Target is spending $5 BILLION to make three BIG changes to prevent store closures
- Target is investing in stores across the country to improve retail experiences
- The Minneapolis-based retailer has been plagued by theft and scandal.
Target is in the process of spending $5 billion at its stores across the country as part of a strategy to keep them open and profitable.
The Minneapolis company said it would use the money expand, improve guest services and invest in digital facilities.
His investment is a response to the problems facing retail spaces across the country, which have battled shoplifting and the rise of online shopping, among other things.
The changes, the company says, will improve the customer experience and emphasize its focus away from groceries and toward clothing, electronics and household items.
Target is in the process of spending $5 billion at its stores across the country as part of a strategy to keep them open and profitable.
Part of the new momentum will see the company “launch or expand more than 10 own brands, bringing thousands of new and differentiated products to guests at incredible prices,” it announced earlier this year.
In May, the company posted higher-than-expected earnings and said strong sales in food, beauty and home products are offsetting declining demand for groceries.
That month, Target’s director of Food and Beverage, Rick Gomez, said in an interview with CNBC that groceries were just one part of the business strategy in that they help get people into stores.
“It’s actually a gateway to the rest of the store,” Gomez told the outlet.
‘Drive traffic to the store. Drive traffic to our site. And then, while they buy what they need in the way of food and drinks, they’ll browse the rest of the store.’
The three big changes Target is spending billions on are…
Security
During his May earnings call, Target Chairman and CEO Brian Cornell said the theft was costing Target hundreds of millions of dollars a year.
He estimates he could lose $500 million this year to shoplifting due to “reducing inventory.”
“Looking forward, we now expect shrinkage to reduce this year’s profitability by more than $500 million compared to last year,” Cornell said.
“While there are many potential sources of inventory reduction, theft and organized retail crime are increasingly important drivers of the problem.”
In response, it said it would make “significant investments in strategies to prevent this from happening in our stores and to protect our guests and our team.”
Store reforms
Target is also looking to revamp its stores and open modern stores that draw customers into its retail spaces.
“Many of the new stores will include new design elements that reflect the local community, experiences that highlight new brands, variety and services, and sustainable features,” he said.
“Target is also investing in about 175 of its existing stores, ranging from complete remodels to the addition of Ulta Beauty at Target or Apple at Target store-in-store experiences.”
‘Drive up’ is back
Target also hopes to introduce a service that allows customers to return unwanted items from their cars.
That will allow “guests to return most new, unopened items within 90 days of purchase from the comfort of their car.”
‘Drive Up Returns’ will be available on purchases made through guests’ Target.com accounts. Before heading to your Target store, guests can initiate a return through a guided experience in the Target app,” the Target statement read.
“Guests then follow the normal Drive Up process to return their order and wait in their car for a team member to pick it up and complete their return.”
