Are Shoppers Returning to Target Stores?

Early this week, Target announced that things seem to be turning around. For one, the company has started to implement large-scale technological investments to support online sales growth. But it also looks like customers are flooding back into stores to shop the old-fashioned way.

And because of this, second-quarter sales grew 1.6 percent, which is the first such jump in over a year.

According to Target chief executive Brian Cornell, “Second-quarter traffic was much stronger than our expectations, and the strength was broad-based: across the country, across categories and across channels. The positive response from our guests shows we’re making progress.”

Analysts comment that the growth behind Target’s success have more to do with private-label brands like the Cat & Jack children’s line. Cornell notes that this label, alone, has already done $2 billion in annual sales. Cat & Jack has also recently partnered with Victoria Beckham. Private-label branding seems to be the industry trend right now, and Target appears to be heeding the movement: the company will introduce 12 more brands within the next year and a half. This includes another recent partnership with the mattress start-up Casper.

GlobalData managing director Neil Saunders comments, “Exclusive new brands like Cat & Jack in kids clothing, Pillowfort in homewares, and Cloud Island in baby have all performed well. Not only are these brands credible and compelling, but they are also helping to differentiate Target from rivals.”

You may recall that Target had announced earlier this week the purchase of same-day delivery company Grand Junction, which is part of the Minneapolis-based big box retailer’s effort to compete with Amazon.com and Walmart’s online services. Obviously, Target wants to implement a same-day delivery service, already testing some of it in New York.

Target chief of supply chain and logistics officer, Arthur Valdez notes, “Grand Junction’s technology and algorithms will help Target deliver to guests faster and more efficiently. This acquisition is part of ongoing efforts to strengthen Target’s supply chain to provide greater speed, reliability and convenience for guests.”

In addition, Cornell shares, “We continue to focus on our long-term strategy, [hoping to] transform every part of our business and build an even better Target that will thrive in this new era in retail.”

 

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