Once Upon a Target...

The retail world is thoroughly enamored with Target.  And with good reason.  The retailer reported 2005 1st quarter revenues from continuing operations were up 12.7% to almost  $11.5 billion.  At a time when even Wal*Mart, the largest corporation in the history of the species, is struggling, Target rolls on.

Why?  Well, ask most people and they'll tell you the answer is simply: design. 

Target, they say, has captured the customer who is looking for more than simply low prices.  That customer is looking for elegantly designed product, products by big-name designers like Isaak Mizrahi, Michael Graves and Cynthia Rowley.

I was in New York on Monday, so I decided to have a look at the Target House, a design showcase for their new home decorating motifs.  Roughly ten sample rooms were cleverly housed in a tent at the corner of 6th Avenue and Grand Street.  Outside the tent, there were lots of red T-shirted folks inviting passersby inside, and interesting things to look at, like this Target Mini Cooper.  All in all, a pretty cool idea.  Then I went inside.

Once inside, I started looking at the different room displays, and was a little taken back. "This looks terrible," I thought.  Absolutely schlocky."

And, the more I looked, the worse things got.  There were things like this:

And this:

And this:

Now, I was not looking for the most hideous things I could find.  I was just taking pictures of what was there.

Where the hell was this "design aesthetic" everybody's been raving about?

OK, so today, I went to the new Target superstore near my home in Stamford.  This is one SUPER store: it must be right on to 200,000 square feet, on two floors in downtown Stamford.  It's huge.  And it's a beautifully designed store. 

The aisles are wide, the displays are attractive, the lighting is great and the place is immaculate.  The signage is colorful, clean, modern and very appealing.  The store looks great.

Now, according to this briefing,

from: Event Brief of Q4 2004 Target Corporation Earnings Conference Call - Final
source: Fair Disclosure Wire, February 17, 2005.
via: HighBeam™ Research

the average Target store of this size contains approximately 65,000 SKUs, or "stock keeping units."  A SKU is a particular item, like a large jar of Jiffy peanut butter.  A small jar would have a different SKU. 

So, I walked around this Target for about an hour, looking at the merchandise on every shelf in every aisle. 

I was looking for "distinctively designed merchandise." 

And, I didn't find very much.  I found one face-out (display case) of Michael Graves household tsotchkes.  I found four T-racks of Isaac Mizrahi sportswear.  A row or so of Mizrahi throw pillows with big orange flowers on them.

That was just about it.  Being generous, there might have been 500 SKU's in the store for merchandise that could be called, by the greatest stretch of the imagination, "designed."  OK, let's say I'm wrong by a factor of two, so that there are 1,000 SKUs by named designers. 

Now, that doesn't mean that the rest of the merchandise in the store wasn't "designed" by someone.  Of course it was. 

But you could have found that same merchandise at Wal*Mart.  Or at Sears.  Or at K-Mart.  There was very little to distinguish what you'd find at Target from what you'd find at almost any other mass retailer in its class.

1,000 SKUs in a 65,000 SKU store.  Hardly what you'd call "important."

But what Target's done is what retailers call, "name it and claim it."  Target's told us the following story: "We're the hip mass retailer who gets design.  Come into our store and find all kinds of really cool designer stuff."  They named themselves the "cool design" store and now get to claim that market position.

They've told us a very good story.  And most of us believe it.

As Seth would say, this is one really, really effective lie.

UPDATE: For more on the Target story, see this. 

Comments

[Kull]

Wal-Mart, Sears, or K-Mart can't hold a candle to Target.

But those rooms pictured above are disgusting for sure.

[Tom Guarriello]

I'm interest in what differences you see between them.

[Kull]

Maybe I am just a sucker for their "hip advertising" campaigns. I don't know if I can put a finger on exactly why Target is better than WalMart of KMart. (I don't go into Sears stores enough)

I think of "the marts" as more lower class, bargain basement type shopping. The extent of my purchases there would be household cleaning supplies, etc. But Target is a step above. For one, I can buy Ipod accessories there as well as some other decent quality electronics. But I suppose I could find some of those things at the Marts too.

Hmm...this is interesting. I guess I am just a sucker for Target.

[Heidi]

I think you may have found the key when you described the appearance of the store in Stamford.

"The aisles are wide, the displays are attractive, the lighting is great and the place is immaculate. The signage is colorful, clean, modern and very appealing. The store looks great."

This has been the impression I've gotten from every Target I've entered. I can honestly say I've never thought that about a Sears or WalMart, in fact I *hate* going to Walmart because they're usually so horribly designed. I'll gladly pay more to avoid going there.

Who knows, maybe the Target execs believe that putting the "design aethestic" into the space itself will be enough to draw consumers. Throw in a few 'designer' names like Mizrahi and Graves and the image is complete. People won't notice (or care) that the majority of the merchandise on the shelves is the same schlock they can get everywhere else. Sometimes the lie really is enough...

[Tom Guarriello]

Excellent point, Heidi. I think what we have here is a great example of the power of the lie to establish a brand's position in the customer's mind. And once that position is established, it's very hard to break the connection, or for another brand to dislodge it.

[Laura]

I think Target offers the lower-to-middle-class consumer who has taste but not money an excellent alternative to shopping at Kmart and Walmart - which both have ghetto & trailer trash stigmas attached to them (regardless of Martha Stewart's brand presence...wait, or maybe, because of...) and also crappy clothing brands like has-beens Kathy Ireland and Jaclyn Smith -- who wants to emulate those ladies now?

It's a crazy marketing and merchandising success story. I have red-bullseye-colored glasses. People like me who can't afford boutique Mizrahi are drawn to Target by the Mizrahi clothing line by the hip & cool ad campaigns. Isaac has the primo position in women's apparel and shoes but very few pieces. Looks pretty good on the rack but really awful in the dressing room, and I'm disappointed because I know from reading about fashion that if I want to be a hip, youthful woman I should like and wear Isaac.

But then I find clothes I want in their other lines, like Merona, the cheap stuff for the career gal, and it's very nicely designed. The Marts don't have it -- or if they do, I don't see it because all I see is old queen-sized Jaclyn.

Target has also brilliantly mastered the impulse buy. A shelf full of 300 bottles of Method cleaning products in a well-lit aisle with fun music playing makes me think "I can't wait to clean!!" so that my house is as shiny and fresh smelling as the Target store. Even regular stuff like Cheer detergent looks appealing there. Buying this stuff anywhere else is a drag.

But I don't feel like I'm being lied to -- that's the genius of it. I'm lured to the store by the promise of finding some affordable jewels, and in the process I also fill a cart with everything from giftwrap to garden items. I leave the store with $200 of stuff, most of it I don't need. And I don't feel like I've been suckered. After all, because I use my Target Visa card, 1% of all dollars I spend goes to a local school, and I also get coupons in the mail so that I come back to Target and buy more plastic dinnerware. I believe I'm getting unique products and real/perceived rewards. Also, by not putting a Target in every single town, they've even made me travel twice as far as it is from home to WalMart to get to their store. And I always leave thinking that Target kept its promise.

That's amazing.

I don't think it's the Cynthia Rowley "a cotton candy machine blew up in my bedroom" look that's appealing at all, but the design of the whole experience.

[Kristin]

I love Target (say with an accent) much more then K-Fart (which causes me to swear each time I go into it so I only go when I need those Grandfather pillows from Martha) and Wal-Mart is too crowded, unclean and overwhelmingly cluttered feeling. Our Target is in a former Bradlees so it isn't a big one by any means, but I love to hit the "design" aisles just to see what they have. The aisle full of designed home goods and the other aisle of seasonal design stuff. And for some reason the shampoos look better there even though they are dangerously close to the pet aisle. I tend to just buy the normal stuff there like cleaning supplies and cheap wrapping paper, but I am a sucker for the $5.00 t-shirts for each holidy kinda like the ones you can get at old navy too. A fun purchase to be trendy for only a little dough. Reminds me I need to go get some Drano.

[Tom Guarriello]

These comments are great! Thank you.

I'm impressed by how the Target store experience affects you. The wide aisles, colorful decor, terrific lighting and overall cleanliness (in conjunction with an absolutely killer ad campaign) seems to have lodged Target in all of our minds as a cool place to get cool merchandise...even if the merchandise isn't all that cool. "The Marts" clearly have a low class stigma among my commenting readership, while Target keeps its brand promise.

I like the comment about the "300 bottles of Method cleaning product," which, again, is very much in keeping with their ads. Somebody once said, "a lot of anything is interesting," and Target certainly knows how to merchandise large quantities of product, despite its low number of "remarkable merchandise" SKUs.

I also received an interesting comment from a Target employee who preferred to remain anonymous. She said she, "felt the same way about the design house" as I did. She also said she hears "where's the product?" from her friends all the time. But, obviously, we're looking at the store with "insider" eyes, not with the eyes of the typical customer.

So Target's marketing story (what Seth calls the "lie") is really doing the job well.

Thanks again for your thoughts.

[Marie Rao]

Once again, it"s the "store experiece" @ Target that everyone is referring to here. So if you have to buy Windex,better to do it in a nice big clean store with 100 flavors of Windex. Very few people are falling for the design bullshit. I think when so many stores are offering the exact same product the consumer opts for the store experience. wow. A lesson to be learned here for every so called specialty store. Marie

[SALTY D]

Having just returned from a two hour shopping experience with "BLAUGRA" the Target queen. I'd have agree that the Marts do have a stigma. Even though we're still shopping with the Traler Trash it somehow seems hipper and OK at Target.

[Tom Guarriello]

Here's the store experience popping up again ("feel hipper, even with 'Trailer Trash'") as the key differentiator. Remember, except for the very highest end stores, practically every store out there has a huge merchandise overlap with every other store.

What counts is how you feel going there and Target's solidified that position, for sure.

Thanks for stopping by, Salt!

[Beth]

Alright, I have to put my plug in for Wal-Mart since I used to live in Arkansas near the headquarter...

I am a Target girl from way back. I thought I liked Target because their stuff was nicer, hipper, and cutting edge. But basically I liked Target because they did a good job of marketing to middle-class women, like me.

Living in AR, I was forced to shop at Wal-Mart because there were no other Marts or grocery stores within a 30 mile radius. After getting over the stigma, I realized that Wal-Mart actually has some nice stuff. Their McKids line of clothing and shoes sounds junky by the brand name, but is actually (so I've heard) made in a GAP plant in Mexico. Same quality, different name. Their diamonds and other fine jewelry are supposed to be superior quality. And it's hard for me to admit this but I've actually purchased several clothing items for myself at W-M, as well as home furnishings in addition to the grocery/drug store stuff you go to Wal-Mart for initially.

The fact is, Wal-Mart does target a different group of people than Target. Target is after the folks who want designer stuff cheap, want their home to look accessorized, and want to pretend they're at a luxury marketplace - not a place where you buy tires. Wal-Mart's big thing is their super low prices - that's it. Plus they love the customer.

As far as KMart goes... well, they've got that "merger" with Sears that could be interesting if they market it right (appliances & garden shop - all at the same store!) but who knows. KMarts problem was targetting the same crowd as Wal-Mart and then getting beaten to a pulp. If all the marts go after a different sect of people, there's room for all of them, in my opinion.

Now that I live near all the Marts and Target, I am back to being a Target girl. Why? I don't know. Part of the pull is the snazzy credit card they give you with the free products each week. Also I like that a portion of my purchases go to my kids' elementary school. Mostly it's because I had to shop at W-M for 4 years and I needed a break. But I do find myself whining that their inventory is always low or out of stock at my local Target.

Interesting topic!

[Maggie]

I love Target for several reasons, but here are some main ones:

1) ADVERTISING: the hippest and coolest anywhere--very visually appealing--whoever they've hired, they better stick with them for awhile 'cause they've got it goin' on....I love when a new commercial comes on and I try to guess if it's Target or not (before I see the bullseye, of course). I can usually tell because they are SO COOL and design-savvy. I think that definitely imprints on our brains the message that "Target is cool-- I like going there"

2)SERVICE: I rarely have to wait in a line at the checkstand, no matter how busy it is. This is one store that's not afraid to hire a few checkers and use them. Also, if I need help or have a question while shopping, I can usually flag down someone who actually knows what they're doing and doesn't act like I've just ruined their day by asking for help. Try that at Sears or Wal-mart.

3) STORE SET-UP/CLEANLINESS: This is why Kmart can't keep up, from my experience. I HATE going into a cluttered store...makes me feel uncomfortable, like no one cares about it so why should I wanna come in here? Too much cr@p everywhere overwhelms people (reminds me of my cluttered house!), while neat, orderly, attractive displays that make sense help us feel comfortable....we don't mind staying awhile. (I'd be ashamed to confess how sometimes I spend a LONG block of time in one Target store..I'm having such a good time that I don't care to leave!) And yes, I buy things I don't really need almost every time I go. I've spent $200, but couldn't tell you what I bought, yet I don't feel like I've been coerced or in any way ripped off. They have perfected the art of combining those things we need with tempting things we don't, and they come out the winner.

EVERY TIME I COME OUT OF A SEARS STORE (WHICH IS LESS AND LESS OFTEN) I feel frustrated by their terrible service and vow not to return. Hire some people and train them to do their jobs-- not stuff your clothes into a shopping bag because they're too lazy to fold them! (especially when I've just spent a couple hundred dollars in your store--who do they think pays their salary?) I used to go there for my kids' clothes, but not any more.

[Joseph Almond]

I regret reading your article. Now I'm late for work! Damn you.

[Jeremy Hubert]

I'm Canadian, and I don't believe we even have Target up here. With that being said, I've been to one of two while I was down in the states.

I think the mere fact that the word "Mart" isn't in their name is a push in the right direction. One of the biggest American stereotypes that I know of is "the fat family who shots at Wal-Mart and eats at McDonalds." (Not intended to offend anyone here)

I think by providing exactly what WalMart provides, but in a style closer to a department store (Sears?) they are getting a large portion of the market share without the stigma of a "mart." "Heck no I don't shop at WalMart, I shop at target."

Their branding and easy to remember name is probably a key factor in it as well.

Also, just because I'm a stickler for these types of things...

That's not a Mini-Cooper. It's a Mercedes Smart ForTwo. I'm not sure they are officially releasted in the states yet. http://www.smart.com

Jeremy

[Daniel]

As a frequent shopper of the 'Marts' I tend to agree with many of the sentiments here: it's the design that makes the difference.

Target seems to be just a bit more classy due to its attention to asthetics. Whereas with Wal-mart, it seems that the lowest price is what drives the product off the shelves.

I appreciate Target's product line, and as long as the prices are relatively competitive, make mine Target!

[Allison]

I shop both Target and K-Mart. I agree Target feels more spacious. But a lot of people are missing out due to bigotry and insecurity, it seems, by not being open to K-Mart as well. I collect domestic textiles: my dining room table currently has a $12.99 tablecloth on it, from K-Mart. (It's not Martha Stewart, but her dishtowels, in particular, are collectibles.) It's a gorgeous paisley. Target has nothing to compare. Williams-Sonoma has a more boring paisley for 5 times the price.
The models whose names grace K-Mart's clothing lines may be "has beens"--but I mix K-Mart clothes with much more expensive clothing bought elsewhere to enjoy an extensive wardrobe of fine clothing. My husband loves rayon shirts: K-Mart is an incomparable source.
I have problem feet: I couldn't wear the $300 Mephistos I bought last year. My K-Mart Cobbie Cuddlers--less than $20--may not look smart, but I'm smart enough to think for myself and buy what I like at the better price.
Target's much vaunted clothing has been a disappointment, only in part due to the heightened expectations of their hype.
Don't be influenced by the smarmy, condescending hatefulness of people like Jay Leno, who seem to need to build themselves up by viewing K-Mart shoppers as "trailer trash". If you miss out due to others' negativity, it's your loss.

[Amanda]

just an FYI. that is not a mini cooper. it is a Smart Car. please edit

[violett]

OK OK OK. You're all right to have your opinions about Target.

The bottom line is that Target has made design affordable to the masses. This mass class has bought into the retailer for a variety of reasons. Target makes shopping ez. Target is a great name for stores that are indeed targeted to demographics.

Kids are loving the Target shopping experience. They don't find it martish...or too on the cheap. Rather they buy into the cheap chic and flash that the products offer. Target is brilliant in their effort to appeal to the youth market. These kids are the consumers of tomorrow. They buy brands. They buy Target.

The Target cache far exceeds the other marts, because it is socially acceptable, stocks high profile designer goods and knows how to merchandise. Because of their cleanliness and merchandising, Target makes it clear to the consumer what their selections are within clear cut, concise product categories.

Not always the best prices, yet time is money, and the ease of shopping along with the variety of selections offered make Target an all around winner.

Regarding your photos of the NY store, I agree-yuck. Looks like they were in a really big hurry to throw things together.

violett

[Jim]

As a senior man who does a lot of shopping and some traveling here are the things I like about Target:

1. Easy to get into even during Xmas season. 2. Easy to navigate the aisles and find merchandise. 3. Easy to get out of. 4.It's CLEAN or at least seems to be. 5. Its well lighted--the "marts" seem to be saying "we have to save on electricity to turn a profit". 6. There's no one pushing a cart into my hands when I walk in the door but I usually can find a clerk once I get to where I want to go.

Speaking of big "lies"---why is being employee-owned supposed to be an advantage for the shopper? Wasn't United Air Lines employee owned? Were there passengers any better off for it?

Targets New York "showplace" is another bad marketing idea by some Minneapolis based VP who has too much time and too much corporate money on his/her hands but loves using the expense account to visit Manhattan frequently.

Jim

[Ruth]

Just visited Target and was told to eat the $140. HP movie maker I purchased because my receipt is 15 days past the expiration for returns. Sales clerks tell you if you keep your receipt, you can make a return. Can't do it. I have to keep a worthless item that was never opened, even though I have the receipt.

I will always go to WalMart in the future. I could have returned this unopened item two years from now at WalMart and been given no grief. I'll also tell everyone I meet that Target will take your $$ and smirk. The in-store management did exactly that. I regard Customer Service as the ultimate, and this is the second issue I've met with on Target's Customer Service. I'm not giving them a third chance.

[Moon]

I think I've always known that 90% of what you find at Target you can find at Sears or the Marts. (And overall, I'd bet it's the same story on the prices too) I'm pretty much a plain kinda guy so I really don't give a rat's a** who designed my toaster, I just want it to work well and be reasonably priced. So for me, the "designer" aspect never even enters my mind when I head out to make a purchase. If I'm heading out to a department store, I'm more concerned with the experience. I don't even know where K-Marts are anymore. Sears are usually attached to malls, which I avoid if I can just for getting quickly in and out. That leaves Wally World and Target. I always avoid Wal Mart if I can at all help it. To me the Wal Marts always seems more crowded, more cluttered and messy and just much more difficult to deal with. Not from a customer service standpoint (though I can never find a short, quick checkout line) but more from a standpoint of finding and getting to what I want and getting out. Target seems to have a better layout, better "traffic flow", less stuff thrown on the floors in the aisles, less people and kids crammed into those aisles...Target, for me, is just much easier to deal with. So as someone who doesn't care about "fancy" designer stuff, I think they all have mostly the same stuff for sale at mostly the same price. Target just makes it easier for me to get to and buy that stuff and get out in a less frustrating manner.