Target was originally founded in 1902 as the Dayton Dry Good Company. Since then, the company has changed their name (adopting the name of it’s most successful division in 2000) and become the second largest discount retailer in the United States. Here’s a little more about the retail store.
The Target Difference
I remember when the first Target store opened in my home town of Jacksonville, Florida. They were competing with Wal-Mart, but very quickly, I came to recognize them as the “high class” discount store. Back then and still today, I notice two key differences between Target and Wal-Mart.
First, the aisles at Target are wide and clear, while the aisles at Wal-Mart are filled with Doritos and underwear displays. Secondly, their parking lot is free of obstructions, while the parking lot at Wal-Mart is littered with shopping carts like shrapnel on a battle field.
Target creates a different shopping experience for customers, and you can see it on the ceiling and in the shopping cart. Though it’s cheaper to leave a warehouse ceiling open, Target installs a drop ceiling in their stores to create a higher-end look. You will sometimes find a Starbucks inside a Target, and that alignment is as just as much about their brand as it is about the coffee. And their new, all-plastic shopping carts are just cooler than other stores.
The Growth of Target
After initial success and quick growth, the company experienced a decrease in profits in the 70s as top executives entered the job with little retaining experience. The Dayton Dry Good Company actually considered selling off the Target division, but a new CEO led a turnaround, marked by selling off inventory at a discount and refusing to open new stores. After the company got back on track, they continued to grow through acquisitions.
In 1995, the first Super Target opened in Omaha, Nebraska. Today, Target continues to undergo change, closing most of their garden centers and adding fresh produce. The first City Target, a smaller, downtown store in landmark buildings and not strip malls will open in 2012. This seems like a great strategy for entering large urban markets like Chicago and Los Angeles.
Three Lessons from Target
1. Your brand is bigger than your logo. Target’s simple red logo is recognized by more than 94% of Americans, but Target’s brand is much bigger than their logo. It’s just as much about the ceiling and the shopping cards and the length of lines at checkout as it is about the simple Helvetica font. A brand is as much about a promise and operation as it is about colors and style.
2. A changing strategy is necessary for success. The history of Target is filled with change – in moving from garden centers to fresh produce and from regular stores to super size stores to smaller urban stores. Growth requires both consistency of values and a change in strategy.
3. Diversify and focus. Target focuses on the customer experience, while diversifying at the business level. The company also owns Target Financial Services, Target Sourcing Services, Target Commercial Interiors, Target Brands and Target.com. These are different, but related companies, who grow in relation to each other. The success of one company or division is directly related to the success of another company or division. Even in creating distinction, we need to be unified in mission.