{"id":15322,"date":"2016-11-16T23:12:49","date_gmt":"2016-11-17T04:12:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/targeting-a-new-future\/"},"modified":"2016-11-16T23:12:49","modified_gmt":"2016-11-17T04:12:49","slug":"targeting-a-new-future","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/targeting-a-new-future\/","title":{"rendered":"Targeting a New Future"},"content":{"rendered":"

\u201cRedefining Target will require a renewed emphasis on prioritization and innovation, and above all else, putting our guests first in everything we do.\u201d [1] \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0-Brian Cornell, Target Chairman and CEO, March 3rd<\/sup> 2015<\/p>\n

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Target\u2019s core purpose is to \u201cfulfill the needs and fuel the potential\u201d of its millions of annual visitors, and over the past 20 years, Target has done that by delivering luxury products at an affordable price, wrapped in an excellent customer store experience. However, in the past decade, the dramatic rise of e-commerce, with over 250% growth in the past 10 years, combined with a steady decline in store traffic, which has been declining at a rate of 5-10% per month for the past 2 years, has transformed the retail landscape and pushed Target to rethink its business to ensure it continues to meet customer expectations.<\/p>\n

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Figure 1: Retail Traffic and Sales Per Shopper Monthly Growth [2]<\/figcaption><\/figure>
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Figure 2: US E-Commerce Sales Growth 2005-2015 [5]<\/figcaption><\/figure> <\/p>\n

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Historically, Target has focused on delivering an upscale shopping experience at affordable prices using a strategy that relied upon design partnerships with famous designers, such as Philippe Starck and Michael Graves, and creative advertising campaigns [6]. Its operating model centered on the in-store experience, providing customers with a clean and well-maintained store, positive shopping atmosphere and shorter wait times at the check out counter. With the shift to e-commerce, Target has invested heavily in expanding its capabilities to operate in an omni-channel world, which has a significant shift in its operating model, but little has changed in its core customer promise. In 2015, Brian Cornell, Chairman and CEO of Target announced a plan to invest $2 billion <\/strong>a year on technology and supply chain projects starting in 2017 in order to achieve a goal of 40% online sales growth per year [1]. Target is specifically focusing on two things in the digital space:<\/p>\n