buckguy wrote: ↑April 4th, 2021, 5:05 am
Pick-up makes it easy to return stuff rather than boxing it up, etc., so it's cheaper for Target and the customer. It's also easier for stuff that's likely to leak, get broken, etc. than shipping. One of the hassles of delivery is theft and clueless Amazon people delivering to the wrong address. And during the pandemic, some people like having an excuse to get out of the house. Pick-up is a good long-term strategy and not bad in the interim.
Walmart had the small store concept forced on them by Wall Street. They never had their heart in it and they are generally less adaptable to odd sites than Target. Target was much quicker to enter urban areas and doesn't face neighborhood opposition--they seem to know how to do these stores well. I went to one in Arlington, VA recently and I was impressed at how much they'd been able put in the store space without it seeming to be crowded. Target knows how to fill niches, Walmart just wants to use the same model everywhere they can.
The issue I see for Target is what is the right "small size?" Is it 15,000 square feet, is it 30,000 square feet, is it 50,000 square feet since all qualify as smaller than the usual Target box?
I still suspect many of these small format Targets, specifically the ones below 30,000 square feet, are underperforming, in high rent locations, and losing money. Target gives credit to the store for online sales within a certain radius of the store which may help these stores look better on paper (at the expense of larger busier stores nearby that don't need credit for those sales anyway) but at some point reality will set in and someone will realize the online sales would happen no matter what and are not happening just because of the small stores. At this point they are trying to get a concept that works. I think a 50,000 square foot model is more along the lines of what may work long term for them.
The pandemic and fewer people in big cities/working in offices everyday will be a convenient excuse to blame for why the little 15,000 square foot versions don't work anymore but in reality they were always a concept that would fail.
Wal Mart knows how to do Supercenter (and to a lesser extent the conventional discount store). Any other format they do, never works. Their gas station concept with tiny c-store seems good to me but given how few they have built must not be so good for them. But they sure know how to do Supercenter. I guess it is easier when you have no legitimate competition to speak of in most of the US for your format. More like inept competitors like Target who had a perfect foundation to build a "better Supercenter" but failed to try and as a result failed with their Supercenter concept and have stopped building Super Targets, closed some Super Targets, and rebranded other Super Targets to regular Target- and the stores still carrying the Super Target flag have a worse grocery and fresh product program than Wal Mart because Target refuses to spend the labor necessary to run a quality meat, produce, bakery, and deli operation and treats the Super Targets like a giant P-Fresh.