow sales associates to help in-store customers who can’t find their size by finding it in the retailer’s inventory, take payment on a mobile point-of-sale system and arrange delivery, all from the sales floor.
The additional of such capabilities will be part of the remodeling of 600 stores that the retailer plans to complete in the next three years. Target also announced that it will open 30 small format stores this year, doubling its presence in dense urban markets and near college campuses. By 2019 the retailer said it will operate more than 130 small-format stores.
On the merchandising front, Target said it is doubling down on exclusive brands after the success of the recently introduced Cat & Jack and Pillowfort lines; the retailer said it will introduce more than 12 new exclusive brands across its apparel and home departments over the next two years.
Finally, the retailer has vowed to focus on having more competitive everyday prices across its entire assortment, instead of relying on promotions to drive sales.
