Target is the second largest general retailer in the US behind Walmart, with 1,800 stores nationwide. One of the retail success stories of the 1990s, the company has been transformed from a sleepy department store business to one of the country's most aggressive retail brands. Key to Target's success was its strategy of positioning itself as a high-style brand despite its low prices, attracting shoppers who would normally avoid discount retailers. It did this with clever and eye-catching marketing and a series of partnerships with high-profile design-led suppliers. Historically a US-only business, it launched into Canada for the first time during 2013, opening more than 120 stores in less than a year. However this wildly ambitious project proved a dismal failure, and the group's troubles were exacerbated by a huge online security breach which resulted in theft of personal information for millions of customers. The plug was pulled on Canada at the beginning of 2015 to allow the group to focus on boosting its US performance. So far, though, this has proved harder than expected.
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Target Corporation website
Adbrands Weekly Update 8th Mar 2018: US retail giant Target claimed to have turned a corner after several years of weak performance and a dismal holiday season in 2016. "What a difference a year makes," said CEO Brian Cornell. "You don't have to get too far into the numbers to see our strategy is working." Investors weren't so sure, triggering a 5% decline in the company's share price. Target reported its 3rd consecutive quarter of growth, including a 29% increase in ecommerce sales (beating Walmart's 23%). But earnings per share came in below expectations, and profit margins slipped: proof that more still needs to be done. For the year, revenues were up 3% to $71.9bn while net earnings rose 7% to $2.9bn. Much of that profit increase came from tax reforms. Adjusted earnings excluding exceptional items actually slipped 13%.
Adbrands Weekly Update 14th Dec 2017: Target announced the acquisition of grocery deliveries startup Shipt for $550m, with the aim of matching the service already offered by Amazon and Walmart. Uber-style, Shipt outsources buying and delivery to a team of around 20,000 independent contractors in selected local markets. They buy the required products from nearby stores and then deliver to individual customers, who pay an annual fee plus delivery charge. By bringing that service inhouse, with products sourced entirely or mainly from its own stores, Target aims to offer same-day delivery in about half its stores by 2Q 2018.
Adbrands Weekly Update 2nd Mar 2017: US discounter Target took the markets by surprise with worse than expected figures for its latest fiscal year, and a gloomy forecast for the current period. Same store sales fell by 1.5% over the holiday quarter, and full year revenues slipped 6% to $69.5bn, the first time since 2011 they have fallen below $70bn. A sharp rise in expenses and in finance costs prompted earnings to slump by almost 19% to $2.74bn. That contrasted with solid increases reported by other big box retailers like Walmart, Home Depot and Lowe's. Target CEO Brian Cornell warned that profits for the year to 2018 will be as much as a quarter below expectations, but he vowed to spend $7bn over the next three years to improve physical stores and ecommerce operations as well as on price cutting and the development of new exclusive brands. In particular Target aims to re-establish its "everyday low price commitment" in categories such as household products, personal care and food. With Aldi now flexing its low price muscles in the US just as it has already done with great success in the UK and Australia, several analysts warned of the potential for a similarly fierce price war among leading US supermarkets.
Adbrands Weekly Update 26th Jan 2017: US retail giant Target named Rick Gomez, previously SVP, brand & category marketing, as its new CMO, succeeding Jeff Jones who resigned late last year to become president of Uber.
Adbrands Weekly Update 1st Sep 2016: US retail giant Target's CMO Jeff Jones is the latest defection from old school marketers to the new generation of tech-based "disrupter" companies. He is joining Uber as president of ride-sharing, with responsibility for operations, marketing and customer support. He takes over that role from co-founder and board member Ryan Graves, who remains with the company as head of its UberEverything new business division. "Our vision is simple: to redefine how a large operations effort can be tightly integrated with a customer-obsessed marketing strategy," said group CEO Travis Kalanick in a statement.
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Free for all users | see full profile for current activities: The core of the group was founded at the the turn of the 20th century in Minneapolis by real estate developer George Draper Dayton. Originally a dry goods company, Dayton's gradually established itself as a general department store, opening several branches throughout the upper Midwest. It set a worthy precedent in 1946 when it began to give 5% of its pretax profits to charity, and a decade later opened the country's first fully enclosed shopping centre. In 1962, the company launched a new brand, Target, the first retail store to offer well-known national brands at discounted prices. (Wal-Mart and Kmart launched the same year). The first Target store in Roseville, Minnesota was a notable success, and the group launched other outlets following flotation in 1967. Dayton's also introduced bookstore chain B Dalton.
In 1969, Dayton's merged with rival department store retailer JL Hudson to form Dayton Hudson Corporation, with combined revenues of just under $1bn. Joseph Hudson had opened his first clothing store in Detroit in 1881, and by 1900 had become the biggest men's clothing retailer in the US. In the 1950s, the company had developed what was then the country's biggest shopping centre, in Detroit. The combination of the the two companies gave Dayton Hudson a strong presence in the Midwest. But the group's fastest-growing brand was not one of its established department stores, but discount division Target and the B Dalton bookstore chain, which had expanded to almost 800 outlets by the mid-1970s.
In 1978, Dayton Hudson moved west, acquiring like-minded Californian store chain Mervyn's. But a year later, Target overtook all three of its sister brands to become the company's biggest revenue-earner. The Dayton's and Hudson's brands were merged in 1984 although they retained their own branding, and in 1990 the group strengthened its portfolio with the acquisition from BAT Industries of Marshall Field's, one of the country's most famous department store brands. Entrepreneur Marshall Field had acquired a small dry goods store in 1885, and turned it into Chicago's most celebrated retailer, with a particular strength in fashion and household durables. Gradually, the company had extended its presence, opening a number of satellite stores in and around the Midwest. However this series of mergers and acquisitions had left Dayton Hudson with a management-heavy structure that kept costs high. Despite the sale of B Dalton (to Barnes & Noble), the group's financial performance remained patchy throughout the late 1980s and early 1990s.
In 1994, Bob Ulrich, a former divisional head of the Target brand since 1984, was appointed CEO of the group, and he began an overhaul of the business, cutting away management layers to focus on fast, aggressive growth. Most of his attention was directed to the main Target brand, which was expanded nationally from around 550 stores in 1994 to more than 800 by 1998. The company also became the first discount retailer to offer a branded credit card with the Target Guest Card, which proved a significant boost to customer loyalty and also boosted profits as a result of interest charges to late-paying customers. Also in 1998 the group acquired Associated Merchandising Corporation, one of the country's most important fashion sourcing and product development companies. In 2000 the group changed its name from Dayton Hudson to Target in honour of its lead brand, and the Dayton's and Hudson's brands were finally phased out a year later, becoming Marshall Field's. Both Mervyn's and Marshall Field's were sold in 2004.
In 2005, Target reinforced its upscale image by booking all 18 display ad pages in one issue of culture bible The New Yorker. Agency Peterson Milla Hooks commissioned the magazine's team of illustrators to create a series of different images, all bearing the store's trademark red-and-white bullseye logo, and each celebrating an aspect of New York life. As a result of this and other upscale marketing, Newsweek described the company's logo as an "icon of affordable chic", while Newsweek called it "a retail symbol as recognizable as Tiffany's blue box".
Bob Ulrich, principal architect of Target's extraordinary expansion, passed on the role of CEO to Gregg Steinhafel in 2008, and stepped down as chairman in January 2009. See full profile for current activities
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