The Target Turnaround
Over the past year, Target Corporation (NYSE: TGT) shares fell 1.62 percent, as the firm struggled to reinvent itself in an evolving retail environment. With more people turning to online retailers like Amazon.com, Inc. (NASDAQ: AMZN) and a large-scale data breach giving customers reason to worry about the store's security, Target has faced a difficult transition over the past twelve months. However, despite the company's setbacks, many believe that the groundwork that Target laid in 2015 has set the retailer up for a stellar 2016.
One way Target has been able to draw customers back to its stores has been through partnerships with exclusive brands. Competing with other discount stores like Wal-Mart Stores, Inc. (NYSE: WMT) on price alone has proven challenging, but Target has set itself apart by offering flash sales and limited edition items with some big name designers that have given the firm a leg up. Last year, Target collaborated with Lilly Pulitzer for a special sale, which brought in thousands of shoppers at locations around the United States and generated so much online traffic that the store's website crashed. This year, the firm is partnering with SoulCycle, the latest fitness craze, in order to sell limited edition merchandise for a discount. The expensive fitness classes will be offered for free at Target locations around the country, and the brand will also offer discounted merchandise bearing the Target bullseye as well.
Target also has its eye on expansion into urban markets, according to Forbes. The retailer is planning to open smaller format stores in big cities around the United States in an effort to reach out to a new, and likely more affluent, demographic. While Target has been able to balance its appeal as a discount store with an image of good, quality products, many question whether the expansion plans are wise. Rival Wal-Mart made similar efforts last year, but recently announced plans to scrap its Express locations.
Another way Target is positioned for success in the future is the company's efforts to revamp its mobile offerings. The company has made an effort to make online shopping easier by increasing the number of shipping options and providing a better user experience. The firm has also upped its mobile game by making changes to its smartphone apps in order to give them more functionality and provide both in-store and out-of-store experiences for customers.
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