Dive Brief:
- Target is taking a holistic approach to the holiday customer experience, combining investments in stores, staff and inventory to create a “joyful shopping experience,” CEO Brian Cornell said on the company’s Q3 earnings call Wednesday.
- The retailer hired 100,000 seasonal workers to keep up with the holiday rush and made investments in training to ensure every worker can meet every customer’s needs. Target also introduced color pallets and imagery that it says will help shoppers feel the holiday spirit the moment they step into a store or visit the retailer online.
- “We are leaning into the power of the holiday season by not focusing only on one aspect of our strategy, but celebrating how they all work together to create a unique offering in a crowded retail landscape," Cornell said.
Dive Insight:
Target has spent years developing a business model focused on quickly adjusting to the changing needs of customers. The company is now leaning on that approach to moderate sales declines and maintain loyalty in the face of difficult macroeconomic conditions.
“We're playing the long game: investing in our stores, our team, our digital capabilities and our assortment to provide the newness, value and convenience our guests want for this holiday season and beyond,” Cornell said.
Associates will play a key role in maintaining customers’ positive first impression.
“I'm happy to report that our hiring stats this year have improved relative to last year,” said John Mulligan, EVP and COO at Target. “I'm confident our entire team will be energized and ready to support our guests throughout the busiest season of the year.”
Staff training has already paid off in the form of sustained month-over-month improvements in Target’s Net Promoter Score for interactions with associates at checkout, according to Mulligan. Full service lanes have seen a 6 percentage point increase in usage compared to last year.
Target also saw year-over-year improvements to its Net Promoter Score for drive-up and in-store pickup. Mulligan attributed this to reduced wait times and fewer orders being canceled due to items not being found.
Another key focus for associates is ensuring that priority items remain stocked on shelves throughout the day, according to Mulligan.
By doing so, Target has increased the amount of inventory available on the sales floor by more than $250 million in 2023. The effort will be an important part of ensuring a great customer experience during the busiest parts of the holiday season, Cornell said.
“Our goal this holiday season is to create the perfect combination of incredible value, inspiring and fresh products, and a joyful shopping experience as you [search] the aisles in our stores or on the recently refreshed Target website and app,” Cornell said.
The retailer announced its holiday investments amid a weak Q3 performance. Comparable sales fell 4.9%, which was in line with expectations, according to Target’s earnings release. But executives remained optimistic.
Target’s investments are aimed at generating value and loyalty over the long term rather than driving short-term profits that could ultimately be harmful to the business, according to EVP and CFO Michael Fiddelke.
“By leaning into seasonal moments like back-to-school, back-to-college and Halloween, we not only drove sales in the current quarter, we helped to build lasting affinity with our guests,” Cornell said. “This focus on celebrating the season creates an engaging experience that keeps Target top of mind.”
