BOOM: Multi-location Target from 1902 to the Future

We have no shortage of companies that go BUST. Just in the past few days, we covered the demise of Bed Bath & Beyond and Jenny Craig. The failure of multi-location brands cannot be attributed just to digital options, consumer trend shifts, and bad hires or financial bets. More complex factors seem to go into why certain companies survive and thrive. The number of retailers that have been around for 100+ years is certainly not exhaustive. But certain brands stand out. One of those is Target.

Whether you count Target’s birth as 1962 (when the brand itself first launched) or go all the way back to 1902, when the concept emerged,

In our BOOM & BUST column, we’ll cover both the long-time successes and the (very public) failures. We tend to hear more about the latter in most media, but businesses have much to learn from those brands that have survived and thrived for at least three decades.

Target’s Early Days

George Draper Dayton, a banker and real estate investor, developed the Dayton Dry Goods Company concept at 24. He ran the company until 1938. The brand was founded on the commitment to good quality and varied merchandise, fair business practices, and a spirit of giving, which are still relevant today. However, service, convenience, and omnichannel shopping options have become more critical.

The re-brand to Target occurred in the 1960s, and store expansion (to Denver) happened soon thereafter.

Lesson #1: Choose your expansion markets carefully. Target deliberately selected Colorado, a geography whose consumers and product needs were similar to those in their original Minnesota stores. 

Expansion

During the 1980s, some interesting corporate developments occurred. The Dayton family, who managed the brand, stepped aside, and technology became a key part of the business operations. They were among the companies to adopt an intranet, e-mail, and an in-store video network.

During that era, vast expansion occurred, with the company buying many other stores and brands. By 2006, the company had close to 1,500 retail locations and revenues of $17B.

Of course, during that era, the brand made some bad bets, but their variety of products and early adoption of e-commerce contributed to its success. They were the first store chain to adopt UPC scanning, which streamlined their operations.

Lesson #2: Don’t fear technology and smart diversification

Target has long been known for aggressive and creative marketing, building strong brand awareness and loyalty among its shoppers.

Lesson #3: Choose your marketing agency wisely and build consistent and powerful campaigns.

Weathering Storms & Tracking Trends

We heard the word “pivot” way too often over the past few years, but Target seemed to be the master of that action. Adding groceries to its product line, partnering with Disney, and creating new store formats were among its innovations.

When consumers went on lockdown during the pandemic, Target quickly expanded curbside pick-up, paid attention to its online shopping capabilities, and stayed true to its reliable brand reputation.

In 2020, their year-over-year sales soared by 25%, online sales tripled, and 10 million new customers were added to their shopper base.

Lessons #4: Respond rapidly to challenges beyond your control. 

“Expect more, pay less” was established as the brand’s mantra in 1994, and although marketing campaigns may have varied since then, the concept behind the brand has stayed the course.

Lesson #5: Build a brand that appeals to a wide range of consumers, and be consistent and targeted in your communications.

Heading into the Future

Steady financial growth over 100 years is impossible, and Target has faced some huge challenges recently. Their net profit plunged 90 percent, as they had to dump a staggering $15B in excess inventory.

Is that a situational glitch or a trend and a signal of decline? Only time will tell.

The company has remodeled and reconfigured stores, piloted the SWAS concept, and continuously invested in online shopping capabilities. Target also insourced its technology innovation and hired a CIO who has helped spearhead the adoption of AI into inventory management and target marketing.

Lesson #6: Invest in technology and engage the right people to lead the way.

Has Target had some major missteps over the past century? Of course! You can’t survive that long without some major blunders.

But the mere fact that the brand still has close to 2,000 locations nationwide and $109B in revenue means they remain a leader among multi-location stores.

Target plans to develop its mini-mall concept, focus on value-priced products, invest in targeted marketing, and streamline its operations and distribution.

Let’s stay tuned for the next century and hope the brand remains on target!

The Final Lesson: Newer companies can look to long-tenured brands for success secrets. As in many categories, the “classics” can sometimes hold or even grow their value!

*Image Source: iStock.com/SundryPhotography