Over the next five years, Target Stores is likely to increase by 500 units, double its sales volume, and increase market share in categories such as food, apparel, consumer electronics, home improvement, toys and sporting goods. In addition, according to a new study from Retail Forward, the global consulting and market research firm, Target will grow both through same-store sales and new store sales.
Sandy Skrovan, Vice President of Retail Forward, said that Target’s clear goal is to build on the differentiated offer that has served it well to this point.
“Target has hit the bull's eye with its differentiated offer, winning brand strategy and merchandising strengths,” Skrovan said. “The company has developed a compelling strategy and business model that allows it to co-exist in the crosshairs of archrival Wal-Mart. Clear opportunities exist for Target to grow same store sales, drive more shopper visits, increase average ticket, and make its existing space more productive.”
Among the conclusions reached by the report:
Sandy Skrovan, Vice President of Retail Forward, said that Target’s clear goal is to build on the differentiated offer that has served it well to this point.
“Target has hit the bull's eye with its differentiated offer, winning brand strategy and merchandising strengths,” Skrovan said. “The company has developed a compelling strategy and business model that allows it to co-exist in the crosshairs of archrival Wal-Mart. Clear opportunities exist for Target to grow same store sales, drive more shopper visits, increase average ticket, and make its existing space more productive.”
Among the conclusions reached by the report:
- Enough market opportunity remains in untapped and under-penetrated geographic pockets for Target to more than double its store base in the US. In five years, Target could be a $65 billion retailer with over 1,500 units.
- At projected growth rates, Target should saturate the US in the next five to 10 years. In order to sustain the lofty growth rates expected by shareholders, Target likely will need to begin exploring cross-border opportunities in the next five years. Canada seems the most likely target.
- To drive same-store growth, Target will need to apply its trademark marketing and merchandising skills to more categories and more consumer segments, gaining share of wallet and retaining shoppers as they progress through different life stages and lifestyles.
- Accelerated SuperTarget expansion is expected to drive store traffic, increase shopping trips, and foster cross-shopping behavior. In a slow-growth food environment, Target will need to grow through market share incursion, attracting shoppers away from traditional food channels.
- To keep its guests coming back for more, Target will continue to cement relationships through initiatives like multi-channel operations, guest relationship management, and smart card technology.
- KC's View:
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The lesson here for all retailers is that exploiting differential advantages is the only way to raise the likelihood that one can survive the heightened and treacherous competitive environment.
The interesting thing is that this is the same lesson that can be learned from retailers such as Superquinn…HEB…Ukrops…and a number of others can come to mind.
For example, there was a story in the Indianapolis Star the other day about David Marsh of Marsh Supermarkets, in which he said, “The major chains care only about driving cost out of the system. Our focus will always be high-end service, high-end quality and a store where consumers are No.1.”
There is no room for “same old, same old.”
