The liquor section in Target’s new Boston store features locally-brewed Samuel Adams beer. The “Fan Central” area stocks Red Sox and Patriot gear. And a special section highlights the products used to make the local favourite peanut butter and marshmallow sandwich called fluffernutter. The store that is near Fenway Park is part of Target’s effort to tailor merchandise to local preferences. In addition to the Boston store, Target is testing this strategy in 10 Chicago stor
es, with hopes to eventually expand chain-wide.
Localisation is not new. It is common for fast food chains to add dishes to appeal to local tastes such as McDonald’s lobster rolls in New England.
Target’s strategy is part of an effort to boost sales. The retailer, once known for its cheap but chic fashions and home decor, lost customers during the recession after focusing too much on expanding everyday grocery items like milk.
The retailer has since focused on adding trendier merchandise, and began stocking organic, gluten-free and other healthier foods.
So far, Target’s business is rebounding. It posted four straight quarters of increases It is also investing in technology to speed up online deliveriesin sales at stores that have been open for at least a year, an important retail measure.
Target’s localisation strategy is seeing successes, too. At the Chicago stores where Target sells local craft beers, bistro tables and two-burner grills for apartment living, sales are higher than in the rest of the market. And at the Boston store, “Fan Central” is a top sales performer compared with other shops that sell fan merchandise across the chain.
According to Brian Cornell, who became CEO about a year ago, the Boston store is unique because it is a great example of localised marketing and localised assortment. “It’s bringing those pieces together so it feels like a local community. Some of the marketing material where we really captured the essence of Fenway Park, a bull’s eye made up of bats and balls and then, obviously, great local assortment of merchandise that tells our guests we understand we’re in their hometown.
“That combination really is for us inspiration as we think about future stores, and future localisation.”
Cornell stressed that Target has to appeal to local customers. “While the Target brand is iconic, we want to make sure we’re relevant in those local communities. When we can really take it across the country, there’s significant upside. We have some catch up to play, but we’re committed that we do catch up.”
As to the future of big-box stores, Cornell pointed out that the store in Boston, the Fenway store, is a “great” example that big stores still play a really relevant role. “This is 160,000sqm,” he concluded. “And the guests love what we’ve done here. They love the breadth of categories and assortment. So there’s going to be an important role for full-size stores.”
Target is also investing in technology to speed up online deliveries.
The company has teamed with Instacart, the online grocery delivery service that started in 2012, to let shoppers in the Minneapolis area order fruits and other perishables, as well as household, pet and baby products, and have them delivered to their homes in as little as an hour.
The service starts on Tuesday.