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MINNEAPOLIS — Target Corp. continues to make big changes as it seeks to address recent challenges and regain positive momentum.
Target Corp. continues to make big changes as it seeks to address recent challenges and regain positive momentum.
The retailer’s latest moves include replacing the president of its Target Canada division, realigning its merchandising team in the United States, and assembling a "digital advisory council" of outside tech leaders to help take its e-commerce sales to the next level.
Target also plans to begin testing same-day delivery next month for orders placed on Target.com in selected parts of Boston, Miami and Minneapolis.
The same-day delivery option, available for orders placed before 1:30 p.m., will cost $10. The test comes on the heels of successful launches of in-store pickup and online subscriptions — which Target launched last fall and recently expanded.
"This is all about delivering products and services more flexibly — and serving guests on their terms by providing more options," said Jason Goldberger, senior vice president of Target.com and Mobile. "With these new services and tests like rush delivery, we’re gauging guest appetite and building internal capabilities and technologies that will make Target a leading omnichannel retailer."
Target has been seen as lagging in e-commerce. Although the retailer does not break out its online sales, analysts have estimated that they represent less than 2% of the company’s total sales. By contrast, Walmart’s online sales are about twice as high as a percentage of that company’s U.S. sales.
But interim chief executive officer John Mulligan says that one of his priorities is to make the investments needed to turn Target into a truly omnichannel retailer.
"Guests will be able to interact with us however they choose on whatever channel they prefer," Mulligan contends. "They’ll receive the products they want, when they want them, how they want them. Flexibility is the Target of the future."
Target’s new digital advisor council is meant to help the company accelerate its digital transformation. Its members are Ajay Agarwal, managing director of Bain Capital Ventures; Amy Chang, cofounder and CEO of Accompani, who formerly led Google Analytics; Roger Liew, chief technology officer of Orbitz Worldwide; and Sam Yagan, CEO of the Match Group and founder/CEO of OkCupid.
Target also plans to bolster its internal tech talent pool with the hiring of at least 50 new software engineers this year.
Responding to its disappointing move into its first international market, meanwhile, Target last month replaced Tony Fisher as president of Target Canada, choosing company veteran Mark Schindele, who most recently served as senior vice president of merchandising operations to succeed him. Target also said it would create a new non-executive role as chairman in Canada "to counsel and support the president of Target Canada to ensure all strategies and tactics align with the Canadian marketplace."
In the United States, Target has promoted three senior merchandising executives and realigned its team in a bid to improve performance. Trish Adams has been named executive vice president of apparel and home, Jose Barra has been promoted to executive vice president of essentials and hard lines, and Keri Jones has been made executive vice president of merchandising planning and operations.
"Moving more quickly to bring bold, innovative ideas to the marketplace will help us connect with our guests in more meaningful ways," said Kathee Tesija, chief merchandising and supply chain officer at Target. "By realigning the merchandise team we can better leverage or senior-level leaders, be more agile and deliver for our guests with a greater sense of urgency."
Target said the announcement of the personnel changes was unrelated to its reporting of first quarter results.
Target’s earnings fell 16% in the quarter, partly due to price cuts meant to boost store traffic that has declined in the wake of the company’s data breach. Target’s total U.S. sales increased 0.2% to $16.7 billion in the quarter, but same-store sales fell 0.3%.
