Target case Analysis

1. 1
The TARGET Experience
ETL Softline Consultants
Marissa Pettineo
Gabriella Kirkpatrick
Brooke Tuttle
Emily Cooke

2. 2
Susan at TARGET
“How do we improve Susan’s
in-store experience, while
increasing her trip frequency
and basket size?”

3. 3
2. Vision
3. Analysis
5. Implementation
6. Outcomes
1. Key Issues
4. Recommendations
AGENDA

4. 4
Reduced number of
potential sales due to high
online competition
Key Issue #1 Key Issue #2
A BULLSEYE VIEW
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s
Lack of a seamless in-store
shopping experience that
integrates new technology

5. 5
Innovative shopping
experience
Vision
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s
Easier accessibility to
product information
A unique floorplan to create
an immersive experience

6. 6
Target Sales
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s

7. 7
Target’s Average Guest
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s

8. 8
Social Trends
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s
Smart phone use in
The United States

9. 9
Word of Mouth Influence
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s
90% 68% 84%
consumers read
online reviews before
visiting a
business/purchasing
products
consumer purchases
are impacted due to
online reviews
people trust online
reviews as much as a
personal
recommendation
How does Target compete with Amazon?

10. 10
Internal Strength
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s
Increase in online sales
Increased growth of 42% online sales in Q2 of 2018

11. 11
Social Trends
Key Issues Vision Analys
is
Recommendation
s
Implementation Outcome
s
Growth in active-wear
industry

12. 12
Implement new digital
platforms in stores
• Q.R. Codes
• iPads
RECOMMENDATION 1
Recommendation
s
Implementation Outcome
s

13. 13
Excite guests with exclusivity
RECOMMENDATION 2
• Increase amount of
exclusive partnerships
• Increase promotion of
private label
Recommendation
s
Implementation Outcome
s

14. 14
Implementation Steps
PHASE 1
Software Development
• Team of 10 software developers to enhance
app
• Link QR codes to reviews/Instagram posts
• Implement in test markets
Order iPads to Stores
• 1,800 stores
• 5 per store for each clothing department
Implementation Outcome
s

15. 15
Implementation Steps
PHASE 2
Sign Contract with Adidas
• 6 month contract development
• Exclusive clothing “athleisure wear” line with
Target
R&D for Adidas Line
• 5 month design and sourcing materials
Implement Team Member IVS
• iPad Value Signing
• Showcase fashion trends, reviews, new lines on
iPad
Implementation Outcome
s

16. 16
Implementation Steps
PHASE 3
Adidas Line Launch
• 1 Month line launch (until sell out)
• In front section (boutique style)
Private Label Promotions
• “Money Saving Month” Calendar
of discounts
• Increased social media posts
directly referencing labels
Implementation Outcome
s

17. 17
Expected Outcomes
20% 20% 84%
Increase Trip
Frequency
Increase in
Sales
24%
Increase in
Basket Size
$2,875,160,000 Estimated
Increase in Sales
For Apparel & Accessories
QR Software & App Costs
$7,000,000
iPad Costs
$1,800,000
Adidas Line Costs
$5,150,000
Private Label Costs
$250,000
*$179,697,500 potential
increase in
sales from private label
calendar promo
Total Costs $14,200,000
Outcome
s

18. 18
Conclusion

19. 19
Target Sales (In Millions)

20. 20
Target Sales Segmented

21. 21
Target Weekday Guest Visits

22. 22
Target Competitive Advantages
• Inviting atmosphere that makes shopping fun and enjoyable
• Rebranded to attract a more affluent population.
• Cheap and chic
• Popularity with the younger generation.
• Free branding and promotion by influencers and celebrities love Target.
• Internet memes

23. 23
Statistics in Regards to Waiting times
Percent of people who would rather use self checkout kiosks (Retail Customer Experience):
• 66 percent of shoppers preferred self-service and self-checkout is by far the most preferred solution
Long line influence on retail store choice
• 43 percent of consumers said long lines would affect their decision to shop a particular retailer in the
future. (Retail Wire)

24. 24
Target Online Sales
Increased growth of
42% online sales in
Q2 of 2018*

25. 25
Smartphone Use in the U.S.

26. 26
Implementation Timeline

27. 27
Word of Mouth Marketing
(Reviews)
• 90% of consumers read online reviews before visiting a
business/purchasing products. (2016)
• Online reviews have been shown to impact 67.7% of purchasing
decisions. (2015)
• 84% of people trust online reviews as much as a personal
recommendation. (2016)

28. 28
Collaboration statistics
• Target announced that it would be collaborating with Lilly
Pulitzer
• On Sunday, April 19, 2015 Target stores across the U.S.
opened their doors at 8:00am to stampedes of women who
had been waiting in lines for hours
• Only 3 hours into the launch, the collection had all but sold
out in stores and online
• Target's e-commerce site and mobile app both crashed due
to an extremely high demand of the collaboration

29. 29
Comparative Competitive Revenues

30. 30
Sales &
Costs

31. 31
Porter’s 5 Forces
Threat of substitutes: MODERATE
Online shopping is growing and offers a more convenient way of shopping compared to traditional brick and mortar
retailers.
Target has increased their online presence to compete with Amazon and is working to create a complementary in-
store experience that will drive foot traffic into the store.
Threat of competitors: HIGH
Other retailers such as Nordstrom, Anthropologie, Lululemon, Gap, TJMaxx, Stitch Fix, Shopbop, Zappo’s and
Tuckernuck also offer a distinct and unique in-store experience.
Target is leveraging Apparel and Accessories to differentiate them from other retailers.
Threat of entrance: MODERATE
Target is currently the second largest general merchandise retailer in America and Target.com is one of the most
visited retail websites.
Threat of buyer power: LOW
Target is committed to providing a one-stop shop experience for guests by delivering differentiated merchandise and
outstanding value with its brand promise: Expect More. Pay Less
Threat of suppliers: LOW
Target has many private label brands. Target is large compared to its suppliers, making it hard for other suppliers to
have much influence.

32. 32
Athleisure statistics
• A recent report by The NPD Group shows that 24 percent of total apparel sales
are made in the athleisure segment.
• According to a new report published by Allied Market Research titled, "Active
wear Market by Product and Fabric: Global Opportunity Analysis and Industry
Forecast, 2017-2024,"the global active wear market was valued at $ 351,164
million in 2017, and is expected to reach $ 546,802 million by 2024, registering a
CAGR of 6.5 % from 2018 to 2024.

33. 33
SWOT ANALYSIS
STRENGTHS WEAKNESSES
• Have economies of scale which allow them to offer low
prices because of their lower variable costs. 3x2=6
• Have very diversified products which helps reduce
economic risk and also provides a one stop shop for
customers. 2x3=6
• Target introduced the REDcard Rewards loyalty
program in 2010 which has really strengthened
customer loyalty. 2x1=2
• Strong record data 1x1=1
• Well established brand that is highly respected.
2x3=6
• Viewed as a fun place to shop and bring the family.
1x2=2
• Their brand image has increased over the years and
have gone into a more affluent segment. 2x2=4
• Not as large and as diversified as competitors which
makes it harder to stay competitive. -2x1=-2
• Takes a long time to adjust to changes -1x1=-1
• Target has a large dependence on foreign countries
which causes heavy risk if the foreign countries
experience change in economy or politics. -3x2=-6
• In 2013, they experienced a data breach where lots of
important information leaked. -3x1=-3
• Target has suffered from many lawsuits which causes
requires them to put in a lot time and money towards
lawsuits and away from business. -3x2=-6