WSL Future of Health Event

America’s premier discounter

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If success in retailing was measured in terms of creativity and the excitement of the shopping experience, the largest retail companies wouldn’t necessarily be the most successful.

If success in retailing was measured in terms of creativity and the excitement of the shopping experience, the largest retail companies wouldn’t necessarily be the most successful.

Rather, the most effective retailers would be those consumers most relied on to provide an exciting, serendipitous shopping experience, one that succeeds by offering the customer products, services and values she never dreamed she’d find before entering the store.

Costco brought the concept of retail excitement to a level of excellence perhaps never previously reached in the annals of U.S. retailing. Who, after all, hasn’t been mesmerized by the idea of the shopping experience metamorphosing into a “treasure hunt,” the concept that turns on the unexpected, the idea that the shopper never knows in advance what she might find in a Costco warehouse?

But other retailers have succeeded in bringing excitement to the retail marketplace. The acknowledged best grocery retailers — H-E-B, Wegmans, Whole Foods — succeed because they make supermarket shopping an exciting experience, no simple trick considering the ordeal a trip to the supermarket can be. Walmart’s Sam’s Club unit has revived its fortunes and emerged as an effective competitor to Costco by marketing value, ideas, concepts and solutions rather than products. Several of Walgreens’ new-concept stores — those at 40 Wall St. in Manhattan and State and Randolph in Chicago, for instance — are exciting in the sense that they are effectively marketed as “daily living” stores, outlets where core drug store categories are subordinated to those products and departments consumers rely on to support their daily or weekly lives. As such, grocery items and beauty care categories have replaced, or at least supplemented, prescription and over-the-counter drugs as shopping inducements, though the latter categories still anchor the merchandise mix.

Other examples of retail creativity abound, but perhaps none stands out so vividly as the serendipity that confronts the customer at the latest stores unveiled by Target. For years, indeed too many years, Target has played second fiddle to Walmart in the discount store universe. Walmart was larger and more aggressive, its shopping proposition more precisely targeted to its core customer, a shopper who often lives and shops paycheck-to-paycheck.

Target, on the other hand, though stunningly successful, faced a more daunting challenge in addressing the wants and needs of its core shoppers, especially in such core categories as health and beauty aids. Indeed, the retailer experienced an almost insurmountable assignment in trying to convince its customers that its prices were competitive with those at the Walmart down the street.

No longer. In the opinion of a growing number of retail authorities, Target has emerged as America’s premier discount retailer — largely because of the merchandising excitement both its stores and its strategies now routinely generate. Target has popularized such concepts as pop-up stores, while bringing leading-edge fashion to mainstream America. The retailer has succeeded by advancing its own brand by popularizing the brands of the branded merchandise in its stores. The newest Target stores, though still works in progress, are exciting because of the adventure the customers encounter in shopping a constantly changing assortment of apparel and household brands.

But perhaps the most fascinating aspect of Target’s success is the fact that the retailer has finally overcome its inferiority complex at being compared, often less than favorably, with Walmart. Recently Target has begun acknowledging that it’s a pretty good retailer, the best in its class at what it does best. When the company recently opened three urban stores, in Chicago, Los Angeles and Seattle, it sent out invitations to the media, something it did not always do in the past. Its upcoming entry into Canada, scheduled for early 2013, has even now put Walmart on the defensive.

And speaking of Walmart, unlike the world’s largest retailer, which did its best to downplay its 50th anniversary while trying hard to ignore those former associates who helped the company reach that milestone, Target has celebrated its Golden Anniversary, going so far as to organize a party in New York City this month that even included outsiders, a group Target routinely neglected in the past.

This forward-looking posture has produced unimagined benefits. By shedding its reticence and accepting the possibility that Target is truly a world-class retailer, the company has become one. Confidence has replaced caution when dealing with the retailer’s various constituencies, and boldness in espousing, introducing, refining and expanding new concepts has become the rule rather than the rarity.

The result is that Target, while not yet generating quite the level of retail excitement that is the hallmark of Costco, Wegmans, H-E-B, Whole Foods and a handful of other retailers, is not far behind. Perhaps of greater significance, Target has at last come to occupy the top spot in the discount store marketplace.


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