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Target’s Bull’s Eye Focuses On Local Customers

In the world of brick and mortar retail, bigger is not always better. Boutiques that specialize in catering to a particular shopper have long found that focus on their core customers is lucrative. Now Target is trying that model on for size.

Smaller Target stores have been around in cities for a little while, because the small footprint allowed the store to fit into a cityscape. When there’s no room to build a mega store, Target took advantage of a city location, but pared down its offerings in a “Target Express.” Today, all the mini stores are rebranded as “Target,” and the retail merchandizing is focused on serving the specific needs of local customers rather than trying to provide a wide variety of tastes. The Washington Post recently wrote about the new Target in a Arlington, Va., neighborhood.

Target has long made use of data analysis to target customers through the mail, offering coupons and specials to individuals based on

Retail customer intelligence and other forms of data analysis can help businesses target their advertising and optimize store operations.

Retail customer intelligence and other forms of data analysis can help businesses target their advertising and optimize store operations.

their shopping histories. Now the department store is aggregating that information to create shopping experiences that are customized for the local shoppers. So, for example, does research show there are several local knitting groups? Check out the organic cotton yarn in our craft section. Lots of nursery schools? See the expanded children’s book section. Landlocked city with no hunting or fishing clubs? Save the rifles and reels for another store.

Target seems to have learned a great deal from its debacle in Canada, where a lack of quality market research resulted in the retailer stocking irrelevant products. Management didn’t recognize the difference between U.S. shoppers and their Canadian counterparts, and the expansion was a flop. The move into micromarketing the smaller stores indicates an intent to offer shoppers a quick and easy way to find products they have in mind, rather than foster more of a browsing experience.

Such an approach means a good deal of curation by management. Determining what products will appeal most to the demographic requires data analysis, not only of purchases within the store but also of activities within the community. In a way, it is similar to the charter of a local daily newspaper: The news of the day takes on relevance only as it relates to the community. For example, a day care center opening is of interest to that city’s residents, but not to those of the state. Further, that center’s opening would indicate more children in the neighborhood, and a local Target might beef up offerings targeted at children, as well as their mothers.

Target is the nation’s sixth-largest retailer, with $73 billion in revenue last year. Once a powerhouse among style-savvy shoppers, it has lost its cache in recent years, mainly due to a faltering economy. But shoppers it may have lost to lower priced chains, such as Walmart, may be lured back as the economy rebounds and Target once again regains its reputation as being “in the know” about its customers’ tastes.




130

Countries

9000

Customers

54000

Stores

159000

Points of Sale

130

Countries

9000

Customers

54000

Stores

159000

Points of Sale

130

Countries

9000

Customers

54000

Stores

159000

Points of Sale