Why Target Is Targeting Urban Customers

Target is placing a bet: Urban millennials ages 18–34 will drive its next major phase of growth.

A slew of new “City Targets” are scheduled to open in 2016, bringing the pared-down Target experience to more urbanites in the hopes of boosting sales for the big box retailer.

According to Philly.com, Philadelphia’s Center City will be getting at least three of the new City Target locations. Two of the new stores, scheduled to open in summer 2016, will include only a pharmacy, Target Mobile with cellphones and tech accessories and pickup for online orders.

“We do research on who the guest is and who is living in that neighborhood and develop the assortment mix accordingly,” Target spokeswoman Kristy Welker told the outlet. “It’s a younger demographic, millennial age, who are into tech and are why we are offering tech accessories, fashion and home items.”

The urban push began for Target, attests the Philly.com story, back in 2012 and has gradually expanded to 18 flexible format stores in Los Angeles, San Francisco, Chicago, Boston and San Diego.

Larry Steinberg, senior vice president at CBRE Inc., who negotiated the deal to bring Target to the specific Center City locations within Philadelphia, predicted that “Target will be able to reach into the neighborhoods of Center City with these convenient, smaller store sizes.”

“This strategy is also cost-effective,” Steinberg continued. “It gives Target access to the dense populations of Center City without the need to provide huge parking fields — with lots of expensive land — that is required by their large-format stores.”

But Target may not only be targeting millennials with its urban expansion plans. The chain also “[has] to appeal to shoppers of all ages to be successful,” James Cook, Americas director of research and retail at consultant Jones Lang LaSalle, remarked to Philly.com.

This may be doubly true in Philadelphia, where 42 percent of the city’s population is over the age of 40.

“Densely populated areas allow us to serve guests that have typically traveled out of their way to get to a Target store,” stated Welker. “Now, we are going out of our way to bring a Target store to their neighborhood.”