Next-gen Target: Rethinking the store and the grocery trip

November 20, 2017

Grocers will want to check out Target’s next-generation store in Richmond, Texas, for ideas on how to better align the store experience with what consumers are looking for. Many food retailers have responded to new, intense completion by remodeling, but it’s increasingly clear that an update isn’t enough. What’s needed is rethinking how to meet today’s shopper needs. Target’s effort – based on a big investment in shopper research – offers some interesting approaches.

The selling area of the store is divided to serve two distinct shopping modes, which the company defines as “Ease” and “Inspiration.” They even have separate entrances geared towards each mission.

• The “Ease” section is supermarket-like – built to make it easy to find consumable items such as grab-and-go prepared meals, wine, local grocery products, fresh products, etc.
• The “Inspiration” section is department-store-like – built to encourage shopping for apparel and other products.

The strength of this approach is that consumers can still shop the whole 124,000 SF store, but now they’ll find it a lot easier to target (no pun intended) their visit on their immediate needs via well-defined “stores within the store,” such as TrendSpot, Kitchen World, Kid’s Node, online order pick-up, etc.

The pace of a shopper’s trip is also influenced by the use curved aisles in certain areas. This idea has been used successfully by some supermarkets in health and beauty sections, but it seems to have fallen out of favor; however, it’s definitely worth another look. Research has shown that using curved fixtures are eye catching and actually relaxing and more engaging. Anything that breaks up the expected visual experience will also slow the shopper, and that’s a good thing, provided it’s done in a way that pleases the shopper.

Target’s challenge is building grocery market share. Walmart, Kroger, and HEB are all tough competitors in Texas; each now holds about a 25% share vs. Target’s 5% per data cited by from the Shelby Report in this Houston Chronicle article.

BMC POV

The new Target approach may be an example of a big retailer breaking with the traditional definition of what it means to be in the grocery business and applying a narrower definition. To be successful, this would require Target to do two things:

• Redefine its grocery offer with a focus on satisfying needs related to several specific shopping occasions – the net result being something between a supermarket and a specialty food/convenience store.
• Reduce its assortment to drive up sales per square foot and profits.

CPGs would undoubtedly be happy to invest in helping them figure this out. Consumers are looking for something different to attract them to a store, and Target’s effort gives retailers ideas on how to do this that they probably wouldn’t consider otherwise.