Millennials aren't smitten with Target, and the company knows it.
Last fall, Target learned that to Millennials, the company is nothing more than a big-box store. Buy from Target online? Who does that?
Not Millennials, apparently. "Target has traditionally been a store where people want to go in and feel and touch the products," says Jim Porçarelli, chief strategy officer at Active International, a corporate trading company. "It's been a destination."
But the Internet changed the way consumers shop. And Millennials have replaced suburban moms as the country's most powerful marketing influence.
That's why Target is trying to win the hearts — and clicks — of Gen Y with a heavy hand on mobile and new digital initiatives, including an overhaul of the company's wedding and baby registry business, integrated shopping lists with live store maps, and tests of same-day delivery for some online orders.
And in a first-ever ad campaign for Target's digital services launching this weekend, the brand will heavily market these new features as a convenience proposition to young couples and families. No time to shop after having your first child? Order everything online and pick it up the same day. Other new programs:
• A new app feature in beta testing in 41 stores allows users to build shopping lists that tell them exactly where in a store to find each item.
• Roughly 140 stores will start doubling as warehouses for online orders as Target launches a ship-from-store capability that will help deliver online orders more quickly.
• Online shoppers will start to see more personalized product recommendations and offers with the roll-out of a personalization "engine" that Target has been building for the past nine months.
• Target will replace all in-store registry kiosks, primarily used for weddings and baby showers, with iPads connected to Target.com. Old-school scanning guns will be replaced with iPod touches.
Target knows it's behind when it comes to its online shopping experience. Until 2011, the retailer didn't even run Target.com itself — Amazon did. When it switched to its own platform, "it was very much a static experience," says Casey Carl, Target's president of omni-channel strategy and experiences. "It required too many clicks to get where you wanted to go," and product-specific content was lacking.
But while Target may be late to the game when it comes to a seamless desktop experience and implementing such strategies as ship-from-store, it's been ahead in mobile. Nearly two-thirds of its online traffic comes through a mobile device.
"Mobile is becoming a front door with Target," Carl says. "That's really where we're going."
Still, retailers including Macy's, Nordstrom, Wal-Mart, Amazon and eBay have all offered combinations of these omni-channel services for a while. Will Target, once a leader in cool retail, suffer from being so far behind?
Porçarelli contends it ultimately won't matter as long as Target makes it worth consumers' time to shop there. "They can make up that distance by making up a valuable experience," he says.
Matt McClintock, senior apparel and retail analyst with Barclays, notes that two of Target's historically strong categories, apparel and home, have been eroded in recent years by competition from the likes of T.J. Maxx and accessibility to more options online.
"They have to create more reasons for people to want to shop their store, and the best way to do that is change merchandise over and constantly throw newness at the consumer," he says. That's something that will be easier once a redo of Target.com is complete by the end of the year. The website will customize each product section — apparel will have more and better photos, while appliances will be heavy on metrics and reviews — and behind the scenes, Target will be able to update and change the website more quickly.
Given Target's existing customer base of loyal fans, even after one of the largest data breaches in retail history last year, Porçarelli says the brand has a strong history to build off of in convincing shoppers that it's still a destination, across all platforms.
"My bet is that Target is going to do just fine," he says. "They have to identify what it is that their consumer really wants and then they have to do it really well."