TARGET'S REINVENTION PLAN
As shopper habits change, Target is working overtime to meet those new demands. And the efforts are starting to bear fruit, as they come off a fourth quarter of strong traffic growth in both stores and digital. The keys to its success can be categorized into three segments: Delivery Services, Remodeling, and Employee Appreciation.
Target recently introduced Drive Up, where guests place an online order from the Target app and a team member delivers it to their car in the store parking lot. Drive Up, in conjunction with 2-Day and Same Day delivery through its Shypt acquisition, is helping it compete more effectively against Amazon. And on the brick-and-mortar front, the retailer plans to update more than 300 stores this year while opening 130 more small-format stores by 2019. And yes, Target's also raised the minimum wage to help improve its employees' standard of living.
"Our strategy is working," said CEO Brian Cornell. "Our guests are responding, and we are accelerating the pace, pushing even harder." We're happy to see that despite the market pressures Target is facing, they are making significant competitive strides forward.
KOHL'S PURSUIT OF EXCELLENCE
It's not just about the e-commerce, as far as Kohl's is concerned, that is. Chief Operating officer Sona Chawla firmly believes customers want to shop in both the digital and physical worlds, explaining the department store's shift in priorities.
Increasing foot traffic and operational excellence have been key Kohl's initiatives since it began re-adjusting store square footage to make room for the recent Kohl's-Aldi partnership. Aldi, known for its affordable grocery options, will serve as a traffic driver while giving customers a one-stop option.
"Customers demand instant gratification," Chawla said, and convenience means happier customers.
Luxury retailers are embracing in-store personalization to deliver one-of-a-kind items and experiences. Coach and Gucci have collaborated with partners to bring customization activities in-house, and now DVF has partnered with Microsoft for a VIP virtual reality experience and customization station in its flagship store.
Customers will have access to beanies, t-shirts, and tote bags that can be personalized with sayings and designs. Customization events like these serve a dual purpose - the tech activation connects the brand with the customer, while also gathering data about them.
Pairing customization, technology, and experiential retail is becoming the standard for luxury brands looking to exceed customer expectations.
THIS WEEK IN CLOSINGS
It's not like we expected the store closing story of last year to completely go away, but haven't things have been feeling calmer since the beginning of the year? Well, unfortunately, the "retail apocalypse" story line is resurfacing, taking on more victims.
J.C. Penney is cutting 360 jobs between its headquarter and store locations, in efforts to "maintain a thoughtful approach to managing expenses." The retailer hopes to save over $20M in revenue, while effectively supporting the needs of the business.
And Abercrombie & Fitch plans to close up to 60 U.S. stores at the expiration of lease terms, but intends to open 21 full-price locations, including 11 in the U.S. and 10 in international markets. Likewise, Foot Locker announced the shuttering of 110 stores to reduce costs and the number of locations in deteriorating malls. However, the footwear retailer plans to open 40 higher-end locations to counter the unproductive stores.
While not as far-reaching as some of last year's closing announcements, we think it's likely there's going to be continued retail market turbulence during the months ahead.
THIS WEEK'S BRIGHT SPOT
Too Faced is proving you don’t have to be a young or socially-native beauty brand like Glossier or ColourPop to dominate the online conversation. Founded in 1998, the cosmetics brand is currently on track to be one of the leading brands on social media for 2018.
Its emphasis on diverse user-generated content, partnerships with similar brands and influencers, and pushing a cross-platform strategy resulted in a 7 million rise in social media followers this year, surpassing more traditional competitors like Maybelline and L'Oreal.
The bulk of its content is user-generated, including selfies, video tutorials, and product shots. According to visual intelligence platform Dash Hudson, its followers publish more than 20K pieces of this type of content every week. Impressive!