In addition, 40 existing stores will receive elements of Target’s next-generation redesign when they are updated in October. The new design elements will be introduced to hundreds of existing Target stores over the next three years, company chairman and chief executive officer Brian Cornell said last month in announcing the initiative.
“With our next generation of store design, we’re investing to take the Target shopping experience to the next level by offering more elevated product presentations and a number of time-saving features,” Cornell said.
The 124,000-square-foot prototype near Houston will have a separate entrance for shoppers in a hurry. Groceries, wine, beer and a selection of grab-and-go items and meal solutions will be located near the entrance, as will a dedicated pickup counter for merchandise ordered online. Shoppers will also have the option of having their ordered delivered to their vehicle. Shoppers entering via the other entrance will see exclusive brands and seasonal fashions, the company said. Beauty, jewelry and accessories departments will be located nearby. A space for store events will be situated between the entrances.
Once inside, shoppers will encounter design features that include large glazed glass windows at the front of the store, stenciled concrete floors and LED track lighting throughout, “Elevated, cross-merchandise product presentations will amplify Target’s exclusive style assortment across apparel and accessories, home, jewelry, and beauty, encouraging guests to browse,” Target said in a statement. “New for Target, curved, more circular center aisles will feature merchandise displays to engage guests with compelling products in unexpected places. Store team members will be equipped with new technology — available in all stores this fall — to search inventory, take payment from a mobile point-of-sale system and arrange delivery, all from the sales floor.”
Target has been testing shopper enhancements around the country. Last year, the company decided to implement the top 50 enhancements in a set of stores in Los Angeles, in a pilot labeled LA25 that Cornell described as an effort to provide a more personalized shopping experience as well as more impactful presentations, fixtures and signage across the store. The company also experimented with new grocery presentation in 16 Dallas stores.
Based on results of the tests in Los Angeles, the company expects its remodels to lift sales by 2% to 4% at each store.
Target said its investment to reimagine 600 stores by 2019 is part of its strategy to create a smart network, with stores, digital channels and the supply chain working together to meet consumers’ needs. Without investment in its stores, the number of weekly visitors could decline 20% or more over the next five years due to the rise of online shopping, according to company executives, who noted the shabbiness of many Target locations. “Today’s Millennial shopper doesn’t enjoy shopping one of our tired stores that hasn’t been touched in 10 years,” said Cornell.
“We’re known for creating a sense of inspiration and discovery that can’t be replicated online in quite the same way,” he added. “So, while we are investing heavily in digital, we’re also doubling down on our stores to offer guests an elevated experience, and at the same time ensuring fast, easy pickup for online orders — giving guests every reason to keep coming to Target.”
The unveiling of the redesign came about a month after Target executives pledged to spend $7 billion to update existing stores and its digital platform, as well as lower prices and accelerate expansion of smaller-format stores, which would allow the company to expand its footprint in dense urban neighborhoods and near college campuses. “Many of our competitors are aggressively rationalizing their assets. They’re cutting costs just to keep their heads above water,” Cornell told analysts at an investment conference in New York in February. “This contraction will create opportunities for Target to pick up market share over the long term.”
Aside from its investments in stores, Target intends to keep upgrading its supply chain so that it can deliver online orders more quickly and profitably. It is also looking to capitalize on the popularity of its Cat & Jack children’s brand by rolling out another dozen or so exclusive lines over the next two years, capable of generating more than $10 billion in sales.