New Target stores showcase merchandising exploits - Statistical Data Included

DSN Retailing Today, March 25, 2002

NATIONWIDE DSNRT REPORT -- If it's the second Sunday in March, it must be grand opening day for Target Stores. As predictable as the changing of the seasons, the nation's third largest discount retailer comes through each spring with a new set of stores, this year unveiling 32 new units on March 10, many of which are supercenters and several former Montgomery Ward locations in California, which it acquired when that retailer liquidated in 2000.

Target typically hosts three rounds of store openings per year--March, July and October--and uses the occasion to roll out new merchandising initiatives. This year, a new advertising campaign dubbed "circles" hit the airwaves to coincide nicely with new in-store signage and increased promotional activity for Target.com.

This program serves to reinforce Target's image as hip and edgy, combining icons reminiscent of the Internet heyday with in-store signage largely in the more youth-oriented areas, such as apparel, shoes and accessories. The emphasis appears to be on the Mossimo line, while likely setting the stage for new lines from designers Todd Oldham and Stephen Sprouse, sometime designers to rock stars.

Target has increasingly tried to woo the fickle youth market and its latest positioning is no exception. A Web site for teens called Bullseye, which launched last year, already has been abandoned, but management has never shied away from experimenting. And some of the retailer's newest merchandising initiatives, such as teen bedding and dorm accessories, are prime examples.

Health and beauty care has been changed around somewhat, with more attention and space allocated to cosmetics. New fixturing gives the appearance of wider aisles and bump-outs provide cleaner presentation that is consistent throughout the department. In line with the propensity of retailers everywhere for exclusives, shelf talkers call attention to a line by L'Oreal created "exclusively for Target."

Target has successfully created designer lines from partnerships with relative unknowns, such as Michael Graves, gradually trying to extend those lines into new and often unexpected categories. Witness the Michael Graves line of watches and sunglasses that made brief appearances on store shelves, never to be seen again.

In that same spirit of experimentation, the Mossimo name now graces a line of bath and body products, including scrubs, salts, scented candies and men's grooming items. Maternity clothes now bear the Mossimo name, as well. Archer Farms, Target's proprietary grocery label, has been expanded in its supercenters with several items, such as cereal and juice, finding their way into traditional discount stores. The company's Market Pantry line of entry-level-priced grocery items continues to grow as management extends its "good, better, best" mix of products.

The company also expanded the food selection in traditional discount stores, adding refrigerated and freezer cases to now comprise a full aisle. The inclusion of frozen meals, snacks and pizzas is relatively new to Target, which has largely shied away from adding grocery items.

Waverly Garden now reaches well into several home categories, including

tabletop, and a line of housewares not dissimilar to Martha Stewart's graces store shelves.

In that same vein, Target has introduced a line from Lynette Jennings called Qbits, modular storage pieces manufactured by Sauder. Described as "a more realistic Martha Stewart" by one devotee, Jennings hosts "Lynette Jennings Design" on the Discovery Channel.

Additional home categories, a core strength of Target stores, also have been tinkered with as of this spring. New rug displays feature wood shelves and endcaps with some larger area rugs draped over rods, producing a look more in line with rug shops and home decor specialists. Levolor blinds in aluminum, vinyl and natural woven, roman and cellular shades now compliment Target's own line of entry-level vinyl products.

Target's increasing attention to detail logically expands into home improvement categories, where even toilet seats become fashion-forward and high-end showerheads offer consumers a waterfall effect in their very own homes. Hardware, typically not a strong category for Target, benefits from new merchandise sets, showcasing the Stanley Tools and Black and Decker product lines.

Target also opened three former Montgomery Ward sites in California this month, two of which were two-story units. However, in the just-converted location in Rose-mead, Calif., the company used just the first floor of the former two-story site. There are plans for a restaurant to open later on the top floor that will be owned and operated by an unrelated company.

This location does, however, offer a peak into one of Target's rare forays into ethnic marketing. With a large Hispanic population just 25 miles east of Los Angeles, the Rose-mead store features signage in both English and Spanish, and entire aisles devoted to Latina music and Spanish videos, books and DVDs.

New SuperTargets like the ones newly opened in Dallas and Tampa included E*Trade banking centers. The company took the occasion of opening its first SuperTarget in the Tampa market to treat area residents to a rather elaborate fireworks display the night before the Sunday opening. As result, more than 200 people queued up bright and early the next morning to receive a goody bag complete with a bulls-eye-shaped SuperTarget emblazoned pot holder, providing customers with a constant reminder of where to shop hanging right there in their own kitchens.