Target Tests Merchandising and Technology Innovations in New Stores

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Target

Forgive Target if the retailer lost a lot of its mojo due to brand drift and the big cybersecurity breach a couple of years ago. This year the company has been trying to make up for lost ground in a big way with some decisive product and merchandising moves—and is busily testing new formats and technologies to determine the right mix.

Witness what’s unfolding on a test basis at a SuperTarget near Target corporate headquarters, in Minnetonka, Minnesota: a full-on experiment in overhauling Target’s grocery offerings. Target CEO Brian Cornell several months ago gave notice to traditional food-and-beverage brands that he’s shorting them on space from now on to make more room for natural, organic and simple ingredient, less-processed fare—and Minnetonka models what he had mind.

Target

There are more local and better-for-you products in Minnetonka’s test, for example, such as fresh produce in an open market format. There are more granolas and yogurts, and a do-it-yourself grain bar as well as grass-fed meat. “Bolder, more playful signs and displays,” Target said, and “more intuitive” merchandising, reigns, such as adding a special display of coffee-makers in the coffee aisle.

“We believe it’s a step in the right direction,” reads the corporate blog, “and puts Target on more competitive footing, especially when it comes to offering new and exclusive products we know our guests want.”

Target

Meanwhile, at a Target in San Francisco, the chain has been experimenting with a space it calls Target’s Open House, where it is g.

About 50 vendors have products in the Open House, where one big focus is showing how the devices can work together in various combinations—the missing link, so to speak, that has so far prevented smart homes from becoming a bigger phenomenon.

Another innovation is that Target is encouraging disappointed Open House customers to return their merchandise. “If something came back and wasn’t working for someone that’s an amazing opportunity to conduct consumer research,” David Newman, director of enterprise growth initiatives and head of Target’s San Francisco office, told Fortune.

Target has also partnered with TechStars, world renowned as startup accelerators, to launch a retail accelerator next year in Minneapolis with a concept store. It may also foster new retailing and marketing technologies on its own real estate, from supply chain and data analytics to robotics to new ways to integrate digital and in-store experiences.

Target

It’s the sort of strategic step being taken by more and more retailers and other large companies that want to get better access to potential disruptive startups before they’re disrupted by them.

“We know that technology will continue to revolutionize retail, and that Target’s future will be built on innovation,” said Casey Carl, Target’s chief strategy and innovation officer, in a press release. “That’s why we’re so excited to partner with TechStars and invite the world’s most promising startups to work with Target right in our backyard.”

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