Target Invests $1 Billion On Store Experience

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Target Invests $1 Billion On Store Experience

By Jamie Grill-Goodman - 05/20/2016
Target Corporation will focus nearly $1 billion of its CapEx this year on the store experience. The company's innovation initiative called LA25 in 25 of its Los Angeles stores is nearing completion. The new store remodels will allow Target to test about 50 of its top enhancements and innovations to study the power they have on guest experience and sales. Tests range from services already piloting in other markets to brand-new ideas, all with the goal of using  what Target learns to build future store prototypes and design plans.

"We’re very excited to be near completion of our LA 25 remodels, which began before the holiday season and we are eager to gain guest feedbacks to determine which enhancements we’ll roll out more broadly in the future," commented Brian Cornell, Chairman & Chief Executive Officer.

In addition, Target continues to rollout new flexible format stores in dense areas and continues to invest in presentation and experience across a broad set of its existing stores.

The company is also investing in self-checkout lanes, operational enhancements and merchandizing innovations this year.

"A key area of focus in our stores is the elevation of our digital order pickup and the team is taking steps to make the process more convenient and less transactional for our guests," said John Mulligan, EVP and Chief Operating Officer. "Our goal in these efforts is to increase satisfaction with the order pick up experience leading to more repeat usage of this capability by our guests."

In the first quarter, approximately 90% of orders were ready for pick up in less than an hour, up nearly 10 percentage points from last year.
"Despite this progress, we have more work to do and we intend to continually improve our performance in response to guest feedback," said Mulligan.
 
To maintain momentum, Target rolled out streamlined order pickup communication this month. The company is also testing in select stores a separate pickup area with additional holding capacity, dedicated team members and enhanced merchandised presentation to encourage additional shopping on their store visit.
 
Cornell noted, "the one thing that we continue to see and we've embraced as an organization is whether our guest is shopping in-store or online, it starts digitally."
 
Target expects investing in its digital assets and enhancing order online, pickup and store capabilities will provide convenience for its shoppers in-store and online. Target's comparable, digital sales increased 23% in the first quarter on top of the 38% increase a year ago. The company also recently added a chief digital officer and CMO
 
"We recognize that even as we look at the start of 2016, the majority of the retail business in United States continues to be done in stores, but it starts online, so we better have great digital capabilities to make sure when our guest is shopping target, no matter how they shop, we make it a convenient, easy experience."