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Slideshow: Target right on the mark as SN Retailer of the Year

From new store formats to e-commerce and privatel label, Target continues to innovate the retail landscape

From its omnichannel innovation and enhanced grocery offering to its reimagined stores and robust financials, Target Corp. has demonstrated a level of excellence that propelled its selection as the Supermarket News 2021 Retailer of the Year.

In fiscal 2020, Target boosted sales by more than $15 billion, topping its cumulative sales growth over the past 11 years. E-commerce drove about two-thirds of that gain, but brick-and-mortar played a central role, too. Stores fulfilled 90% of 2020 sales, and through the first half of 2021 that rate climbed to 97% — showing how in-store and e-commerce channels can work hand in hand.

That notion is championed by Target’s “stores as hubs” strategy, which positions retail locations as showrooms and service centers as well as digital fulfillment sites. This approach has fostered high customer satisfaction with Target’s same-day services — Drive Up (curbside pickup), Order Pick Up (in-store pickup) and Shipt (on-demand delivery) — and lifted their sales by a combined 235% last year and over 72% through second-quarter 2021.

For more e-commerce efficiency, Target is testing what it calls a “sortation center” at a facility in Minneapolis. Under the model, backroom store staff who process digital orders focus on picking and packing, and online orders are then brought to the sortation center for collating to various carriers for delivery. Plans call for Target to open four more sortation sites in 2021.

Stores also are a core of Target’s investment plan, to the tune of about $4 billion annually over the next few years. That includes fulfillment upgrades, an enhanced shopping experience, remodels and new locations, the latter led by convenience-focused small formats with highly curated product assortments based on the surrounding communities (including college campuses).

On the grocery side, Target saw food and beverages grow to 20% of total sales in 2020. The retailer’s fast-growing Good & Gather brand has been a catalyst. Already, the two-year-old label has added ancillary product lines (premium, organic, kids and plant-based) and become one of Target’s largest own brands, exceeding $2 billion in sales. The company also has modernized its grocery presentation and bolstered its in-store perishables offering, as well as added fresh and frozen food to same-day services.

Notably, Target has built on last year’s gains through the first half of this year while other retailers have seen flat or negative sales results after cycling the pandemic’s impact.

“We don’t see our business as brick-and-mortar and then e-commerce. We think of Target as an omnichannel retailer, and our stores play a critical role in that strategy,” Rick Gomez, executive vice president and chief food and beverage officer at Target, told SN. “And I think that’s a unique approach, to leverage our stores in a way that creates a great in-store shopping experience but also a great digital experience.”

All photos courtesy of Target.

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