There's a reason there are memes about Target shoppers heading into their local Target for one or two essentials and heading out with a lengthy receipt and a cart full of home goods, outdoor gear, bulk snacks and more.
Minneapolis-based Target knows that whatever prompts their shopping trips, customers are likely to head out—or check out, online—with more than they went in for. Leaning into that idea by upgrading store interiors, updating the company's roster of private-label brands (10 of which racked up at least $1 billion in sales in 2020), and highlighting new partnerships with national retail names (notably, Ulta) and emerging brands alike is central to Target's strategy, and it's a big reason why the company gained market share across merchandise categories in a pandemic-defined 2020, Target executives said in a discussion at the JPMorgan Virtual Retail Round-Up.
Target added almost $9 billion in market share in 2020, company Chairman and CEO Brian Cornell said during the event. That gain was aided especially by strong performances from electronics and home goods, as consumers flocked to items to make working, learning and cooking at home more doable. But no category was a slouch, Cornell and Target EVP and CFO Michael Fiddelke indicated, as the company saw gains in all five of its major merchandising categories, including "consistently ... taking share in food and beverage," Cornell said, according to a Sentieo transcript.
"Usually, when we dive into share, there's a nail sticking out of the board—'Here's where we're overperforming, and we could extract some lessons,' or 'Here's a place where we've got some work to do,' " Fiddelke commented. But for 2020, "the consistency of share performance across categories, across geographies and across time frames [was] just remarkable," reflecting an established and deepening trust with customers, he said.
"The fact that we're seeing consistent share gains across our entire merchandising portfolio tells us that Target is becoming more and more of a destination for a consumer who is consolidating the number of places they shop, and we think that's going to continue," Cornell said. "Our combination of upgrading physical experience and the ease and convenience of our digital fulfillment options I think is giving us an opportunity to win share and win trips and clicks with consumers no matter what they're looking for."
On tap for Target in 2021: opening approximately 100 Ulta Beauty at Target stores-within-a-store, opening 30 to 40 new stores and an acceleration of its store-remodel program, with 150 remodels expected to be complete by the holiday season. New stores and remodeled locations alike will feature more contactless features, updates to facilitate online-order fulfillment and wider spaces to allow for social distancing, Target noted in a news release in March.
Stores currently in the works range in size from about 12,000 to 122,000 square feet, with smaller locations in urban centers and college towns in the mix along with large-footprint suburban locations. On college campuses, including those at the University of Georgia and the University of Michigan, "Target will open new small-format stores to introduce its unique shopping experience to new, college-aged guests to form lifelong relationships," the March news release stated.
That emphasis on relationship-building and creating a shopping experience that consumers genuinely desire and enjoy positions Target well as the U.S. emerges from the COVID-19 pandemic, Target leaders suggested. "I think as Americans are getting vaccinated, those that have been shopping with us through order pickup or drive up or Shipt are now celebrating that occasion by physically coming back in our stores," Cornell said. "They're looking forward to continuing to go out, and Target is one of the first places I think they're visiting."
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