Target unveils new plan to win over shoppers. Will it work? – The Mercury News
MINNEAPOLIS – Target’s new CEO believes adding new, exciting products can win over shoppers after a rough few years.
CEO Michael Fiddelke said Tuesday that Target will improve its products and restructure stores to attract shoppers and “return Target to growth.”
The company is trying to bring back what has worked in the past: selling affordable, trendy fashion and merchandise that helped it earn its “Tarzhay” reputation.
Unlike Walmart, which is known for its best prices, or Amazon, which has easily stood out, Target wants to create a fun, treasure-hunting atmosphere in stores when shoppers come in for new finds.
“Target is not a one-stop shop,” said Fiddelke, who took over as CEO of Target last month. He said Target will focus on gaining “busy families” as its customer base.
Target will also increase capital spending by 25% to $5 billion this year to strengthen operations, technology and other areas of the business.
At an investor event at Target’s headquarters in Minneapolis on Tuesday, company leaders detailed their turnaround plan. Target has added new board members and revamped its executive team in recent months.
The company plans to expand into new food, beauty, clothing and homeware products. These categories are important to Target both as money makers and to help the company stand out from its competitors. Target also plans to launch partnerships with niche retailers.
In Target’s beauty section, for example, the company is putting the Supergoop sunscreen brand on the shelf for the first time. It also adds more merchandise for sports and games for kids.
Target doesn’t just need to rearrange its products on the shelves. It is also necessary to invest in activities to support them, say retail analysts.
Target has worked hard to keep stores tidy and certain products on the shelves. Customers complained about long checkout lines and unstaffed stores.
“They’re trying to do basic things like staying on trend,” said Spencer Hanus, an analyst at Wolfe Research. “It’s not rocket science, but it’s hard to do at the scale of over 2,000 stores.”
The new CEO
Fiddelke takes over at Target’s inflection point.
Target’s sales have stagnated and its stock has fallen nearly 30% over the past three years.
The company has faced tough competition from Walmart and Amazon, and made strategic mistakes. It scaled back Pride displays and scaled back DEI’s plans, angering its liberal customers.
Protesters earlier this year called on the retailer to take a public stand against immigration attacks in his home state of Minnesota.
Target had a weak holiday. Target’s sales at stores open at least one year fell 2.5% in its most recent quarter, the company said Tuesday.
But the company says things are starting to improve. Sales picked up in February and the retailer expects total sales to grow about 2% this year.
Some investors had hoped that Target would choose an outsider to turn the company around, but it chose Liverlife Target instead. Fiddelke began his career at Target as an intern in 2003 and worked his way up the ranks of the company.
Bill George, a fellow at Harvard Business School and a former board member, said Fiddelke “knows the company inside and out. He knows the weaknesses and the problems.”
“I think he’s the right person to rebuild Target for the long term,” George said.
The Associated Press contributed to this report.
