Target Builds Out Omnichannel Potential

Target has made digital and mobile a core component of strategic plans as it seeks to leverage technology's impact on retail.The mass merchant has been improving target.com's e-commerce capabilities in regard to speed, search relevance, product information and checkout. It also is steadily expanding the site's product assortment by adding exclusive online-only collections in categories such as apparel, home goods and bridal.In time for the holidays, the retailer introduced an in-store pickup option for target.com orders that put it on par with Walmart and other rivals. Target’s program was limited at launch to approximately 35,000 items including consumer electronics and home furnishings; it went on hiatus during the holiday’s busiest shopping period from Nov. 24-30.“Digital sales, particularly in our higher-margin discretionary categories, are already growing much faster than our total sales and we expect that trend to continue well into the future,” chief executive officer Gregg Steinhafel said during a recent financial call.Beyond simply upgrading target.com, the retailer is seeking more fluid integration between the store and online channels. Most recently, it made its entire in-store inventory viewable online. Although grocery and other items are not yet available for online purchase, visitors can browse the selections, compare products and build shopping lists.In stores, a “Shop With Confidence” sign package that rolled out last summer brings shoppers up to speed on the retailer’s digital presence while also addressing the showrooming trend by plugging Target’s now-permanent price match policy (first offered as a seasonal program in holiday 2012) and REDcard loyalty program. (See "Target Dreams ..." and “Target Scores ...” in Related Articles.)Sprinkled throughout stores, the P-O-P materials include stanchion signs, endcap headers and side panels suggesting, “Can’t find it? Shop more choices at target.com,” while encouraging downloads of the retailer’s mobile application and use of the free in-store Wi-Fi rolled out last year. (See “Target Mobilizes Stores …”) The company has said its own website is the most-visited destination through the Wi-Fi network.Circular features, print ads in magazines such as Time Inc.’s People and display ads on consumer websites such as ivillage.com support. A video on the retailer’s YouTube channel plugs the mobile app. (See below.)The app has been updated regularly, most recently with location-based features and integration with Cartwheel (see “Doing Handstands …”) that lets users see related offers while building shopping lists. “We have seen redemption rates in excess of 50% for [Cartwheel] offers downloaded by guests while they are shopping,” executive vice president of merchandising Kathy Tesija said during an earlier earnings call.Target also is directly imitating e-tail giant Amazon.com’s “Subscribe and Save” program with the recent launch of a subscription service that lets parents place recurring orders for some 150 baby care items such as diapers, formula and wipes from brands including Mead Johnson’s Enfamil, Kimberly-Clark’s Huggies, Procter & Gamble’s Pampers, Abbott Laboratories’ Smilac and private label Up & Up.The retailer additionally has been buying up e-commerce businesses including Chefs Catalog, Cooking.com and DermStore.com, and this holiday plans to create brand portals on target.com for those sites. It also is exploring the possibility of using stores as pick-up centers for those businesses.Meanwhile, a test initiated with 150 SKUs last year via eBay’s marketplace will grow to 100,000 by this holiday. “This represents a new revenue stream for Target and it introduces a new guest base [that] is predominantly men to our brand,” president of multichannel Casey Carl said during the aforementioned call.In 2014, the retailer also plans to reap benefits from its participation in the Merchant Customer Exchange when the consortium rolls out its planned mobile wallet. (See “Big Retailers Unite …”)

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