As of 10:20 a.m. Central Time, the S&P 500, Dow Jones and Nasdaq were down by 1.4 to 2 percent. But Target’s stock was up 1.25 percent.
It’s another sign that the “$7 Billion Bet” CEO Brian Cornell took to turnaround the retailer is paying off.
In early 2017, Target revealed plans to invest $7 billion to update its stores over the next three years, further improve its digital infrastructure, develop more of its smaller-format urban stores, improve its supply chain and, by the end of 2018, roll out more than 12 new brands, all developed in-house and available only at Target. The most unique aspect to all of this, relative to what Target’s competitors are doing, involves those new brands.
Like businesses in other industries such as cable television (think Netflix and House of Cards or Orange is the New Black), Target understands that distribution and sales channels are only as good as the product that goes through them. And to differentiate in ways that will attract more shoppers, it needs more only-at-Target, highly appealing offerings, rather than those customers can get elsewhere.
During its most recent quarter, it concluded 56 remodels, opened 7 new outlets and launched three new brands: women’s denim, apparel and accessories called Universal Thread; kids and sporting goods called Umbro; and home products named Opal House.
The company also is deploying additional resources to enhance omni-channel capacities and expand same-day delivery options to expedite the shopping process. During the first quarter it expanded drive-up service to more than 250 stores and made other advancements, including same-day delivery expanded to another 700 outlets.
Chicago is to be the first city to have all four of Target’s new delivery and pickup options: Shipt, Drive Up, Target Restock and from-store delivery.
Meanwhile, comparable digital channel sales in the first quarter surged 28% and added 1.1 percentage points to comparable sales during the quarter.
Target still has to improve its profitability. But analysts expect this will occur in upcoming quarters as sales continue to build and initial investments in things such as building a new brand subside.