Target Corporation currently ranks as the second largest discount retailer in United States. In more than many ways Target changed the view of people on discount retail stores. By providing an upscale environment and adding brand clothing lines in their collections that covers different financial and cultural diversities, they have garnered millions of loyal customer base. It is their loyalty that earned Target number 22 spot in fortune’s World’s Most Admired Companies. But most importantly Target keeps their customers happy by offering classy products at a very convenient price on top of mind-boggling discounts, coupons, daily offers and top-notch holiday sales. Add the upscale retail feel to it and now they placed themselves at number 20th in DiversityInc’s “Top 50 companies For Diversity”. Corporate Overview: Target Corporation stock is valued at $62.69^ per share. Even in a market due to Federal Shutdown when shares of other retailers were falling left and right, Target still showed .90% growth on share. Reason behind this is the faith of market on the quality of the corporation Target is. Its Price-earnings ratio is excellent as it posted US$ 2.999 Billion dollars in Net earnings is 2012. Which means the company is extremely liquid and there is free cash flow within corporation. Target currently has 361,000 employees and has more than 350 locations. Target converted 100 Zellers stores in Canada out of 220 they purchased. Due to heavy cash flow, their revenues and shares increased even more when they started RED card promotions with its credit card program. They posted an operating Income of US$4 billion dollars and a staggering $70.3 Billion dollars in overall revenue in 2012. The net income is expected to be doubled by the end of 2013-2014 Fiscal year. Customer Base: It is important that a retail store turned into corporation knows their target customer base. According to Adage.Com following statistics were available: 39% are male customers and 60.1% are female customers according to 2012 database survey. Although 80-90% of Target consumers are female, 53.8% of them are married. Which explains the skewed percentage towards male. Median age of consumers is 45 years among whom 38% have at least 1 child at home. The average household income is $64,000. 43% have completed college and 13% are attending college. Although Walmart sits pretty at the top as the US largest discount retailer, to say they have not been challenged would be an understatement. They have been beaten on several occasions by Target but there is a key difference between Target and other competitive retailers like K-Mart or Costco which would be discussed later. But that key component has put a significant difference in the race between Target and others which allowed Target to chase top spot at their own pace. In 2002, Target posted a record 8.4% net profit over 7.6% of Walmart. At that time if Target started the competition head on with Walmart they would have easily fallen under the trap and would never break out from the clutter of other Retail Discount stores. Instead, Target avoided head to head competition with Walmart and slowed their pace. They went through extensive research to set their own goals and brand themselves in an innovative way. Here is how they did it. Bulls-eye Branding and Product Strategy: When asked about what kind of store Target is, the Vice chairman said Target back in 2002 had 3 strategic choices. First and second choice were offer cheaper discounts and grow rapidly by expanding and opening stores. Every corporation feeling the pressure of competition mostly takes first two and eventually gives up either by hiking price or losing quality. But Target opted for 3rd choice which was to become an Upscale, Mass merchandiser with a variety of price range which would match the lowered, discount offers of other stores. Targets customer base has a median age of 45 is the youngest median base. The customers are referred as “Guests” and are perceived as young and edgy and hippy. They belong to good educational and economic background. Which means they recognize taste and value in fashion, value and lifestyle. Chip Chic Strategy: The concept associates to styles, quality of products and price competitiveness. Through this strategy Target became a major brand for consumer shopping destinations. Target did not only expand in merchandizing, they thrived in providing massive ranges within each department. From Women clothing, accessories, shoes, fragrances and cosmetics through Babies diapers, cars-seats, feeders, toys to the designer home-goods and décor, Target offers a variety of price ranges of quality products which are upscale and affordable. Upscale Retail: Target entered in upscale retail partnership with Mossimo and Isaac Mizrahi and launched new clothing lines along with their private fashion labels such as Cherokee, Merona and Xhilartion. Target’s home assessment includes Brands created by famous designer Philippe Starcks of Starck reality which is only exclusive to their stores Kitchen-wears. Another designer Michael Graves provides home and office decors. Food: Recently Target partnered with Chef Ming Tsai and introduced Blue Ginger food line. It is and infusion of Western and Asian unique upper-class, classy flavored food. Discount: This is the bread and butter for Target. Target offers a massive variety of discounts at staggering and overwhelming low prices on items that were already on a lower price. Cartwheel, summer sale, Discount Cash-back, Coupons, fall and Holiday savings are all essentially are different types of discount offers. Target offers up to 25-35% off on everything during fall. They also offers 50% off for 2 for 1 offers and takes their game in to next level during holidays. During Holidays like Christmas or Black Friday, they can offer up to 65% off. Customer Experience: This is the ultimate factor that has produced a loyal consumer base for Target. The customer experience while shopping is the key difference that the customers noticed between Target and Walmart. The upscale designing, high ceiling, cleanliness in the store and top level Customer Relation Management system which offers professional Associates as oppose to ordinary associates of Walmart. This ultimately allowed Target to pick out their loyal consumer base who recognizes value and experience with the product.
If anybody is asked today what is “Expect more, pay less” almost 90% would be able to identify that as a slogan for Target. Target spends 2.3% of their net earnings on advertising in comparison to 0.3% of Walmart. Although in recent times, Walmart has been spending money more on advertising, the innovative approach and upscale presentation of Target is always one step forward. Through Marketing and communication Target managed to make Bulls-eye a lifestyle symbol. Over 95% of people on America and Canada recognizes Bulls-eye which puts Target in the elite group with Nike and McDonalds.