Earlier this year, Target reported its first drop in sales in seven years. This was the result of controversy and changing consumer habits. But, don’t count the big-box giant out yet. Recently, the company revealed a strategy that has the brand — and investors — hopeful for a strong comeback…
Why Target Sales Suffered in the First Place…
Before we review Target’s plan to supercharge sales, it is important to see how they got here. Several specific factors negatively affected Tar-jay’s bottom line.
To start, foot traffic to physical stores slowed overall in 2023…
By and large, customers preferred to have nonperishable items shipped to them — an aspect of Target’s business model that was lacking.
Also, the majority of Target’s sales come from home goods and electronics which buyers are foregoing for essential purchases. (In similar chains — like Walmart’s — their lion’s share comes from food sales.)
All of this together resulted in the company’s first decline in sales since 2016. And, this is what they plan to do about it…
The Red Circle’s Game Plan to Bounce Back
Target is being proactive about its drop in sales.
The retailer has a two-part initiative to combat the issues we outlined in the previous section.
- Upgrade their locations to address slow traffic.
- Improve their paid membership program, Target Circle 360, to include:
- Free same-day shipping on orders over $35
- Included free two-day shipping on all purchases
Target chief executive, Brian Cornell, was quoted in the Wall Street Journal as saying this about the strategy.
“OUR GOAL IS TO RECAPTURE PROFITABLE SALES, TRAFFIC, AND MARKET SHARE GAINS BY EXPANDING WHAT MAKES TARGET DIFFERENT AND BETTER FOR OUR GUESTS.”
Whether this plan will help Target hit sales goals is yet to be determined. But, shares in the company went up 12% after the plan was delineated…
Be Great,
GCTV Staff
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