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Target’s On-Demand Strategy For An On-Demand Customer

Having a reputation as a brand is tough, even when that reputation is generally a good one. It is hard to argue against the idea that it is a good thing to have customers expect good things from your stores. But with high expectations comes high pressure and failing to deliver (even just a little bit) can push a formerly beloved brand into a long fall off a high pedestal.

Just ask J.Crew – a firm that spent the week demonstrating that even extremely popular brands are one ugly cropped sweater away from a collection of headlines written in language generally not seen outside of the Book of Revelation.

Target, as the nation’s fourth largest retailer, knows something about having a reputation to live up to. Consumers, if polled, all tend to review Target as mass retail’s classiest cousin — the place where consumers can generally count on the highest intersection of price, selection and a pleasant in-store experience.

But maintaining and capitalizing on that reputation faces challenges as society continues the great digital transformation – and the data has shown a persistently decreasing number of customers are making the trek to physical retailers.

Which can make Target Senior Group Manager of Innovation and Strategy Stephanie Farsht’s first comment in a recent conversation with MPD CEO Karen Webster seem a little surprising. Webster asked Farsht about Target’s developing and changing relationship with its customers and their bigger picture pursuits with innovation.

"We know that we are only going to be successful long-term if we continue to drive traffic to our stores. Which sounds almost like we are talking about our plan 10 years ago,” Farsht told Webster.

But, she went on to note, the tools of the trade when it comes to reaching and developing those customer relationships has totally changed over the last decade — and Target has come to realize that their place in a consumer’s life in commerce needs to evolve with it.

"We have to become an omnichannel retailer that really embraces our stores and what our consumers want, which is on-demand shopping. Overall, our in-store experience has to improve, and the way we believe we create that is by enabling on-demand shopping, on-demand delivery, on-demand [product] research and on-demand payment."

The change that digital has brought, Farsht told Webster, is that it has made consumers used to converting their desire for goods or services into a purchase almost instantly. Consumers have also gotten used to being able to customize their preferences for their specific needs and wants for commerce. For example, sometimes, a shopper is traveling with two sleeping children in the backseat and wants nothing to do with getting inside of a store; she just wants her goods brought to her car as quickly and quietly as possible. That same shopper may return to the store two days later looking to buy groceries, fill prescriptions and get inspired for good ideas on how to decorate her living room while waiting for said prescriptions to be filled. In that case, being in the store is both appropriate and desired.

The experience Target is creating — and wants to specialize in — does two things well.

One, it customizes the experience the shopper is there for.

So for the curbside customer, the prioritized value is efficiency.

"We can really predict when our customer is driving up to the store. A lot of our competitors have a capability where you pull into a parking spot, dial a number and then you have to wait. It’s great and it is meeting a need, but the customer has to wait,” Farsht told Webster. “But, if she is in the car with two sleeping children, we need to know when she is pulling up and then bring it to her car – she can’t wait 10 minutes, because that is too long."

For the in-store customer, on the other hand, the prioritized effort is on curations and customization for a consumer that is likely using a smartphone as a shopping assistant.

"Families are time constrained and they want a curated and edited assortment that puts it all together. And that is where Target has always excelled,” Farsht told Webster. “This is about a combination of leveraging efficiency and functionality so that the customer can get rid of needs while shopping so we can enable her to experience the fun of shopping."

The big-picture goal, Farsht notes, is that Target aims to recognize which type of experience the consumer is there for — and then provide it for them as seamlessly as possible.

"Our goal is to filter out all the noise and let her get what she wants in a relevant format without any extra irritation,” Farsht said. “It is a lot of little things that make the difference."

Target has a reputation for giving consumers a good experience by allowing them easy access to a wide variety of wants and needs, but Farsht told Webster it is always expanding and modifying how it provides those things. Some things work, some things don’t and others don’t work as originally designed, but then re-emerge after years of tinkering.

“We’ve tried many things that are successful today, but rolled out too early – so we had to regenerate and recreate the same content later,” Farsht noted.

And some things they’ve moved away from — the store within a store, Farsht said, is a concept they had working in some locations, which has since given way to a unified Target experience.

But the fundamental idea hasn’t changed. And though the marketplace is changing, Farsht says, Target is comfortable making the same bet they’ve always made: If you can offer an above-average buying experience in a below-average cost environment, consumers will keep beating a path to your door.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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