Target Thinking Big By Going Small

Target Shakes Up IT
Target plans to roll out hundreds of smaller stores.

When consumers think Target, they might want to start thinking small from now on — or, at least, smaller.

The big-box retailer has already opened 23 of its “flex-format” stores — smaller stores less than 50,000 square feet designed for urban shoppers — in metro areas, like Chicago, Philadelphia and Berkeley, California, and plans to open another nine such locations this year and at least 16 next year, according to Retail Dive.

Target CEO Brian Cornell told Bloomberg that Target plans to open “hundreds” of these smaller locations across the country in the coming years that will both cater to local customers and their neighborhoods, as well as serve as pickup locations for online purchases.

For example, Cornell noted, Target’s “flex-format” store in New York City’s Tribeca neighborhood would likely carry more merchandise geared toward babies and children, because so many young families call the neighborhood home, while the flex store close to the University of Maryland would likely stock more products geared toward college-age students.

Target seems to be eager to take advantage of other major retailers pulling out of or reducing their footprints in urban areas due to rising rent prices and a migration toward online shopping habits (Walmart ended a similar experiment with smaller stores this year).

Ken Perkins, a retail industry analyst, wrote in an industry note in July that small-format stores have a proven track record of success and that there was reason to be “optimistic” about Target’s success in the market.

“Sales productivity levels are double those of traditional stores, and the product mix is more attractive,” Perkins told New York Post in July. “We are optimistic about the growth prospects of Target’s urban and flex stores.”


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