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Target unveils smaller-format stores in NYC

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MINNEAPOLIS — Target Corp. opened four of its “flexible format” stores on October 6, including a two-story, 45,000-square-foot store on Greenwich Street in New York’s Tribeca neighborhood to serve city dwellers, office workers, tourists and others. Target on that date also opened flexible-format stores in Philadelphia; Cupertino, Calif.; and State College, Pa.

The company now has 27 of the smaller stores, which mainly range in size from 20,000 square feet to 50,000 square feet. It has 1,772 conventional stores, which typically measure 120,000 square feet or larger. But the flexible format will account for the lion’s share of Target’s expansion in the next few years. Fourteen of the 15 stores Target is opening this year are flexible-format stores, most of which are opening in urban neighborhoods or in college towns. By the end of 2017, Target expects to have about 60 of the smaller stores in operation.

The changing face of Target’s store growth is being driven by customers’ expectations for ease and personalization, according to Janna Potts, executive vice president and chief stores officer at Target. The flexible-format stores are tailored to suit each neighborhood’s wants and needs and offer an increasingly localized experience, she said. Target’s flexible-format stores team is continuously asking shoppers how the assortment can be refined to ensure that the stores are stocking must-have products that satisfy localized demands.

The new Tribeca store features extensive apparel and beauty offerings as well as home goods and grocery items. Target’s order pickup service — which allows customers to select from a larger assortment of merchandise online and pick up the items at their local store — is available at the Tribeca outlet, according to the company. The lower Manhattan outlet also is testing a new cash register queuing system and an expanded self-checkout option. There’s a grab-and-go food section for office workers — the store is a short walk from City Hall — and a Chobani café, the yogurt maker’s second, where customers can get salads, beverages and breakfast bowls with yogurt.

“These stores allow us to operate in areas we have never been able to serve with our largest-format stores, allowing us to extend our reach to consumers with high affinity for our brand,” Brian Cornell, Target’s chairman and chief executive officer, said during the company’s fiscal second quarter earnings call with investors in August. “In July, we opened up new flex-format stores in Washington Square in Philadelphia; Lincoln Park in Chicago; Commonwealth in Boston; and Forest Hills in Queens [N.Y.]. We are excited to be serving guests in these iconic neighborhoods, and the guest response to these new locations has been fantastic.

“Financially, flexible formats are very successful. The sales productivity is much higher than our company average, and they have been meeting or exceeding our profit targets,” Cornell said. “Based on our experience to date and our investments and capability, we are increasingly confident in our ability to successfully open and operate stores in a variety of neighborhood settings across the country. As a result, we are accelerating our pipeline of locations we can open in future years, and we expect flex-format stores to be a key driver of future growth. In our existing stores, we continue to invest in presentation and experience, particularly in signature categories.”

Target this year allocated $1 billion in capital spending to remodel or build stores.


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