How Target Climbed Out of its Sales Slump

Posted on by Patty Odell

Target is on a roll.

After slugging through its worst year since the recession, the retailer put together a series of strong years—2017, 2018 and the first several quarters of 2019.

“We have turned Target into a growth company again,” says Rick Gomez, evp and chief marketing and digital officer, Target Corp.

Rick Gomez, evp and chief marketing and digital officer, Target Corp.

“Our team has created one of the great business turnaround stories of this decade. We’ve gone from a brand that had undeniably lost its way to one of the clear leaders in retail. We’ve had nine consecutive quarters of growth across both digital and stores. Every team across Target has accepted that to win in this new retail environment we have to work differently and that includes our marketing team.”

The team took a number of bold actions and initiatives, including getting back to basics in meeting customers’ needs in a differentiated way.

“By the time we came out on the other side of the recession, the retail industry had changed again and the next boom was not going to be built solely by building new stores,” he said. “Winning retailers would have to do many, many things well and that is the origin of the strategy we adopted.”

In 2017, Target adopted a strategy that included a $7 billion investment to “lean into Target’s strengths,” he said.

More than two dozen new brands have launched, including Good&Gather, Target’s largest owned food and beverage brand. Several weeks ago, 650 products were added in stores, with another 2,000 to be introduced by the end of 2020.

One hundred small format stores have opened in urban neighborhoods and near major college campuses. Hundreds more have been remodeled and Target is on track to raise minimum starting wage to $15 next year. It was also the first retailer to offer nationwide same-day delivery and curbside service, Gomez said today at the ANA Master of Marketing Week.


Much of the love Target enjoys from customers is rooted in its marketing.

“Our brand is about more than just selling stuff. The feelings we inspire are just as important as any particular product that we sell,” he said.

That theme is carried into Target’s fall campaign, created entirely from consumer-generated content.

“We’re lucky to have guests who love our brand so much,” Gomez said. “They’re literally willing to share it with the world. That’s why we are relentlessly focused on how we can turn that love into engagement, traffic and ultimately sales.”

A sense of urgency and putting guests first led to new approaches that positively impacted the bottom line.

In 2017, Gomez scrapped the loyalty program RedPerks that had been in test mode for about a year and had launched with much fanfare.

“It wasn’t a great program,” he said. “There wasn’t much differentiated about it. It was too transactional. Frankly, it didn’t feel like Target, but there was a lot riding on it.”

After listening to guests and benchmarking against world class loyalty programs, like Harley Davidson, Target went back to the drawing board and six months ago began testing Target Circle,  a new program.

Target Circle goes far beyond the previous points-based initiative to offer personalized benefits, including a one-percent discount when shopping at Target, earned votes to choose and benefit local charities, as well as access to exclusive discounts and experiences.

“We’re in six test markets right now and we already have two million active users,” he said. “We’ve given nearly a million dollars to local charities. We’ve created a program that allows us to deepen our relationship with our guests and do so in a way that feels like Target.”

Red Circle launches nationally next week. A new video drives awareness.

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Design for All

This fall, Target is celebrating 20 years with design partners like Michael Graves, who since 1999 has launched limited-time only collections with 175 different designers, including Jason Wu and Victoria Beckham.

“The work has been so important to our brand because it’s about more than just making these products affordable,” Gomez said. “It’s about more than cheap chic. Ultimately it’s about a commitment to designing for all; The idea that great products should be accessible to all. It’s about truly making sure that we are reflecting all of our guests through things like inclusive sizes.”

A new marketing approach relaunches hundreds of items from 20 of its most iconic partnerships—all at their original price.

“That’s truly retro pricing,” he says.

A massive out-of-home presence for the relaunch includes a foot-ball field display in Vegas.

“When I think about everything Target has done over the last few years and how far that we have come, I think the most impressive thing is the degree to which our team has been willing to try new approaches to how we think, to the way we tackle work and to the content that we’ve put out into the world,” Gomez said. “Change is not always comfortable. I get it. Comfortable is familiar. It’s safe. It’s easy. But in today’s environment the best work is often the least comfortable.”


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