Target has set its sights on a new consumer: Millennials.
Faced with declining sales as more and more consumers opt to forgo heading out to big box stores and doing the majority of their shopping online, Target is the latest to reinvent themselves to attract Millennials, but Target has a slightly different strategy than say Wal-Mart, who opened smaller express stores in suburban areas. Their plan saw less than pleasing results and Wal-Mart was forced to close more than 100 of its smaller Express stores and focus on their SuperCenters.
Instead Target’s goal is to infiltrate densely populated urban areas and customize each store to cater to the local tastes and trends. For example, near the University of Minnesota campus, Target opened a store less than 15% the size of an average store. The smaller store carries items geared towards college students who will purchase miniature ironing boards and twin-size sheets on the shelves.
New York City’s Tribeca neighborhood will also be home to a smaller, customized Target, which will take over space once leased out to a Fairway Market grocery store that never opened. It will sell a larger selection of baby items to target the families living in the area. The store will also have a Chobani Cafe and feature a mural by a local artist. Three other small Targets opened in the downtowns of Philadelphia and Cupertino, Calif., and in the vicinity of Penn State University.
“We could see hundreds of these,” said Chief Executive Brian Cornell. “It could be a huge part of future growth outlook over time.”
Millennials, or Generation Y, represent an estimated $2.45 trillion in spending power and have overtaken Baby Boomers as the largest, most influential group in terms of consuming and employment. That makes them very attractive to companies with a fledging bottom line.
Target desperately wants Millennials to visit their new, smaller stores and have come up with several ways to lure them into their doors. Customers can also use the new stores as pickup locations for online orders, “as opposed to getting that ugly sticker from UPS or FedEx that says ‘oops I missed you,’ ” said Mr. Cornell.
If you head into a Target near a college campus you may notice that there’s no toy section, and the ping-pong balls are located right next to the beer.