Target's new CEO Michael Fiddelke shared his top three priorities for achieving growth and reinforcing what he believes makes Target special.
- Reestablish the company's distinct “merchandising authority,” focusing on unique, trendy, and exciting products.
- Improve the in-store experience, such as ensuring that key items are never out of stock and offering friendly customer service.
- Employ technology to improve speed, guest experience, and efficiency, such as redesigning its merchandising and inventory processes with the help of AI.
Just curious, but are executives terrified to talk about “DEI” or any of the other giant elephants in the room that are impacting sales and customer loyalty? It doesn't seem prudent to simply act like they don't exist and strictly focus on merchandise and AI instead.
In regards to its focus on trendy products…
Trading card sales at Target are up nearly 70% YTD and are on track to deliver $1B in sales this year, primarily due to the popularity of card games like Pokémon, Magic the Gathering, and One Piece. Target executives said the trend, paired with the Nintendo Switch 2 launch, lifted its newly coined “Fun 101” hardlines category, even as overall sales slumped. The company hopes it can continue to capitalize on trends and remain a shopping destination for culturally relevant products.
Is that the GameStop strategy? Earlier this year GameStop announced that it'll also be focusing on trading cards and other collectibles since online video game sales have effectively killed its videogame revenue.
I can't imagine this is a strong long-term path for either company. Imagine building your business on the sale of Beanie Babies back in the day?
Is Target headed down the right path?
In June, I criticized Target for copying other retailers and cited multiple examples of when that strategy has failed them in the past. I wrote at the time:
“Target needs to sit down, have a nice long look in the mirror, and ask, ‘Who am I?' And then build an offering for the next twenty years that reflects that answer.”
While I concur with the new CEO's three focus areas above, they seem more like the bare minimums of running a successful national retail chain than strategic differentiators.
It still feels like Target is directionless and doesn't yet have a solid answer to the question, “Why shop here instead of Walmart or Amazon?”
Focusing on keeping shelves stocked isn't a great answer.
