Yahoo News 
Target opens new small-format stores (TGT)
BI Intelligence
This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.
Last week, Target opened 11 small-format stores across the US as part of its ongoing readjustment to its brick-and-mortar strategy.
The format aims to create a streamlined shopping experience with square footages that range from 12,000 to 80,000, significantly smaller than the 145,000-square-foot average for a standard Target store. The new stores seem meant to serve densely populated urban and suburban areas, where consumers are likely far from a full-sized Target.
Target’s small-format stores feature inventory and an atmosphere curated for each location. Employing tools like data and focus groups, Target is trying to tailor each store’s product assortment to the needs and interests of local consumers. For example, the new location in Herald Square in New York City features trinkets for tourists who frequent the area (see image below), as well as a significant beauty section, which is likely there because of its proximity to the flagship Macy’s store and a large Sephora location. Each store also solicits customer feedback to make sure it stocks the right kinds of products, which can include grab-and-go food, fresh produce, apparel, and more. Additionally, the stores boast artwork and architecture that make them feel natural to the neighborhood — for instance, the new Brooklyn location resembles the movie theater that previously stood there.
The company is also expanding its valuable same-day delivery program to some of these new stores. The Herald Square and Brooklyn locations offer same-day delivery, previously tested at the small-format location in Tribeca, which allows in-store consumers to select their products and pay a fee to have them delivered in a two-hour delivery window. With ever-increasing expectations of speedy delivery, the service is likely to see high uptake among busy consumers, and that could be a real boon for Target — at the Tribeca location, purchases with same-day delivery boast average basket sizes six times larger than a standard transaction, a company official told BI Intelligence. While it is not clear if Target plans to expand the program to more small-format stores, the new locations offer the retailer an opportunity to improve the program and make it as efficient as possible.
The retailer plans to open more than 75 small-format stores by 2019. The retailer’s response to the ascent of Amazon and falling retail sales has been to invest in itself. Target is banking on small-format and remodeled full-sized stores to reinvigorate its brick-and-mortar sales with curated inventory and more convenient locations, while also pushing a number of digital initiatives to improve its e-commerce performance.
To receive stories like this one directly to your inbox every morning, sign up for the E-Commerce Briefing newsletter. Click here to learn more about how you can gain risk-free access today.
See Also:
