Year-to-date, the company made eight million parking lot deliveries, most of which were done in two minutes or less. Target is in a unique position in the retail industry as it has stores across the country, in both urban and rural areas and neighborhoods ranging from high to low income. Its range of product categories and price points also make it a rare breed in brick-and-mortar retail. All that means its same-day fulfillment options are especially valuable, since Target can appeal to a wide customer base.
Those same-day fulfillment options are also especially useful during the holiday season when time is critical for shoppers searching for gifts, giving the company strong momentum going into the key fourth quarter. In addition to e-commerce, Target has also had a lot of success with private brands, as its in-house lines generally afford higher profit margins than mass-market brands -- and when successful, their exclusivity can serve as a way to bring shoppers back to the store. CFO Michael Fiddelke explained the strategy on the earnings cal l, saying, "On the owned-brand front, it really starts with providing product that we think the guests will respond to, and so curated owned-brand products that drive repeat purchase and loyalty over time.
So we start there, and when that owned-brand product goes well, it translates favorably to the gross margin line. In the third quarter, the company said that apparel and accessories sales jumped by double digits, a contrast with competitors like Kohl's and Walmart that have struggled in apparel.
Management also credited its "distinctive owned brands" for the strong performance. Apparel isn't the only area where Target is counting on private brands to deliver growth.
Grocery is one area where Target has historically lagged behind its rivals, so the new private brand could help it gain share in an important category that drives high-frequency visits. Perhaps more than any other retailer, Target has succeeded at capitalizing on new opportunities in the market, filling in the gaps as other retailers close stores and go out of business and responding to changing consumer demands.
Its omnichannel push is one example, and its success in apparel seems to have come in part from taking share from its struggling rivals. However, the best example of this strategy may be in toys, as the company has seen significant growth in that category following the Toys R Us bankruptcy last year.
Toys helped propel Target's growth over the holidays last year, and this year, it's making another big push in toys, selling 10, new and exclusive items. Target has also teamed up with Toys R Us and will be fulfilling the revived toy brand's orders through its website.
It's launching 25 Disney shop-in-stores and selling exclusive toys from Star Wars and Frozen. Their answers were insightful, surprising, and, well, downright creepy. Why You Love Target: It just gets you. Have you ever strolled past the home goods aisle at Target on your way to buy something boring like a pack of pens, and you realize you want every single item on display?
Why You Love Target: It makes you happy. This is where Target nails it, connecting with the consumer on a subconsciously pleasing level, Loranger says.
If your emotions are manipulated, then your behavior will also change, influencing what consumers choose. However, there is something to be said for a store that is well-lit and spaced out, and plays bumping good music that makes you want to shop just a little bit longer than you originally intended. And generally, the more time you spend in a store, the more money you drop. Joe Hancock, a fashion merchandising professor at Drexel who formerly worked for Target corporate, gave us the inside scoop on how the retailer separates itself.
Furthermore, Target adapts to modern demand, which sees customers become increasingly impatient waiting for their online orders. When comparing stock levels, Target offers a significantly lower breadth of merchandise than Walmart or Costco; however, they put more effort into specific departments offering higher-quality goods. Target is most known for the sale of household essentials, home decor, groceries including beverages, dry perishables, fresh, and frozen foods , electronics, appliances, apparel, and baby products such as toys of which are sold under a Target-owned brand.
Unique brands generate more appealing margins than big third-party retail brands. National brands generate significant sales. Therefore, Target has focussed much of its efforts on building brands that gain recognition from its expansive customer base. The driver behind private labels is the cheaper price point and differentiation from competitors.
Target is also known to partner with designers and known brands to launch products exclusively found at target. Employee-friendly organizations often excel while positively influencing the overall customer experience.
Human resource management is another key competitive advantage used by Target; really honing in on employee management to elevate company performance and maximize employee satisfaction.
The company views employees are holders of the company, explicitly recruiting employees that seek progression. Operating a solid marketing campaign is an essential source of competitive advantage for any retail brand. Additionally, its movement into populated areas depicts the store as better quality earning organic attention.
In fact, Target has undergone at least 3 makeovers in the last three years, perfecting its logo and color scheme. Not only does the red differentiate Target from its competitors, but it adds character, modernity, and flair. Target is exceptionally skilled at wielding new marketing means using major social media platforms such as Twitter to post announcements linking customers to limited collaborative collections.
Instagram is increasingly used by retailers and bloggers, helping them decide what to purchase before heading to a store or even buying straight from the app! It also works wonders for general or seasonal campaigns.
Not only does this help Target compete with the likes of Amazon, but it changes consumer perception of discount brick and mortar stores. You may also find prestigious Apple mini-stores working inside Target stores which, again, instantly attracts higher-paying customers. Its small-scale stores covered in distinctive red selling privately labeled and exclusive brands truly sets Target apart from its competitors.
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