Institution Enterprises | Business Development Roseville
The Short Version:
In this day of Digital Retail, brick-and-mortar stores are going extinct (see: Toys R Us). However, retail super store, Target, is clawing its way back into the fight by getting on-board with the technology curve while leveraging what it has that Amazon doesn’t: REAL ESTATE. Read below to learn how Target is taking business development to new levels.
Today’s consumer is generally characterized as “on-demand”. That means they want their stuff and they want it now. Amazon did the unthinkable when it created one day fulfillment on much of its massive catalog of goods and products. Quite simply, that level of convenience not only blasted Amazon into the profit stratosphere (about $11 billion last year), it changed the way people shop.
Get On Board with Getting Online
Most retailers failed to catch on quick enough, neglecting the power of online shopping. While Amazon continued to raise the bar, malls and retail locations saw the foot traffic and money rapidly decrease, leaving a barren wasteland of once “prime” square footage.
Target, meanwhile, has taken innovative and aggressive steps to not just compete with Amazon, but to take them head-on. The key for Target has been to find creative ways to seamlessly integrate the convenience of digital shopping with the customer experience of shopping in-store.
Digital is Cool, but It’s Also Impersonal
The biggest downside with online shopping is that you can’t physically touch and see the products you are shopping for. This may not matter when it comes to things like laundry detergent. However, this can be a deal breaker when it comes to things like clothes, furniture, and electronics. For many people, it helps to be able to see and try on a jacket before buying…make sure the fit is right, the quality is there, and that it actually looks good on. Additionally, using clothes as an example again, it helps a lot of people to have options right in front of them. Some people enjoy the process of perusing through rows of shirts and dresses, and discovering something they didn’t know they needed or wanted. That is why it is called “shopping” and not “buying”. When stores can create a fun, positive, and relaxed shopping experience, customers tend to spend more, and they come back. Don’t believe that Target has this mastered?? Try looking up “The Target Effect” in the Urban Dictionary…
Business Development Strategies in Action
Target has made a concerted effort to continue to enhance and improve the in-store experience, while also incorporating the convenience of online. For example, in the last year Target has made major changes to try and bring people in, and keep them coming back online or in store, which include:
- store remodels with improved lighting and displays
- improvements to the food court
- smaller retail locations for places like college campuses
- partnerships with brands like Starbucks and Disney
- partnership with Shipt, which provides SAME-DAY delivery for less than Amazon Prime membership
- integrating Drive Up shopping, which fulfills online orders in about an hour, available for pick up, for FREE
- Target Circle membership to personalize the experience even more, while providing shopping incentives and discounts
With over 1,800 store fronts and a hip and modern brand image, Target has seen these strategies pay off to the tune of a 62% increase in stock price since January 2019.
Target vs Goliath
Aside from stock price increases and rapid growth of their online fulfillment silo, there is one major indication that this approach is working for Target: Amazon is changing their strategy.
Yes, its true…while Amazon wrote the book on online shopping, they are also smart enough to realize that you can’t rule the world if you only offer your customers a singular experience. Accordingly, Amazon has started to experiment with small store fronts, and partnerships with retail locations like Rite-Aid to provide same day, in-store pick up. Amazon is feeling the pressure from Target, as well as behemoth Walmart, who is also doing their part to try and bridge the digital and in-store experience for their customers.
Market Change is Exciting
At the end of the day, what is really cool is that we, the consumers, benefit. This type of business competition fosters innovation and change. It is what makes Capitalism great. Businesses have to adapt, and in doing so, consumers generally get a better experience, price, or both. I have no loyalty to Amazon or Target. I have loyalty to convenience, price, and experience. Some days I want to walk around and look at all the pretty things. Some days I want to scroll through pictures on my phone from the bathroom and have something show up magically at my door like it’s Christmas.
The real question is, what can YOUR business do to improve convenience and experience for YOUR customers? Have you considered any outside the box changes? No matter what your business is, you should always be evaluating ways to reach your customer better, and ways to make it easier for them to reach you (i.e. buy from you). Need a fresh set of eyes on your business strategy or operations? CONTACT The Institution today.
Business Development Roseville