Last Friday, Target's highly anticipated "new generation store" was inaugurated in Richmond (Texas): different customers, separate entrance points and "grab and go" food. All within a sales area of over 11,500 square metres.
The - sometimes radical - innovation of the format of the points of sale is one of the strategic objectives of the great American brands. Over the last two years, the "Retail Apocalypse" has caused serious damage to, and in some cases the disappearance of, large chains that are embedded in the history of US Retail. The overall positive performance of the sector globally, penalised reluctance to change and rewarded those who were most the most willing and quick to employ new operating models. This is added to the structural cause of excess supply, which makes differentiation a vital element of competition, if not survival.
Target is one of the most important American retailers (in 2016, it had a turnover of 70 billion dollars with 1,800 outlets and 350,000 employees), and their new store is part of the 7 billion-dollar investment assigned to the project for restructuring the distribution network.
The new hypermarket has two separate entrances. The first is for buyers who, with the appropriate time, are looking for motivation to make various types of purchases. There are large spaces, a wide selection of products, and more circular central corridors with merchandise displays to engage guests with unexpected promotions. The best way to sell even the 12 new Target private brands, including lines that are accessible to disabled children, and lifestyle products that have a strong emotional impact with customers. This part of the hypermarket also features a Starbucks with outdoor seating.
The second entrance allows customers to quickly pick up what they have ordered online and buy "grab and go" food (due to a widespread habit of making quick, in-the-moment purchases of pre-packaged products and take-away food items).
With this new hypermarket Target decisively turns toward a new strategy of diversification, aimed at attracting different types of consumers at the same point of sale. The choice to focus on "grab and go" is one of the most obvious indicators. Since its debut, Target Grocery (making up only 20% of Target revenues) has above all been a convenient service for buyers who are already in the store to make a completely different type of purchase. But the spread of online shopping models with point-of-sale pick-up are continuously on the rise and, if proposed with a complementary offer, can be an important competitive factor.
"Grab and go" will be increasingly emphasised in the new Target stores, of which there will be 32 by the end of the year, many of them in smaller formats (about a quarter of the size of the Richmond store). With limited space, they will be highly focused on collecting data on the purchasing behaviour of local customers and consequently adapting their sales offer.