Target may have hit a low point several years ago when news of a major credit card breach hit the airwaves and reduced annual profits by 34 percent. However, that’s ancient history compared to the retailer’s recent performance.
The Associated Press reported that Target is in the midst of a sales revival, with each of its last five quarters resulting in successive sales increases. The improvements come on the back of several wide-ranging changes courtesy of new CEO Brian Cornell, who was hired in 2014 and immediately began improving both the look and feel of shopping in Target stores. Not only did the company move away from shelf displays and toward mannequins for its apparel departments, but it’s also partnered with boutique brands and expert designers to boost jeans sales by 10 percent.
Adding mannequins to its displays alone generated a sizeable boost in sales. Before the holiday shopping season, the improved displays drove 30 percent more sales than before, and home product departments outfitted with similarly improved sectionals saw three to four times more activity than usual.
“It’s easy just to follow your competition,” Cornell told The Washington Post about the changes made to Target’s stores over the past year. “It’s really, for us, more important to make sure we’re differentiating ourselves.”
That differentiation is expected to land Target at least $2.99 billion in post net income for the calendar year ending in February, a 22 percent increase over the previous period. Revenue, too, will climb 2 percent to $74.17 billion.
The challenge for Target and Cornell at this point, however, is to find ways to keep challenging consumers’ expectations. As Brian Yarbrough, senior research analyst at Edward Jones, told The Washington Post, taking Target to the next step will be a much harder task for Cornell than simply getting it off the ground floor of discount retail.
“I think he’s done an outstanding job so far — but some of it was easy, low-hanging fruit,” Yarbrough said.