Elevating the In-store Experience - Target Corportation

Elevating The In-Store Experience

Tim Jessberger, Christian Klimkiewicz, Emily Kluener, Vlad Necovski, Wes Sherrer, Nathan Tumblin

Today’s Roadmap

● Competitive Landscape● Our Research● Plan Objectives● Proposed Tactics

o Overviewo Costs of Strategieso Benefits of Strategies

Competitive Offerings: Similar Product and Selection Offerings

o Compete on priceo In-Store service is

improving; usually understaffed

o Excellent in-store service

o Competitive pricingo Good quality

products

Competitive Offerings: Similar Product Offerings, Less Selection

o Reduced pricingo Typically one product

choice in each category

o Little to no service

o Reduced pricing on select products

o Some choices in certain categories

o Little to no service

Competitive Offerings: Different Focus, but Growing Offerings

o Draw customers on weekly and fill in grocery trips

o Decent service, competitive pricing

o Secondary sales in clothing and home good items

o Draw customers on weekly and fill in grocery trips

o Excellent service, fair pricing

o Some options in home good items

Our Research

● Primary Researcho Observed guest shopping habits at Lennox, Easton,

Polaris, Graceland, Blacklick, and Cincinnatio Experimented on Target team members using

situational testso Interviewed Target team members while on the job

● Secondary Researcho Acquired data on trends in the industryo Looked for innovation amongst competitors

Research “a ha”s

● Perceived slightly higher quality,

slightly higher cost than Walmarto Not the least expensive, very good cost to quality

ratioo Mom’s seemed to prefer Target

● In-store experience is higher than competitors, but there are many opportunities for improvement

The Problem Defined:

● The in-store experience is good, but continuous improvement can be leveraged to differentiate and capture a competitive advantage.

● How can Target modify the in-store experience to benefit all stakeholders and provide a competitive advantage?

Ideal Solutions

● Optimal recommendations will:o Elevate Target’s in-store

experienceo Reinforce existing in-store

effortso Be cost cognizant o Support Target’s brand

positioning/differentiation strategy

o Increase brand image

Key Pillars

● Guest Service: be 100% available to the guest when they need service

● Convenience: provide guests with increased convenience while maintaining time spent in-store

● Casual Incentives: reward existing guest behavior● Embrace Differentiating Factors: Target has higher

quality goods, friendly staff, and a better in-store atmosphere

Strategy #1: Improve In-Store Service

● Improve service with easier access to team members in given departmentso Cross-train team members

to assist guests in high volume departments

● Better trained and incentivized pharmacists more eager to assist and fulfill guest needs

● Implement better communication technology

Improving In-Store Service

● Cross-train team memberso This can be completed for a

nominal cost through on-the-job training

o Have current team members spend time each day in other departments

o Focus training on guest touch points to ensure high return on guest satisfaction

Improving In-Store Service

● Improve selection processo Spend more time interviewing prospectso Ensure prospect is interested in industry and Targeto $2,000/position filled (time and opportunity costs)

● Better incentives for pharmacistso This can be in the way of higher salaries but can be

as simple as stock options or bonuses based on customer satisfaction feedback

o Cost will vary based on option and implementation

Improving In-Store Service

● Remove phones red in-store phones (outdated)o Utilize Cartwheel or other

smartphone-based app to ping customer service when help is needed.

o Hardware: Key managers use current hardware to receive alerts and respond or delegate response

● Happier Guests->ROIo Better guest retentiono Increased guest time in-storeo Larger revenue per visito Higher perceived brand valueo More app awareness and use

per guest

Improving In-Store Service: ROI

● Happier Team->ROIo Greater team member

satisfactiono Improved team member

retentiono Increased Team Net Promoter

Score

Strategy #2: Bundling Deals

● Bundle items to capitalize on convenience

● Increase basket size without detracting time in-store

● Be clear about the value added and benefits the consumer will receive from buying items together

Bundle Deal Examples

Costs of Bundling Deals

● Bundling results in smaller marginso Larger basket size

● Strategy relies on consumers to take advantage of the deal and purchase items together

Benefits of Bundling Deals

● For Target: guests are inclined to purchase more items in order to get the discounto More potential for revenue

● For Guests: rewarded with a discount for items they may already buy togethero Like bread, peanut butter, and jellyo Positive reinforcemento “Little win”

Strategy #3: Segmented Store Atmospherics● Personalize the atmospherics of each department based on its character

and employee suggestions● Decentralize the corporate overhead just enough to enhance the customer

experience

● It’s all about authenticity

Segmented Atmospherics Tactics

● Delegate a portion of the budget to marketing efforts directed towards increasing authenticity in each department○ Market department: Increase signage, 5 senses, market

“personality”○ Softlines: personable, quality, value

● Team member selection, training, and floor execution. ○ Hire highly motivated team members ○ Develop strategic training programs that entice them to deliver

phenomenal guest service ● Focus team members on delivering excellent guest service

○ Avoiding stocking shelves during peak hours

Benefit of Elevated Atmospherics

Thank You

What questions do you have?