The document proposes opening 3 Target Life stores and 4 pop-up stores in Manhattan to increase Target's growth and penetration in the dense and affluent area. It analyzes Manhattan demographics and income levels, and recommends improving the brand experience through localization, customization, and digitization. An ROI of 33% and NPV of $15 million is expected assuming the Manhattan profit stream is 10 times the average US store.

1. F. Adames | R. Juri | S. Khan | S. Kumar | F. Miranda | M. Preciado
TARGET LIFE
The new experience

2. EXECUTIVE SUMMARY.
Aspiration:
 Increase growth and penetration in Manhattan, NY., by applying a sustainable solution that can be
progressively applied to other downtown areas of dense mega cities.
Recommendation:
 Open 3 Target Life stores in Midtown, Upper East and Upper West Manhattan respectively
 4 Pop-up stores in high foot traffic areas
 Improve brand experience through localization, customization and digitization to drive Omni-channel fulfillment
Benefits:
 ROI of 33% and NPV of $15 M is expected from the project assuming that profit stream from Manhattan is 10X
the Avg. US store (Breakeven 7.52X).

3. OUR GUESTS.
$85,000.00
$90,000.00
$95,000.00
$100,000.00
Midtown
Manhattan
$85,000.00
$90,000.00
$95,000.00
$100,000.00
$105,000.00
$110,000.00
Upper West
Side
$85,000
$90,000
$95,000
$100,000
$105,000
Upper East Side
Median Income of Households 25-44 Average Household Expenditure
REFER TO EXHIBIT 1-2
Manhattan is above national average ($51,100) in
annual expenditure which makes it attractive through our
target guest segment.

4. IMPROVE & INCREASE BRAND EXPERIENCE.
 Social generation
 Adventure seeking
 Convenience
Boutique Store
Experience
 Integrate a boutique store experience in Target
Life for each category
 Localization of store format and assortment in
Manhattan neighborhoods
 Augmented Reality pop-up stores
 Omni-channel fulfillment from each store
 Social generation
 Technology oriented
 Rely on reviews
 Influence other generations
In-Store Digitization
 Touch screens to design their space
 Touch screens in trial rooms and style section
 Like discounts & shopping
 Family & values driven
Advanced Loyalty
Program
 Reward guests for actions and engagement
 Customized perks for in-store, mobile and online
purchases
GUEST CHARACTERISTICS SOLUTIONS TACTICS
REFER TO EXHIBIT 3

5.  3 Target Life stores in Midtown, Upper East and Upper West
Manhattan.
 Target Life store size is 30k sq. feet.
TARGET LIFE.

6.  Build a playroom for kids and comfort café for parents/ mothers
BABIES & KIDS:
IMPROVE IN-STORE EXPERIENCE.
BOUTIQUE STORE EXPERIENCE

7.  In-store Farmer’s Market
 Have ‘specialized’ local chefs prepare small dishes for
guests to try & buy the ingredients in store
 Ready-to-eat packaged foods & ingredients in racks
 “Be a Master Chef” allows guests to view and try the
Chef’s special ingredients and supplies used for the day
GROCERY:
IMPROVE IN-STORE EXPERIENCE.
BOUTIQUE STORE EXPERIENCE

8. • Sell FitBit through Target Life
• Grant guests rewards for doing healthy activities and tracking through FitBit
• Barcode scanner of Fooducate calls up information on nutritional value not shown
on food label
• Grant reward points for buying products rated and recommended by Fooducate
• Guests can track workouts from all fitness apps and wearable devices (FitBit to
RunKeeper) in one place and earn reward points on it
• Guests can encourage their friends to set and reach their fitness goals
• Beacons can be used to suggest related health products for Target Life guests
WELLNESS:
INCREASE GUEST ENGAGEMENT.
BOUTIQUE STORE EXPERIENCE REFER TO EXHIBIT 5

9.  Display model rooms (3m x 3m) with Home Brands
STYLE / HOME FURNISHINGS:
IMPROVE IN-STORE EXPERIENCE.
BOUTIQUE STORE EXPERIENCE

10. TOUCH SCREENS:
IMPROVE IN-STORE EXPERIENCE.
 Guests can browse the whole catalogue in-store near every isle
and for every category
 The screens will also include product ratings and reviews from
other guests
 Guests can rate the products themselves immediately
 Incorporate “Design your space”, “Create your look” and “Be a
Master Chef” into all platforms (mobile, online & in-store touch
screens)
IN-STORE DIGITIZATION

11. “Design
your
space”
“Create
your
look”
Target
App
REFER TO EXHIBIT 6IN-STORE DIGITIZATION

12.  Rewards for your Family. Eg: Grant “500 reward points” for family member’s birthdays.
 Earn reward points from “FitBit”, “Fooducate” and “Everymove” and redeem for any
Target Life purchases.
 Reward points for every dollar spent either in-store, online or mobile. Guests will receive
a voucher of $50 when they reach 5000 points.
GUEST LOYALTY PROGRAM & REWARDS.
ADVANCED LOYALTY PROGRAM

13. AUGMENTED REALITY POP-UP STORES:
CREATE BRAND PRESENCE.
 Pop-up Target Life will allow guest to experience
Target in different locations around the city
 Target Life hosts
 Pop-up locations can target on-the-go guests
 Tablets with access to catalogue of Target products
to buy instantaneously
 Orders in pop-up store for delivery only
 Use as a pick-up locations in partnership with
Curbside

14.  One underground Target Life store in Midtown:
 Partnership with MTA to renovate abandoned subway
station
 Creating brand presence by integrating iconic Manhattan
history
UNDERGROUND TARGET LIFE.
PROS
 Prime location
 High foot traffic
 Enhance brand
personality
 Increase exposure by
boosting experience
CONS
 Dependency on MTA
 Unknown timeline and
cost
REFER TO EXHIBIT 4

15. An ROI of 33% and NPV of $15 M is expected from the project assuming that profit
stream from Manhattan is 10X the Avg. US store (Breakeven 7.52X).
LEASING THE STORE SPACE IS THE VIABLE OPTION TO
ENTER THE MANHATTAN MARKET.
REFER TO EXHIBIT 7-9

16. SUMMARY.

17. THANK YOU.

18. 18%
8%
15%
9%
18%
32%
22%
47%
27%
40%
8% 9%
19%
31%
22%
53% 52%
56%
52%
54%
0%
10%
20%
30%
40%
50%
60%
Manhattan Downtown
Manhattan
Upper East Side Midtown
Manhattan
Upper West Side
Population Demographics
Household with Children
Married Couples
Total labor force participation rate
Female Population
EXHIBIT 1. DEMOGRAPHICS

19. $87,123
$174,004
$90,472
$95,744.00
$93,449.00
$85,590
$106,130 $102,527
$89,626.00
$104,427.00
$0
$30,000
$60,000
$90,000
$120,000
$150,000
$180,000
Manhattan Downtown Manhattan Upper East Side Midtown Manhattan Upper West Side
Median income of households 25-44 Average household expenditure
EXHIBIT 2. INCOME/EXPENDITURE

20. Superior Inputs
Superior
Collaborators
Superior
Data & Insights
Superior
Offering & Branding
Superior
Target
Sources of competitive advantage
Product Leadership
“Best Product”
Operational Excellence
“Best Total Cost”
Customer Intimacy
“Best Customer Relationship”
Functional
Emotional Experiential
EXHIBIT 3. IMPROVE & INCREASE BRAND EXPERIENCE.

21. London
• Transport for London is inviting companies to transform abandoned tube stations.
• Network worth of abandoned stations is approximated at 3.6 B pounds.
• Old London Ground company working on repurposing Stations and tunnels into clubs,
hotels, retail stores, malls and tourist attractions.
Paris
• Museum D’orsay repurposed train station into an art Gallery
• Subway stations being repurposed into public attraction in planning phase
New York
• High Line Park in Manhattan, community and government project to use Highline as a
Park, initial costs were 150 million. High community support and being extended with
theaters and other outlets
Strong potential: Below Waldorf Astoria
EXHIBIT 4. UNDERGROUND TARGET LIFE

22. EXHIBIT 5. MILLENNIAL GUESTS ARE HIGHLY RELIANT ON
MOBILES WHILE SHOPPING IN-STORE AS WELL.
Beacons:
Low-cost hardware with low-
energy Bluetooth connections to
transmit messages or prompts
directly to mobiles.
 Greet guest with personalized messages.
 Prompt about latest promotions and products based on
search history.
 Drive mobile purchasing based on promotions or prompts.
 When guests pick up in-store, beacons can be used to
transmit information on related products for additional
purchases.
 In-store navigation and product reviews based on real-time
analytics.

23. EXHIBIT 5A.

24. Design Your Space
• Allow guests to design their room with Target home brands on touch
screens in-store
• The space will be the same as the model room in store
• Drag & drop the products on a blank space to design their own
• “Add” all the liked products directly to the cart (Mobile app + Online
account)
• Order products in-store/ mobile app and “Add” delivery to home
Create Your Look
• Allow guests to browse different patterns, sizes or colors of an
apparel
• Guests can pair one product with another (Eg: One shirt with
different denims or jewelry)
• Guests can also do this for babies and kids category
• In trial room and near the apparel section, guests can create their
look and browse through related products
TARGET
APP
EXHIBIT 6.

25. EXHIBIT 7. RENTING
Outflows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Store 1
Building/store rent -$2,238,000.00 -$2,305,140.00 -$2,374,294.20 -$2,445,523.03 -$2,518,888.72 -$2,594,455.38 -$2,672,289.04 -$2,752,457.71 -$2,835,031.44 -$2,920,082.39 -$3,007,684.86
Set up cost -$900,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Store 2
Building/store rent -$2,238,000.00 -$2,305,140.00 -$2,374,294.20 -$2,445,523.03 -$2,518,888.72 -$2,594,455.38 -$2,672,289.04 -$2,752,457.71 -$2,835,031.44 -$2,920,082.39 -$3,007,684.86
Set up cost -$900,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Store 3
Building/store rent -$2,238,000.00 -$2,305,140.00 -$2,374,294.20 -$2,445,523.03 -$2,518,888.72 -$2,594,455.38 -$2,672,289.04 -$2,752,457.71 -$2,835,031.44 -$2,920,082.39 -$3,007,684.86
Set up cost -$900,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Pop ups
Ten Pop up stores -$200,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Rent Pop up stores -$50,000.00 -$51,500.00 -$53,045.00 -$54,636.35 -$56,275.44 -$57,963.70 -$59,702.61 -$61,493.69 -$63,338.50 -$65,238.66 -$67,195.82
TOTAL OUTFLOWS -$9,664,000.00 -$6,966,920.00 -$7,175,927.60 -$7,391,205.43 -$7,612,941.59 -$7,841,329.84 -$8,076,569.73 -$8,318,866.83 -$8,568,432.83 -$8,825,485.82 -$9,090,250.39
Inflows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Store 1
Profit flow from store 1 $0.00 $3,819,240.00 $3,933,817.20 $4,051,831.72 $4,173,386.67 $4,298,588.27 $4,427,545.92 $4,560,372.29 $4,697,183.46 $4,838,098.97 $4,838,098.97
Store 2
Profit Flow from store 2 $0.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00 $3,819,240.00
Store 3
Profit Flow from store 3 $0.00 $3,819,240.00 $3,933,817.20 $4,051,831.72 $4,173,386.67 $4,298,588.27 $4,427,545.92 $4,560,372.29 $4,697,183.46 $4,838,098.97 $4,838,098.97
Pop ups
Profit flow from Pop ups stores $0.00 $254,616.00 $262,254.48 $270,122.11 $278,225.78 $286,572.55 $295,169.73 $304,024.82 $313,145.56 $322,539.93 $322,539.93
TOTAL INFLOWS $0.00 $11,712,336.00 $11,949,128.88 $12,193,025.55 $12,444,239.11 $12,702,989.09 $12,969,501.56 $13,244,009.41 $13,526,752.49 $13,817,977.86 $13,817,977.86
NET CASH FLOWS -$9,664,000.00 $4,745,416.00 $4,773,201.28 $4,801,820.12 $4,831,297.52 $4,861,659.25 $4,892,931.83 $4,925,142.58 $4,958,319.66 $4,992,492.05 $4,727,727.47

26. EXHIBIT 8. ACQUIRING
Outflows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Store 1
Building/store Investment -$60,000,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Store 2
Building/store Investment -$60,000,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Store 3
Building/store Investment -$60,000,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Pop ups
Ten Pop up stores -$200,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Rent Pop up stores -$50,000.00 -$51,500.00 -$53,045.00 -$54,636.35 -$56,275.44 -$57,963.70 -$59,702.61 -$61,493.69 -$63,338.50 -$65,238.66 -$67,195.82
TOTAL OUTFLOWS -$180,250,000.00 -$51,500.00 -$53,045.00 -$54,636.35 -$56,275.44 -$57,963.70 -$59,702.61 -$61,493.69 -$63,338.50 -$65,238.66 -$67,195.82
Inflows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Store 1
Profit flow from store 1 $0.00 $3,819,240.00 $3,933,817.20 $4,051,831.72 $4,173,386.67 $4,298,588.27 $4,427,545.92 $4,560,372.29 $4,697,183.46 $4,838,098.97 $64,983,241.93
Store 2
Profit Flow from store 2 $0.00 $3,819,240.00 $3,933,817.20 $4,051,831.72 $4,173,386.67 $4,298,588.27 $4,427,545.92 $4,560,372.29 $4,697,183.46 $4,838,098.97 $64,983,241.93
Store 3
Profit Flow from store 3 $0.00 $3,819,240.00 $3,933,817.20 $4,051,831.72 $4,173,386.67 $4,298,588.27 $4,427,545.92 $4,560,372.29 $4,697,183.46 $4,838,098.97 $64,983,241.93
Pop ups
Profit flow from Pop ups stores $0.00 $254,616.00 $262,254.48 $270,122.11 $278,225.78 $286,572.55 $295,169.73 $304,024.82 $313,145.56 $322,539.93 $332,216.13
TOTAL INFLOWS $0.00 $11,712,336.00 $12,063,706.08 $12,425,617.26 $12,798,385.78 $13,182,337.35 $13,577,807.47 $13,985,141.70 $14,404,695.95 $14,836,836.83
$195,281,941.9
3
NET CASH FLOWS -$180,250,000.00 $11,660,836.00 $12,010,661.08 $12,370,980.91 $12,742,110.34 $13,124,373.65 $13,518,104.86 $13,923,648.01 $14,341,357.45 $14,771,598.17
$195,214,746.1
1

27. EXHIBIT 9. ASSUMPTIONS
Total Sales in 2013 $72,596,000,000.00
Sales by Sq Ft 254,243,000.00
Sales by Sq Ft $285.54
Assumed Faltor in Manhattan (X) 10
Sales by Sq Ft in Manhatan $2,855.38
Total Profit in 2013 $1,971,000,000.00
Profit per Sq Ft $7.75
Store 1
Store cost (sq ft) 30,000.00
Store 2
Store cost (sq ft) 30,000.00
Pop-up stores
Number of Pop Ups stores 4
Cost of a Pop Up Store -$50,000.00
Por up Size (sq ft) 500
Sales by sq ft (proyected 2015) $309.00
Sales by sq ft in Manhattan (2015) 3090
Net Profit Margin 4%
Profit by sq ft in Manhattan (2015) 123.6
Income/cost growth rate 3%
Commetcial Rent price per Sq FT in manhattan $74.60
Pop up Rent price per Sq FT in Manhattan $25.00

28. POLITICAL
SOCIAL
• Health regulations, taxes on food products impacting sales or margins for retailers.
•High sensitivity to economic cycles (taxation, Interests rate and economic growth)
•Strong competitive landscape requires differentiation to survive.
•Labor cost is the biggest operating expense.
•Less disposable income shifting consumption from luxury items to value brands.
•Target owns 86% of the building where the store is located so its exposed to real estate
fluctuations.
• Health awareness and Organic trend.
• Bulk Shopping to One stop shopping.
• Social media influence and mobile shopping
ECONOMIC
PESTLE ANALYSIS.

29. TECH
ENVIRON.
LEGAL
• Online trend where differentiation is key.
• Self-service checkout points.
• Mobile and Digital tools.
• Any legislation that affect price.
• Reduction of carbon footprint.
• Minimize waste.
PESTLE ANALYSIS.