Target Bolsters in-Store Experiences Through Strategic Collaborations

Target is facing increased competition from online retailers with faster delivery and a wider selection of products. Customers are also shopping less frequently in physical stores.

As a result, Target officials want to elevate their in-store experience to differentiate the retailers from competitors like Amazon and Walmart.

“We want the in-store experience to be pleasant and enjoyable,” Target Chief Strategy and Growth Officer Christina Hennington said Wednesday (July 10) at The Lead Summit in New York City. Her presentation, “Growth Through Partnerships — Leveraging the Right Collabs and Creators for Your Brand,” outlined Target’s push to enhance the in-store experience through its strategic partnerships.

Economic pressures are causing many consumers to tighten their belts on discretionary spending, particularly for nonessential retail purchases. The PYMNTS Intelligence study “New Reality Check: The Paycheck-to-Paycheck Report: Pessimism About Pay Rises Offsets the Effect of Falling Inflation” surveyed more than 4,300 U.S. consumers to examine their financial outlooks and habits. The study found that nonessential spending is a contributor to financial instability for many consumers living paycheck to paycheck.

Even more concerning, 10% of paycheck-to-paycheck consumers pinpoint nonessential spending as the sole culprit for their financial situation.

Meanwhile, the PYMNTS Intelligence study “The Replenish Economy: A Household Supply Deep Dive” found that nearly 42% of retail subscribers have reduced or stopped shopping at physical stores altogether.

After all, shopping online and getting items delivered is convenient.

“When things can show up on your doorstep the next day, what’s the reason for going into a store?” Hennington said Wednesday. “Because it’s super convenient. We want to give shoppers the opportunity to get support and services. It’s about being relevant to our customers.”

Target is revamping its Target Circle program to look more like, say, an Amazon Prime or a Walmart+ — a move that comes as same-day delivery sales rise, while other channels take a hit. This year, the new Target Circle 360 is a paid membership.

Hennington said Target’s in-store experience presents opportunities to create and strengthen customer relationships. Despite Target’s successful loyalty programs, the PYMNTS Intelligence report “At the Checkout: Deal-Chasers Versus Loyal Customers” found that customer loyalty programs alone don’t always win over shoppers. By creating deeper connections with their customers, businesses can create a competitive advantage, even for those not initially drawn to loyalty programs.

Target is redesigning store layouts for easier navigation, offering exclusive brands and collaborations and integrating technology for features like order pickup and drive-up. Partnerships play a key role in Target’s in-store experience. The retailer is strategically partnering with other companies to:

Enhance product offerings (Ulta Beauty, Marks & Spencer)

Increase customer engagement (Starbucks curbside pickup)

Cater to diverse customer needs (e.l.f. Cosmetics)

Collaborations with Ulta Beauty and Marks & Spencer bring new and exclusive products to Target stores, catering to a wider range of customer preferences. Hennington pointed to the Marks & Spencer Christmas in-store display that wowed consumers.

The curbside pickup partnership with Starbucks allows customers to combine their Target purchases with a Starbucks beverage, using the convenience factor increasingly sought after by consumers. After the guest places a Drive-Up order at a participating Target store and receives notification that it’s ready, a guest will indicate they are en route via the Target app.

Drive Up with Starbucks has proven highly popular with guests.

“It’s about the level of joy the Starbucks experience brings to our curbside pickup customers,” Hennington said.

Target’s long-standing partnership with e.l.f. Cosmetics makes high-quality, affordable beauty products accessible to a wider audience. Company officials have used partnerships to transform its in-store experience, recognizing the evolving landscape of retail dominated by eCommerce giants like Amazon and Walmart.

Target officials say physical stores can be a powerful weapon in their retail arsenal, offering unique experiences that online shopping can’t match. Through strategic partnerships and data-driven insights, they’ve revamped their in-store offerings, making them more attractive and aligned with what customers want.

Hennington advocated for strategic partnerships as a cornerstone of the retailer’s strategy to improve the in-store experience. These partnerships are not just random affiliations but meticulously chosen based on research into consumer behavior and shopping preferences. This approach ensures that the company’s efforts resonate with its target demographic, enhancing customer satisfaction and loyalty.

Also, Target’s partnership with Disney exemplifies creating a destination within a store. The Disney Shop-in-Shops provide a dedicated space for merchandise, particularly appealing to families with young children, thereby boosting foot traffic and sales in Target’s physical locations.

“In physical retail, it’s more important to invest in experiential,” Hennington said. “Experiential retail is critical for relevance in the future.”

Data-driven partnerships are a change for Target. By using customer insights, company officials can anticipate what shoppers want and deliver it both in product selection and store experience. This approach not only makes physical stores more enjoyable, but also positions Target to compete against online giants. These partnerships also make Target adaptable, as it can quickly capitalize on trends like the rise of TikTok-inspired products, showcasing its responsiveness to the ever-changing market.

Target Corp. is deploying a two-pronged customer experience strategy to bolster its position in the competitive retail landscape. The strategy focuses on enhancing the appeal and convenience of its brick-and-mortar stores while simultaneously offering competitive online options. This approach aims to ensure Target remains relevant to today’s evolving consumer shopping habits.

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