Greatland lags behind Columbus discounters - Target's Greatland superstores, Columbus, Ohio

Discount Store News, April 5, 1993

Target Greatland should make a major initial splash in Chicago, but its long-term prospect for success hinges on strengthening its merchandise offerings, suggests an exclusive DSN study of the superstore's entry into a

previous new market, Columbus, Ohio.

Since opening three Greatland stores in Columbus in October 1991, Target has succeeded in penetrating the market, drawing a majority of households in the metropolitan area into its stores, concludes a consumer research survey of shoppers in the Columbus market.

The research indicates however, that Target Greatland will have to strengthen its merchandise in order to surpass Kmart and Meijer, the Grand Rapids, Mich.-based superstore chain, both of which hold substantial leads in terms of consumer preference for buying various categories of products. outstanding feature is the environment in which it sells merchandise, rather than the merchandise itself, consumers said.

DSN commissioned Leo J. Shapiro & Associates, a Chicago research firm, to conduct a phone survey of 200 households in the Columbus metropolitan area and interview the chief shopper in each household. This resulted in interviews with 54 men who said they were the chief shopper of the household and 146 women. Shapiro conducted the interviews in mid-February, approximately 16 months after Target opened three Greatland stores in Columbus.

DSN chose Columbus because it should be a significant harbinger of how Target might fare in Chicago--because both markets were new to Target stores. Target opened previous Greatlands in markets in which Target was already well-entrenched with its traditional discount stores.

More than half, 57%, of Columbus households have shopped at Target Greatland. In addition, 59% of households recognize that there is a Target Greatland store within easy driving distance. Target's market penetration is just below the 66% of Big Bear Plus, a superstore that combines a traditional Hart's discount store with a Big Bear grocery store.

In market penetration, Target is well ahead of the 23% level for Wal-Mart. But Columbus shoppers have to drive about 20 miles to reach the closest Wal-Mart in Circleville, Ohio.

The Minneapolis-based discounter, though, lags behind the dominant Columbus discounters, Kmart and Meijer. The survey determined nine out of 10 Columbus consumers shopped at each of those two chains in the past year.

More important than the initial shopper penetration, consumers who tried Target Greatland are coming back in substantial numbers. Nearly six in 10, or 58%, of those who have shopped at Greatland said they definitely will be back.

Only one in 10 consumers who visited Greatland do not plan to return for more shopping, usually because the store is inconveniently located.

The balance of 30% said they "may" return, a fairly high proportion of doubtful repeat customers.

Customers who have tried Greatland averaged nine shopping trips over the past 16 months.

Target Greatland made its biggest impact on the market with its domestics and housewares offerings. In Columbus, 9.5% and 11% of households, respectively, named Target Greatland as their first or second preference for shopping these categories.

Between 4% and 6% named Target Greatland as their first or second preference for toys, children's clothing, toiletries and personal care, and sporting goods. Between 1% and 3% named Target as their first or second preference for women's and men's clothing and home electronics.

When preference for Target Greatland is compared to the choice of discount department stores for each product category, housewares, domestics and children's clothing are Target's strongest categories, each capturing an 18% to 20% share of preference among discount stores.

The weakest category is home electronics, where Target Greatland only captures 7% of the share for preference among discount department stores.

Discount store competition in Columbus centers on Kmart and Meijer, the Grand Rapids, Mich.-based supercenter operator. Kmart achieves better preference among customers for clothing, but the two chains almost tie in the other categories studied. The only exception is personal care and toiletries, where Meijer leads Kmart.

Shoppers find Target Greatland appealing mainly because they see it as a customer-friendly store. They often described Greatland as being big and spacious with wide aisles, being clean and neat, well-organized and complete in its merchandise variety. Consumers generally credit it with charging good prices, although not necessarily the lowest.

"What is interesting is what is unsaid," said George Rosenbaum, chief executive officer of Shapiro, a Chicago market research firm that works with a number of major retailers. His firm pioneered research on generic foods, disposable diaper and the concept of the consumer as a grazer, a widely used marketing tool.

"Relative few talk about the merchandise Target sells," said Rosenbaum after analyzing remarks that those surveyed were invited to make. Those questioned remained largely silent about the Greatland "brand selection, its quality, or specific departments of the store that they see as outstanding," Rosenbaum said.