Brian Cornell, Target Corp.’s new chief executive officer, on Wednesday held a town hall event at the retailer’s Minneapolis headquarters, his first meeting with company employees. Showing that he’s a leader for the future, Cornell and Target used Twitter as the platform of choice to communicate his message.
“All of us need to be students of the consumer,” Cornell was quoted as saying on Target’s Twitter account. “We need to be quick, we need to be decisive, we need to be agile.” He went on, “We need to move forward with speed. To me, leadership is about surrounding yourself with a great team.”
Touching on a popular theme in retailing, Cornell said, “The days of mass communication and mass marketing are behind us. Today is about personalization.”
Cornell shared that his son was the first person who encouraged him to apply for the role of Target ceo. “Why Target? I believe Target is an extraordinary brand,” he said. “I believe the Target brand is best positioned to win in the omnichannel environment.
“Where would I like to see us over the year? I’d love to see a headline: Target is building momentum,” Cornell said. “In the next couple of months, it’s about listening & learning through the eyes of our team.”
Cornell said “style innovation is critically important and the core DNA of this company.”
In terms of merchandise, “The guest’s vote is the most important in the room. It’s important to win the right way, with high ethical standards and in a way that fosters inclusion.”
Cornell didn’t deny that Target has a long road ahead. “We have work to do,” he said. “I’m going to ask questions and will be searching for opportunities to drive growth.
“With the passion and energy in this room, the best for Target is yet to come,” Cornell said.
Yet other news from Target on Wednesday was a reminder of how troubled the retailer is.
Target Canada, based in Mississauga, Ontario, unveiled initiatives to improve the customer experience at stores, whose performance has been disappointing and a drag on earnings. After opening 130 stores in the last 18 months, the Canadian division led to an operating loss of almost $1 billion.
The initiatives come on the heels of leadership changes in the spring when Target fired its Canadian president Tony Fisher and immediately named Mark Schindele president.
The retailer conducted a comprehensive review of its Canadian operations. Target’s aggressive rollout of Canadian stores led to problems such as empty shelves and some prices that were higher than at rival Wal-Mart Canada. Shoppers said prices at Target Canada were noticeably higher than at Target in the U.S. “We’ve been listening to our guests and taking a hard look at where we need to improve,” said Schindele. “We’ve uncovered the root cause of some of our challenges and are focused on three main areas: improving in-stocks, sharpening our pricing strategy and enhancing our merchandise assortment.”
Among the long-term merchandise strategies Target unveiled is a partnership with celebrity designer Sarah Richardson, set to launch next year. It is expanding its maternity assortment by 50 percent in September and launching Nick & Nora, a popular U.S. women’s fashion line, at Target Canada stores next year. The previously revealed Altuzarra for Target designer collaboration will bow on Sept. 14. Early next year, Target plans to introduce a new plus-size label. There’s an expanded cosmetics lineup and an exclusive brand of appliances in the home area called French Bull.
In response to guest feedback, Target Canada said it’s instituting a new price-match policy that includes matching the price of any local competitor’s flyer or weekly ad in print or online, and price matching for select online retailers, including Amazon.ca, walmart.ca, bestbuy.ca, toysrus.ca, babiesrus.ca, canadiantire.ca, futureshop.ca and sears.ca. Guests can now use apps, such as Reebee and Flipp, to price match at the register, instead of bringing a printed flyer to the store.
Supply-chain issues and in-stocks, which have dogged Target Canada, will be addressed. The retailer will undertake a physical count of inventory at all stores, which will result in a reset of systems and more accurate ordering and shipping data. The retailer will use sales history for better forecasting and allocation of product and promotional plans to make sure the right amount of product is in the right place at the right time. In addition, delivery schedules will be adjusted so stores receive merchandise more frequently. There will be new training and processes for headquarters personnel and in-store teams.
Target in early August lowered its outlook for the second quarter in part due to softer-than-expected sales in Canada. The company said it expects second-quarter adjusted earnings per share of about 78 cents, compared with earlier guidance of 85 cents to $1 a share.
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