How Target Creates Loyal Customers

Target sprang into action after CEO Brian Cornell revealed his vision about Target’s direction during its investor conference on March 3, 2015.

He outlined a strategy that would emphasize the following going forward:

• Embracing omnichannel retailing.
• Concentrating on the signature categories.
• Tailoring assortments to local needs and tastes and personalizing the only shopping experience for Target guests.
• Focusing on urban store formats.
• Cutting costs.

Cornell offered an explanation for his priorities in an article that appeared in MMR (Mass Market Retailers). His goal to accelerate top-line growth by driving traffic to existing stores had four parts:

1. Elevate signature categories
2. Enhance guests’ digital engagement with Target
3. Become more localized and personalized
4. Ensuring a great in-store experience

Defining the Target customer became a priority.

Things you didn't know about target

🎯 Target wouldn’t have come to life without a fire destroying a Minneapolis church in 1895: Local businessman and Target founder George Dayton bought the building, revived it, and convinced a department store to move into it (he also bought shares in the business effectively starting his empire of cheap goods).

🎯 Target was a family-owned business until 1978.

🎯 The Dayton family and its corporation joined Honeywell, Northwest Bancorporation, and General Mills to create a school for training executives and managers called the “Four Company Program.”  

🎯 The first store by the Dayton-Hudson Corporation under the name Target opened in Roseville, Minnesota in 1962 during a string of discount store openings (Kmart and Walmart opened their first stores in the same year).  

🎯 The Target Corporation invests heavily into education including their Take Charge of Education initiative in 1997.

🎯 75% of the U.S. population lives within ten miles of a Target store.

The “target” Target customer

Rick Gomez was responsible for leading marketing efforts across all merchandise categories. Recalling the Target climate when he came aboard, Gomez observed, “I think we lost sight of who we were and who we are as a brand. We had lost sight of who our guest was and how our guest had changed.”

Target’s perceived composite customer had always been a white suburban mom, who had two kids and drove a minivan.

“And that is a big part of who our guests are, but the reality is, our guest has increasingly become more millennial, Gen Z,” Gomez said. “And has become more multicultural. Urban. So, we have a much broader definition, or perspective, of who our guest is than I think we had five or six years ago.”

Target set a goal to become more “guest-centric,” or to put the store’s guests first.

The marketing department used quantitative studies, focus groups, and home visits to gain insights about consumers. Deep immersions would see Target executives spend significant amounts of time visiting consumers’ homes.

Gomez was one of them.

“We asked [consumers] about their brands and where they shopped. I’ve sat through conversations going through a makeup bag for four hours, talking about makeup and beauty. And [with women] I’ve gone through their closet, [discovered] what she thinks about her outfits and her shopping. Pantries, medicine cabinets.”

Most of the C-suite invested time in these visits, a fact Gomez called “critical” to the exercise. “And you get a whole new perspective, and you start to build empathy [for the customer],” Gomez said.

Cornell strongly believed that defining the Target customer would go a long way toward understanding the path Target needed to travel to find future success. Cornell made his share of home visits and observed that he learned a lot about Target’s customers in terms of what they liked and disliked, and how they lived.

“Here’s the way retail fits into their lives,” Cornell said. “What they’re looking for today, and what we can make sure we’re including in our offering to capture more of their footsteps, or more clicks, depending on how they’re shopping.”

For example, Target gained a keener understanding about how young mothers shopped for baby products and how important trust and brands were to them and what they were looking for.

That “allowed us to alter some of our assortment,” Cornell said. “Think about how we merchandise differently. But it really forced us to double down on the importance of moms to our brands. And if you think about the hundreds and hundreds of Target stories that are out there, so many of them are tied to young moms. Talking about the fact they bought their first car seat at Target and their first diapers and children’s clothing. And that evolved into shopping for toys. And while they were there, they discovered other household essentials and things that they liked in our assortment for their homes. And they started shopping for themselves. But our brand has been connected to moms and families for years.”

Cornell credited the home visits for reminding everyone that Target served real families and real people.