In a stunning turn of events, Target has decided to shut down two major long-term projects. While the retail giant had been working for quite some time on injecting innovation into the company, the less-than-stellar holiday season may be to blame here.
Target’s part-showroom/part-warehouse concept, called the “Store of the Future,” was set to be a place where robots would select items for customers to pick up at their leisure. This sounds eerily similar to the Amazon Go grocery store concept, where cashiers are taken out of the equation and items are checked out via Amazon accounts. Various sensors are in place all over the grocery store picking up what’s put in the cart along the way and then the credit card on file is charged upon exit.
Why would Target decide to shutter the doors on the “Store of the Future,” and did the competitiveness of Amazon factor into that decision?
The maintenance cost to upkeep robots may have outweighed Target’s projected profits. By Amazon eliminating cashiers and having customers pick out their own items, it can save money that would otherwise eat into profits. So, perhaps, Amazon did this concept quicker and in a more intelligent way.
The second long-term project Target decided to permanently put the brakes on was its internal startup, Goldfish. After a beta test with its own stores, this project was set to become a marketplace where retailers could list goods for sale. Most of the executives working on this and Target’s “Store of the Future” had absolutely no clue as to why both projects got the axe, according to Recode.
Target, however, released this statement:
“At Target, we regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources. We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities. Target remains absolutely committed to pursuing what’s next. We see a tremendous opportunity to drive innovation in areas that will fuel our growth both in the short and long term in areas such as digital, technology supply chain and merchandising.”