By  on September 28, 2005

NEW YORK — Outlining Target Corp.'s technology and online strategy, the retailer's vice chairman, Gerald Storch, painted a picture of a pragmatic company focused on offering customers an enjoyable experience that blends low price with luxury.

The retailer is poised to do $50 billion in business this year, with a total of 1,395 stores, up from 977 stores last year, he said at Forrester Research Inc.'s Consumer Forum here Tuesday.

Online, Target recently moved up to the number-three retail position behind eBay and Amazon, beating out Wal-Mart, and is number 20 among all Web sites, including Google, according to Nielsen/NetRatings, Storch said.

"We're proud of that because they're quite larger than us in the physical world," he said, referring to Wal-Mart. "We've been locked in a battle the last two years — it's important to us — for third place."

Target's Web site drives sales growth and helps the company build a stronger relationship with its customers, Storch said. Target uses its online store to test new products, such as sofas and colorful plastic rain boots, and carries a deeper and more expensive selection of goods than the physical stores, such as pricier consumer electronics and college regalia in 125 colors. By Christmas, the retailer will have 200,000 stockkeeping units online, up from 10,000 sku's in February of last year, and compared with 70,000 sku's in physical stores.

Thanks to technology, the retailer now knows much more about its online and real-world customers than it used to, Storch said. "The database we built is one of the largest in the world. We are tracking online and store visits," he said.

The retailer is looking into new ways of marketing that are individual, targeted and consensual. For example, Target has created direct mail that's printed by the customer. Target believes online is a marketing vehicle with unlimited creative potential, Storch said. Storch called attention to several retail technologies that Target has decided not to use, at least for now.

  • RFID: "We don't know whether this is the emperor's new clothes or vaporware, but it's not here today. We have pilots like everyone else, and when it's done, it will be huge, but it's more on a five-year time frame. I'm not trashing technology, it's just not ready yet," said Storch.
  • Self-checkout: "We've tested and tested this. Our cashiers are faster. We're not going to have that. It's bad technology in our opinion. [You can install it, but] then you have to have four employees to help you check out and let you know the thing's not working because you're weighing your elbow," he said.

  • Handheld shopping assistants: These require RFID and wireless, both of which aren't yet ready, said Storch.

  • Electronic shelf labels: These let a retailer change prices on the fly and are "cool," but not yet ready, Storch said.

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