Target Corporation: Maintaining Relevance in the 21st Century Gaming Market
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Target Corporation: Maintaining Relevance in the 21st Century Gaming Market
Situation Analysis
Target Corporation is one of the largest US based retailer popular among suburban women shopping with their children including high spending teenagers because it offers one-stop shopping opportunity with a trendy, superior mix of premium high quality merchandise as well as discount merchandise for its customers. Target.com, the online, electronic retail store, Target Financial Services, that operates the Target Red and Target Visa card are its other business ventures. Its ‘high level stewardship’ coupled with ‘Expect More-Pay Less’ slogan differentiates it from the rest of retailors.
Video games are among the most productive categories in the Target Corporation’s chain of 1,744 Target Stores and Superstores as evidenced in its Total Sales, Sales Per Foot and Contribution Per Foot indexes which are 1.54, 1.55, and 1.3 respectively (indexed to average for group) and it is one of the two items that provide higher contribution margins and total revenues. Hence this is a significant item in the retail business portfolio. Folding in sales of consoles and accessories, the size of the overall game industry had reached $21 billion. Roughly 55 percent of this came from software, about 30 percent from hardware, and 15 percent from accessories.
However, the Video games can be digitally distributed, they could be shopped for, bought, received, and installed all on a home laptop, personal cell phone, or gaming console such as Microsoft’s Xbox 360, Sony’s PS3, or Nintendo’s Wii through online. Therefore, being mainly a brick and mortar store, Target is facing the threat of shrinking or losing this lucrative business due to this growing trend of online shopping and purchasing of games. The seriousness of the threat is clear when considering that faced by the brick and mortar recorded music retailers when the digital distribution and iTunes’s music retailing were introduced to the
Target Corporation: Maintaining Relevance in the 21st Century Gaming Market
Situation Analysis
Target Corporation is one of the largest US based retailer popular among suburban women shopping with their children including high spending teenagers because it offers one-stop shopping opportunity with a trendy, superior mix of premium high quality merchandise as well as discount merchandise for its customers. Target.com, the online, electronic retail store, Target Financial Services, that operates the Target Red and Target Visa card are its other business ventures. Its ‘high level stewardship’ coupled with ‘Expect More-Pay Less’ slogan differentiates it from the rest of retailors.
Video games are among the most productive categories in the Target Corporation’s chain of 1,744 Target Stores and Superstores as evidenced in its Total Sales, Sales Per Foot and Contribution Per Foot indexes which are 1.54, 1.55, and 1.3 respectively (indexed to average for group) and it is one of the two items that provide higher contribution margins and total revenues. Hence this is a significant item in the retail business portfolio. Folding in sales of consoles and accessories, the size of the overall game industry had reached $21 billion. Roughly 55 percent of this came from software, about 30 percent from hardware, and 15 percent from accessories.
However, the Video games can be digitally distributed, they could be shopped for, bought, received, and installed all on a home laptop, personal cell phone, or gaming console such as Microsoft’s Xbox 360, Sony’s PS3, or Nintendo’s Wii through online. Therefore, being mainly a brick and mortar store, Target is facing the threat of shrinking or losing this lucrative business due to this growing trend of online shopping and purchasing of games. The seriousness of the threat is clear when considering that faced by the brick and mortar recorded music retailers when the digital distribution and iTunes’s music retailing were introduced to the