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Target Marketing Case Project


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The charge from Target was to deliver recommendations for improving the relationship between Target's retail stores and online website. In addition, shopping behaviors of the cross-channel consumer …

The charge from Target was to deliver recommendations for improving the relationship between Target's retail stores and online website. In addition, shopping behaviors of the cross-channel consumer were to be considered while developing recommendations. Each MKT 301 class was broken into 7 groups to deliver their own report. After these reports were delivered, leaders from each group formed a 7-person team, who created a presentation for Target executives. This presentation is from Spring 2010 MKT 301 Section B at Miami University.

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  • Target has numerous strengths but the ones above are key things that represent Target ’s highly-reputable brand. Weaknesses are the areas we feel Target needs improvement. Our recommendations for change have been generated from these weaknesses. Target needs to create ways to attract the cross channel shopper and create a shopping experience online that coincides with the shopping experience in-store.
  • There a many opportunities for Target, however many pertinent to our study have to do with improving the online side of Target ’s business. The competition is focusing on e-commerce and Target must not fall behind, but instead move ahead. Wal-Mart takes many customers away from Target, because they are #1 in the industry.
  • キ  According to Target, their cross channel shopper is typically wealthier, younger, and more experienced online than their pure online or offline counterparts. o Where, they may buy in-store when they want to physically see the item or ask questions, otherwise they will buy the item online. o Cross-Channel shoppers typically spend more than single channel shoppers (sometimes 50% more or higher). o Cross-Channel shoppers will pay a premium for convenience with 殿 lmost 40% of cross-channel shoppers willing to pay more for products that save time and hassles and are more likely to use self-service technologies � o Price, immediacy, and information is important to the cross-channel shopper as they demand � the right product at the right price � キ  According to a report by Forrester Research, cross-channel shoppers are typically wealthier, younger, and more experienced online.
  • Customers will see the value the Expect More, Pay Less ” card has, and will want to get one. Already loyal Target customers will also benefit from the rewards which will ensure their loyalty. By focusing heavily on online coupons through the use of the “Expect More, Pay Less” customer account page, customers can log on using their card number and pick through coupons they like. Advertising the online coupons to customers will create more people getting on and will allow Target to decease the number of print coupons that they print, saving on costs. A much larger representation of Target ’s customers will be using this risk free reward card, than Target’s Visa and REDcard, allowing Target to keep track of shopping trends in-store and online. Customers will use their card online which will allow Target to figure out who is their online and cross-channel shoppers. The national average of coupon redemption rates is 1%-3%. With the Kroger Plus Care, Kroger has tracked specific shopping trends which they have taken advantage of by creating coupons that are very accurate to the needs and wants of their customers. They have approximately a 20% coupon redemption rate and even at times as much as 50%. Data will help Target implement more efficient in-store point of purchase advertisements and shelving arrangements, displays, and end-cap space. Benefits of online coupons: Gets customers on which could lead to more online sales. Email is extremely cheap compared to snail mail Print Coupons sit around and get lost Survey of 23 Target shoppers, 17 said that a loyalty card would increase Their shopping at
  • Unlike Target ’s current cards, this new one will have no credit or debit card contract. It’s a risk free incentive for customers to shop at Target and When they sign up: Name, Birth Date, Sex, Email, Phone (optional). Rewards could be based off a point system. For every dollar spent customers would earn 1 point. After 1,000 points, customers could receive 10% off a day of shopping or $10 gift card. Customers can create an account online on the “Expect More, Pay Less” page with their card number, which will allow Target to send them coupons based on their shopping trends. Customers will begin to receive coupons via email that match their needs and desires. Customers will also be able to track their cumulative point count on their account.
  • キ  Kiosks will be in the format of an interactive, touch-screen device. キ  The Kiosks will be located in high-volume driving areas for Target such as clothing, electronics, home care, and seasonal departments キ  The kiosks will allow the customer to browse through additional merchandise that is offered online. キ  To continue, the kiosks will include a 菟 urchase now � option, which allows the customer to order the item right there. o This helps to eliminate lag time between seeing the item in-store, going home, remembering the item, and consequently ordering the item. o This also prevents customers buying from the competition. キ  In addition, the kiosks will illustrate where an item (both in-store and online) is if it is out-of-stock. o The Kiosk will provide additional information regarding items that are out-of-stock by giving directions to the store the phone number, where the customer can call ahead and reserve the item for convenience. キ  The kiosks will assist cross-channel shoppers by allowing additional merchandise to be highlighted and purchased, which draws attention on and drives volume.
  • Local Store View is an innovative 3D shopping experience, which will add excitement and variety to the online shopping experience. Local Store View will provide a familiar, yet unique shopping experience for Target customers, and extend the superb Target store experience into the online arena.
  • Instead of shopping online in a linear fashion (search -> results -> product page -> check out), Local Store View will truly be a 3D experience. Users will be able to move through their local store, with the same floor layout and format, in an intuitive manner including smart features similar to a Google Earth or Google StreetView setting – including: drag & drop, smart zooming, panning, etc.
  • Local Store View will be a point of differentiation in the increasingly crowded online shopping landscape, and a new way to win business and attention from competitors. We recommend that this feature be rolled out slowly, and in select areas only at first (largest markets, or most competitive markets) Overall, we recommend that Local Store View be developed in a manner similar to a Google Labs project – not the highest internal priority, but a source of creativity and innovation for Target developers to work on in their in-between time.
  • Possible Ideas Fulfillment Trucks can make deliveries to Distribution Centers, then Distribution Centers can deliver Fulfillment merchandise to stores. OR some or all Distribution Centers can carry all the same merchandise as the Fulfillment Centers, therefore when an order online wants to be picked up in-store, the Distribution Center will be notified and can deliver it. Fulfillment Centers will still operate all e-commerce transactions and order processing. Stores like Best Buy offer this service to it ’s customers which has helped their overall customer satisfaction. Target prides itself on customer service, yet they are lacking in this area. Target will increase traffic and purchasing online with this service while also generating foot traffic in-stores. Target ’s services must cater the desires of the customer. Having Free Return Shipping labels would solve the problem of customers returning online merchandise to stores, and the associated problems with storage & and reselling.
  • Buy Online, Pick-Up In-Store is a service that is becoming more and more popular. Customers convenience as well as savings and this is a great way to meet their needs. More retailers are adding this service, putting Target farther behind the competition.
  • After the implementation of our recommendations, Target will have a better understanding of their shoppers and who their cross channel shopper is. The more data generated the more effective in-store advertising, shelving arrangements, display locations, etc. will be. User-friendly website matches the in-store style aligning both shopping experiences. Connecting Online and In-Store shoppers to drive sales for both together. Integrated Distribution and Fulfillment Centers will allow for everything sold online to be sold in-store and vice versa. Buy online, pick up in store will become logistically feasible, which will help add to Target ’s superior customer service.
  • The biggest opportunity for Target after the implementation of our recommendations is to expand their business internationally. Open stores in areas that are experiencing tremendous growth such as China, Brazil, India, etc. If the grocery business does well for Target they should look at implementing it in all their stores. By adding premium divisions of grocery like a deli, organic and fresh foods can open Target up to a new market and many consumers. Social Media is always changing and is extremely popular with the youth. Target must stay “connected” to this demographic and try to increase the number of younger loyal shoppers at Target. The competition is always focusing on e-commerce and Target must not fall behind, but constantly stay ahead. Target must be on the lookout for new technology and stay inline with consumer trends, and adapt accordingly. U.S. economic conditions can negatively impact Target sales. Government taxes are on the rise for the private sector, which hurts stores like Target, causing them to find ways to supplement the costs. Amazon and Ebay are a head of the game. Target needs to figure out how they constantly compete with such powerhouses.
  • Transcript

    • 1. Target Courting Cross-Channel Shoppers Section B
    • 2. Executive Summary
      • Eight Recommendations
        • Customer Loyalty Program
        • Kiosks
        • Improve Site Aesthetics
        • Local Store View
        • Interactive Customer Service
        • Enhance Employee Knowledge
        • Promote the Website
        • Integrate Supply Chain
    • 3. SWOT Analysis Before Recommendations
    • 4. Internal
      • Upscale S ophisticated P roducts
        • Affordable Chic Clothes : Fashionable/T rendy
      • Humanitarian Efforts: Donates R oughly $3 million per W eek to
      • C ommunity G rants
      • Customer Service: Guest S atisfaction Increases Each Year
      • Strong P ositioning : “Expect More, Pay Less”
      • Online Aesthetics
      • Cross Channel Shopper is not Emphasized
      • No L oyalty C ard : Hard to K eep T rack of C ustomer B uying
      • Logistics/Supply Chain
        • Cannot Buy Online and Pick up In-Store
        • Distribution and Fulfillment Centers not Integrated
      SWOT: Before Recommendations
    • 5. External
      • THREATS
      • Rapid G rowth of I nternet R etailing : Amazon .com &
      • Significant D ecline in M arket can N egatively A ffect Target ’ s
      • P roductivity
      • Competitors A dapting Target ’ s use of P opular B rands T akes
      • A way the C ompetitive A dvantage : Kohl ’s and K-Mart
      • Growth: Increased online shopping
      • No Current L oyalty C ard
      • There ’s an Increasing Number of Cross Channel Shoppers
      • Online Customer Service: Instant Messaging &
      • Recommendation /Feedback Page
      SWOT: Before Recommendations
    • 6. The Target Guest
    • 7. Target Guests
      • Young, well-educated, moderate to better income families who live active lifestyles
        • Median age = 46 years old
        • Median HHI = $55,000
        • 43% have completed college
        • >50% employed in professional or managerial positions
      The Target Guest
    • 8. Cross-Channel Shopper Profile
      • According to Target, their cross-channel shopper is typically wealthier, younger, and more experienced online than their pure online or offline counterparts
      • Typically will spend more than single-channel shoppers
        • Sometimes up to 50% more
      • Price, immediacy, and information are important to the cross-channel shopper
      The Target Guest
    • 9. Customer Loyalty Program
    • 10. The Need for a Loyalty Card
      • Incentive Generates and Keeps Customers
      • Useful Data Collection
        • Identifies Customer Purchasing Trends
        • Help Identify the Cross Channel Shopper
        • Effective, Targeted Promotions
      • Higher Coupon Redemption Rates
        • 1%-3% Average vs. 20%-50% for Kroger
      • Decreased Advertising Costs
      Customer Loyalty Program
    • 11. “ Expect More, Pay Less” Target Loyalty Card
      • Risk Free, No Hassle
      • Collect Points to Get Rewards
      • Customize Coupons Online
        • “ Expect More, Pay Less” Account Page
      • Loyalty Number: Keep Track of Points Online
      Customer Loyalty Program Visit to log in using your card number to track points and receive customized coupons. 082752736
    • 12. Kiosks
    • 13. Target Connect Kiosk
      • An interactive, touch-screen device
      • Located in high volume-driving areas:
        • Clothing, electronics, home care, and seasonal departments
      • Allow Target customers to:
        • View additional merchandise offered online
        • Purchase merchandise and send it to the store
        • Illustrate where an item is and whether it is in stock
    • 14. Improve Site Aesthetics
    • 15. More Branding on
      • Target Bullseye logo
      • Red & white color scheme
      • Evoke the same aesthetic of their advertisements
      Improve Site Aesthetics
    • 16. Align the Website with the Target In-Store Feel
      • Less clutter and additional information
      • Less links to click-through to find products
      • More visual and simple
      Improve Site Aesthetics
    • 17. Local Store View
    • 18. Local Store View
      • Innovative 3D shopping experience
      • Add excitement and variety to online shopping
      • Provide familiar, yet unique shopping
      • Extends Target store experience to the online arena
      Local Store View
    • 19. Point of Innovation
      • No longer shop in a linear fashion
        • (search -> results -> product page -> check out)
      • Users able to move through their local store
        • Same floor layout & format
      • Smart features similar to Google Earth or Google StreetView
        • Drag & drop, smart zooming, panning, etc
      Local Store View
    • 20. Local Store View
    • 21. Recommendation and Rollout
      • Will become a point of differentiation in the increasingly crowded shopping landscape
      • New way to win business and attention from competitors
      • Feature should be rolled out slowly
        • Begin with select areas only (largest or most competitive markets)
      • Developed similar to a Google Labs project
        • Not highest internal priority
        • Source of creativity and innovation for Target developers
      Local Store View
    • 22. Interactive Customer Service
    • 23. Instant Messenger
      • Correspond directly and instantly with Target representatives
      • In-store customer service available online
      Interactive Customer Service
    • 24. What Does this Mean for Target?
      • Strengthens customer service
      • May provide insight to customer complaints/problems
      • Closes the gap between in-store and online service/consistency
      Interactive Customer Service
    • 25. Enhance Employee Knowledge
    • 26. Enhance Employee Knowledge
      • Target team members are the front-line to the customer, facilitators
      • “ Promote continuous learning in a diverse environment where high-performing teams excel”
      • Consumer trust and loyalty
        • Depends on operational competence of employees
      • Implementation
        • Training and Education
        • In-house/External
        • Varying levels of effort
      Enhance Employee Knowledge
    • 27. Promote the Website
    • 28. In-Store Ads
      • Floor decal
      • Exit door stickers
      • On grocery carts
      • Check-out counter belts
      • End of aisle displays
      Promote the Website
    • 29. Print Ads
      • Offer additional savings by purchasing online
      • Distribute in:
        • Newspapers
        • Magazines
        • Mailers
      Promote the Website
    • 30. Mailed Coupons
      • Scratch-off coupons
        • Redeem code online to find your discount
        • Customer could win between $5 and $500
      • Coupons could be used online or in store
      Promote the Website
    • 31. Supply Chain
    • 32. Integrating Distribution and Fulfillment Centers
      • Buy Online, Pick Up In-Store Service
        • Increases both Online and In-Store Traffic
      • Target Will be able to Accommodate Customers Returning Online Merchandise to Stores
      • If No Integration, Then Target Should Consider Putting Free Return Shipping Labels in with all Online Orders
      Supply Chain
    • 33. Supply Chain
    • 34. Target Mystery Shopping
    • 35. Mystery Shopping Findings
      • Attractive products at fair, discounted prices
      • Exceptionally clean store
      • Larger aisles
      • Great customer service that knew where to find items
      Target Mystery Shopping
    • 36. SWOT Analysis After Recommendations
    • 37. Internal
      • Loyalty Card: Data Gathering on Customer Shopping Trends
        • Better understanding of the Cross Channel Shopper
      • New Website Design: Easy Navigation, Simple Layout
        • Virtual Shopping Experience
      • Customer Service: Online Instant Messaging Feature & Kiosks
      • Supply Chain: Integrated Distribution and Fulfillment Centers
      • Increased Market Share
      • High Costs: Loyalty Card, Kiosks, Virtual Store, etc.
      • More Complex Operations Lead to More Complex Problems
      SWOT: After Recommendations
    • 38. External
      • THREATS
      • Other Companies Integrating Online and In-Store Channels
      • New Technology could make Target ’s processes obsolete
      • Significant D ecline in M arket can N egatively A ffect Target ’ s
      • P roductivity
      • Increasing Governmental Taxes
      • Online Competitors are Extremely Good at What They do
      • Expansion: Can Become an International Company
      • Implementing Grocery Departments in all Stores
        • Fresh Foods, Organic, Deli
      • Increase Mobile Barcode Scanning Capabilities
      • Social Media Promotions
      SWOT: Before Recommendations
    • 39. Thank You Section B Benjamin Dunn Jonathan Evans Kristen Gould Dana Mitchell Lindsay O’Hara Kiersten Stanley Daniel Sauter