'Target CEO claims customers are saying ‘a big thank you’ for locking up merchandise'

[babs]

I still think they are significantly behind Walmart because their own doing.

They had some great things on their side that Walmart did not. Think Culture, Politics, Fashion, Ambience, Ethics, positive Labor issues and more.

They pissed it all away.

All remember Target's customer is female. It's who they target and aim their marketing and merchandise towards. Walmart casts its net much wider. I don't necessarily think Target focusing on the female consumer is a bad thing. It has created a lot more loyalty and focus for them among their base customer. But keep in mind size isn't everything.

True and they had a huge loyal gay following as well and still did not grow like Walmart did.

To be fair, Walmart carried a ton of pride stuff and received no backlash.

[Super S]

Wal Mart has been a more aggressive retailer that has tried to do more things. They are not really excelling in any category (well, maybe grocery...) but are proficient in many things and their private label general merchandise programs are significantly better than many give them credit for. Over the years Target has dumbed down too many product lines and categories and eliminated too much. Wal Mart despite some of these product lines obviously being underperforming, does not drop product lines very often (look how long it took them to finally discontinue pet fish).

I really enjoy the SKU depth of Wal Mart. On the general merchandise side, it isn't the best quality, but it is functional. I've bought a number of items there, mostly on clearance sales, and been very happy with what I got for what I paid. Had I paid the full price I'd be satisfied but maybe not "very happy." I really think they know how to price appropriately for the quality of their product offer and set realistic customer expectations.

Wal Mart does not play games on prices with sales, loyalty cards, excessive mark ups to show some "image" of savings, percent off sales, or any of that other crap that all of these other retailers (Target included- and previously Kmart and Shopko) do.

Target in the 00's seemed to be more straightforward on price, like they were trying to be similar to Wal Mart in pricing strategy. They ran more "sales" but really their pricing was quite fair; they tried to get an extra $1 here and there on a decor item that looked better than the stuff at Wal Mart but on stuff like food, pet, toys, etc., they priced equal to Wal Mart.

Target has started to play significant games on price in recent years. Their clothing prices are excessively high for what they are selling, and they are doing a lot of sales. The "Target Circle" program runs hundreds of Digital Coupon % offers and I have noticed multiple times the items get a price increase right before a "Target Circle % off" promotion starts on various grocery items, especially frozen foods.

So I wonder how much a consistent, straightforward, no nonsense store pricing strategy has helped Wal Mart become so much larger than these others? Even though Wal Mart's prices aren't the bargain they once were, the straightforward pricing strategy has remained the same.

I do have respect for both Walmart and WinCo for a simple pricing strategy.

This does not mean that they have everything I need, or that their prices are the best. But this strategy does resonate with a lot of people. The price on the shelf is what you pay, without apps, coupons, cards etc.

Where Target bugs me is when they take whatever Chinese made item and attach some fancy designer's name to it to justify a higher price. Sometimes the identical item is sold elsewhere without the designer's name for considerably less money. But that appeals to the female customer I guess.

I was in my local Target just yesterday, and it was a bit puzzling. They had a LOT of displays cluttering up the "racetrack" aisle along the front of the store, and were already playing Christmas music, at a louder than usual volume (Target had a no music policy for many years) They also have very weak GM hardlines departments. Automotive for instance was barely half of one aisle, and hardware wasn't much better. Walmart, in all honesty, has a better handle on what Middle America actually shops for and is better equipped than most to complete a customer's list in one trip. Even Fred Meyer has been slipping in this area in recent years.

[ClownLoach]

Wal Mart has been a more aggressive retailer that has tried to do more things. They are not really excelling in any category (well, maybe grocery...) but are proficient in many things and their private label general merchandise programs are significantly better than many give them credit for. Over the years Target has dumbed down too many product lines and categories and eliminated too much. Wal Mart despite some of these product lines obviously being underperforming, does not drop product lines very often (look how long it took them to finally discontinue pet fish).

I really enjoy the SKU depth of Wal Mart. On the general merchandise side, it isn't the best quality, but it is functional. I've bought a number of items there, mostly on clearance sales, and been very happy with what I got for what I paid. Had I paid the full price I'd be satisfied but maybe not "very happy." I really think they know how to price appropriately for the quality of their product offer and set realistic customer expectations.

Wal Mart does not play games on prices with sales, loyalty cards, excessive mark ups to show some "image" of savings, percent off sales, or any of that other crap that all of these other retailers (Target included- and previously Kmart and Shopko) do.

Target in the 00's seemed to be more straightforward on price, like they were trying to be similar to Wal Mart in pricing strategy. They ran more "sales" but really their pricing was quite fair; they tried to get an extra $1 here and there on a decor item that looked better than the stuff at Wal Mart but on stuff like food, pet, toys, etc., they priced equal to Wal Mart.

Target has started to play significant games on price in recent years. Their clothing prices are excessively high for what they are selling, and they are doing a lot of sales. The "Target Circle" program runs hundreds of Digital Coupon % offers and I have noticed multiple times the items get a price increase right before a "Target Circle % off" promotion starts on various grocery items, especially frozen foods.

So I wonder how much a consistent, straightforward, no nonsense store pricing strategy has helped Wal Mart become so much larger than these others? Even though Wal Mart's prices aren't the bargain they once were, the straightforward pricing strategy has remained the same.

I was in my local Target just yesterday, and it was a bit puzzling. They had a LOT of displays cluttering up the "racetrack" aisle along the front of the store, and were already playing Christmas music, at a louder than usual volume (Target had a no music policy for many years) They also have very weak GM hardlines departments. Automotive for instance was barely half of one aisle, and hardware wasn't much better. Walmart, in all honesty, has a better handle on what Middle America actually shops for and is better equipped than most to complete a customer's list in one trip. Even Fred Meyer has been slipping in this area in recent years.

Target has been "Black Friday" set all week since their sale started on Sunday. That's why they had all that stuff set up front. To me it seems like half or less of what they used to stack up, but the death of physical media is probably the top reason as they used to have pallet dump bins everywhere of DVDs and Video Games.

With the remodels that began about mid 2010s, Target started adding storewide speaker systems to play music. They didn't have a no music policy, they didn't have speakers that would actually play it as the stores only had old fashioned loudspeakers for public announcement. It would sound like the adults in a Peanuts cartoon if you tried to play music on that. It's all automated via a satellite media service and nobody should be playing with the volume. I recall it was "news" for a short period of time and then people got over it. There were some stupid comments as always "I don't like shopping at stores with music so I won't come back unless they turn it off," that person I guess either can survive entirely on Costco, restaurant food, or will die of starvation then.

The flexible format issue I raise is the same you're seeing; too much general merchandise has given way to the focus departments in regular Target stores. This has worsened significantly since 2018 and I too am unhappy with departments like Automotive which now is almost gone except for large format stores. Walmart is obviously watching closely and since their systems constantly analyze space and assortment I am sure that sales transfer directly to them so when Target reduces an area, Walmart soon expands it. If you have a chance to visit a large former Greatland or Super then you can see how much is missing and it's tens of thousands of SKUs. Yet as I've said before, we can all make these criticisms of Target yet somehow they've added $35 billion in sales through the strategy.

Obviously Target has finally recognized far too late in the game that they should have spent the 90s and 2000s expanding and relocating stores so they were all Super format carrying the maximum SKU count. Walmart did that work in the 2000s and 2010s to at least cram the full grocery department into 85% of the chain even if they didn't have room to expand the building and they did it without as much removal of SKUs. California is where they have the worst fleet of stores from a consistency perspective with few true prototypical supercenters, go beyond that and again at least 85% of the chain is some version of Walmart Supercenter format.

Now Target has finally come full circle and decided that starting in 2024 they're going back to primarily building SuperTarget sized stores because they need the full SKU assortment back. So nearly 15 years of SKU rationalization, intensive customization of the prototypes etc. has finally been recognized to be a failure. And they're finally paying attention to the very few full line grocery locations that do good volume (I was jaw on the floor shocked by how great Murrieta North looked today, and they had no exaggerating 50 Team Members and multiple Team Leaders all assigned to the grocery block, 6 working produce constantly filling, culling, flexing, 3 baking in bakery, 3 in deli, and pretty much 2 per aisle in grocery plus extras roaming)... But they didn't commit to adding more full grocery in the Katy-Elison prototype even though they have ample space to do it.

So they obviously know what kind of growth vehicle foods done right are, but they are too afraid to pull the trigger on committing to any change at all of either taking the program nationwide like Walmart did with great success or packing it in and killing off the small cluster of full grocery locations left. Personally I would hire someone who knows how to fix the flaws, not all of the Target processes are a bad thing especially ambient areas, and they don't use Target replenishment systems to stock fresh foods anymore which is why they now look full and great for the first time. If they committed to the business and had a 5 year plan to get it into every unit over 100K Sq ft like Walmart did then it would likely be very easy to get such substantially improved buying power that they would no longer be dependent on weird wholesalers who sometimes bring in remote produce that doesn't make sense for the market and such. Personally, I would be looking to poach the Walmart people who figured out how to remodel so many stores without physically adding onto the buildings as they would probably know how to do the same thing at Target.

And as I've said hopefully the upcoming retirements of senior leaders will instill a new sense of urgency to close performance gaps and correct the problem stores. Anecdotally I think that about 25% of Target stores are absolutely excellent operationally, that's down from about 75% a decade ago. Today I think 50% are just limping along with adequate to marginal conditions, and I think 25% are broken stores. Worse, the broken stores are sometimes in districts and groups of "good" stores, meaning that their problems are worse than just a few bad districts like Sacramento-Northern NV as we love to mention here.

[Romr123]

Curious--does anyone know of a particularly high-volume Super in metro Kansas City--we're headed there in a week or so with some time to kill and would be curious to see one.

[bryceleinan]

Curious--does anyone know of a particularly high-volume Super in metro Kansas City--we're headed there in a week or so with some time to kill and would be curious to see one.

I went to the one at 15345 W 119th St in Olathe, KS after eating at the nearby Olathe location of Joe’s KC BBQ (which is the best BBQ in the city). That store was fairly busy when I was there, but that was a few years ago.

[storewanderer]

Curious--does anyone know of a particularly high-volume Super in metro Kansas City--we're headed there in a week or so with some time to kill and would be curious to see one.

I went to the one at 15345 W 119th St in Olathe, KS after eating at the nearby Olathe location of Joe’s KC BBQ (which is the best BBQ in the city). That store was fairly busy when I was there, but that was a few years ago.

Jack Stack is also very good BBQ. Some items I like Joe's better some I like Jack Stack. Both have mail order. I've had decent luck with the mail order Jack Stack. Have not tried the Joe's mail order.

[BreakingThrough]

Just wanted to comment on the Drive-up issue. I bounce between Target's Manhattan Beach (remodeled Greatland with Ulta) and Torrance (odd wide and shallow layout, but two entrances. I'm guessing it opened as a Greatland? No ulta but expanded beauty). I also visit the Encinitas El Camino Real store when visiting family (Greatland with Ulta and has been remodeled at least 3-4 times. I learned from Clown that this is one of their highest-volume Socal stores).

Oh and occasional emergency visits to the debacle that is Westchester small format but I try to dissociate when going there.

Point being, when I visit the Torrance store there are a handful of cars in Drive-up. The Manhattan Beach and Encinitas stores are always PACKED in drive-up. I realize my sample size is tiny, but it certainly seems like their most affluent customers are the highest users of drive-up. All people who would likely have dropped good money on impulse buys. I can't imagine the lost revenue from the "Dollar Spot" alone in stores with heavy drive-up use. I doubt they've picked up new customers with Drive-up at these stores; all would have gone inside before. Drive-up probably increaeses frequency of visits while still driving down overall revenue per customer. So they take a double or triple hit on labor costs when the customer divides their trip into 3 drive-ups vs. one in-store.

I'm guessing Wal-Mart, who HAS definitely picked up new customers with Drive-up, is what is keeping Target from charging for Drive-up. But this certainly doesn't seem sustainable. It does seem like enough time has passed since the thick of COVID to add drive-up up-charges. They could publicly message in PR that they are reinvesting into the store environment, to make it better than ever, etc. Maybe we'll see finally see it in '24.

[J-Man]

I'm guessing Wal-Mart, who HAS definitely picked up new customers with Drive-up, is what is keeping Target from charging for Drive-up. But this certainly doesn't seem sustainable. It does seem like enough time has passed since the thick of COVID to add drive-up up-charges. They could publicly message in PR that they are reinvesting into the store environment, to make it better than ever, etc. Maybe we'll see finally see it in '24.

Two big differences I see between Walmart and Target with respect to drive-up and delivery services. Walmart requires a $35 minimum for drive-up. Target has no minimum. Walmart offers Walmart+ a paid service, which provides free delivery (again, with a $35 minimum.) It also comes with other benefits. Target only has Shipt for delivery.

[storewanderer]

I'm guessing Wal-Mart, who HAS definitely picked up new customers with Drive-up, is what is keeping Target from charging for Drive-up. But this certainly doesn't seem sustainable. It does seem like enough time has passed since the thick of COVID to add drive-up up-charges. They could publicly message in PR that they are reinvesting into the store environment, to make it better than ever, etc. Maybe we'll see finally see it in '24.

Two big differences I see between Walmart and Target with respect to drive-up and delivery services. Walmart requires a $35 minimum for drive-up. Target has no minimum. Walmart offers Walmart+ a paid service, which provides free delivery (again, with a $35 minimum.) It also comes with other benefits. Target only has Shipt for delivery.

Wal Mart's digital services are far more efficient and profitable than Target and have done what these services should do- get people who otherwise wouldn't shop Wal Mart, to shop Wal Mart. I don't see anyone complaining about the minimum at Wal Mart because the customers are all spending far above the minimum anyway.

I'm not sure I'd impose a minimum order for pick up if I were Target. One of the cultural things of Target is to make the shopping experience as frictionless and easy as possible for the customer. I know we could cite a lot of examples here of how they've lost their way (locked cases, out of stocks, long checkout lines) but a lot of those are store specific issues and not chainwide problems. Throwing a minimum order amount at Drive Up customers does not follow their frictionless shopping experience model. The reality is Target may make more on a customer doing a $12 drive up for a shirt, than Wal Mart makes on a customer doing a $50 drive up of dog food and frozen dinners.

[ClownLoach]

I'm guessing Wal-Mart, who HAS definitely picked up new customers with Drive-up, is what is keeping Target from charging for Drive-up. But this certainly doesn't seem sustainable. It does seem like enough time has passed since the thick of COVID to add drive-up up-charges. They could publicly message in PR that they are reinvesting into the store environment, to make it better than ever, etc. Maybe we'll see finally see it in '24.

Two big differences I see between Walmart and Target with respect to drive-up and delivery services. Walmart requires a $35 minimum for drive-up. Target has no minimum. Walmart offers Walmart+ a paid service, which provides free delivery (again, with a $35 minimum.) It also comes with other benefits. Target only has Shipt for delivery.

Wal Mart's digital services are far more efficient and profitable than Target and have done what these services should do- get people who otherwise wouldn't shop Wal Mart, to shop Wal Mart. I don't see anyone complaining about the minimum at Wal Mart because the customers are all spending far above the minimum anyway.

I'm not sure I'd impose a minimum order for pick up if I were Target. One of the cultural things of Target is to make the shopping experience as frictionless and easy as possible for the customer. I know we could cite a lot of examples here of how they've lost their way (locked cases, out of stocks, long checkout lines) but a lot of those are store specific issues and not chainwide problems. Throwing a minimum order amount at Drive Up customers does not follow their frictionless shopping experience model. The reality is Target may make more on a customer doing a $12 drive up for a shirt, than Wal Mart makes on a customer doing a $50 drive up of dog food and frozen dinners.

I'm going to disagree. When Target has problematic stores like Manhattan Beach mentioned above with silly stupid levels of drive up volume that force them to operate with a skeleton crew at the front end and 20+ self checkouts unsupervised, they are in fact adding tremendous friction for nearly all their customers while helping a very few. They don't have anyone to unlock glass cases, load TV sets unless they were purchased with drive up, and so forth plus the store recovery is always poor, floor filthy, and restrooms a biohazard zone. This is a excellent example of a store being broken by Drive Up, the conditions within are so revolting to the rich clientele now that they will only use drive up creating the death spiral of profitability I have described.

Target has "must by 2" sale prices all over the store, new glass cases, sales that require a mobile app account and scanning a code with said app, a forced Circle loyalty program for other discounts (no rhyme or reason why some are and aren't Circle), majority self checkout, stores the size of a Walgreens down the street from stores larger than a Costco, superstores with empty grocery departments and mothballed bakeries and delis. There is not anything as high friction as Target these days; Walmart is a much more frictionless experience.