Byline: Nancy Brumback
MINNEAPOLIS — They may avoid Kmart. They may stay clear of Wal-Mart. But of the big three national discounters, it’s Target where upper-end customers are more likely to end up when they’re looking for bargains or basics.
Image-conscious shoppers aren’t embarrassed to be seen at Target, and that, noted Loren Beadle, Andersen Consulting partner and head of the Chicago firm’s central region retail practice, is a key to the discounter’s success.
Target attracts not only the blue collar, price-conscious consumer who shops for the entire family, it also draws richer customers seeking basics and home goods.
Target understands the marketplace and its customers, according to Beadle. And on top of that, the store offers some better-quality items, such as 200-thread-count sheets and chenille tunics at sharp prices.
The chain also offers department store amenities such as bridal and baby-gift registries, all in bright, clean, well-lighted stores with wide aisles and little clutter along aisles. Compared with Kmart and Wal-Mart stores, Target stores are better organized.
According to Target, its customers are well-educated, with 49 percent holding college degrees and relatively affluent, with a median household income of $44,000. One-third of Target customers earn at least $50,000, and one-third of the customer base is under 35. Sixty percent of Target customers have children living at home.
According to the WWD survey, women apparel shoppers like Target for the prices and hours of operation. The store also rated high (number three) in terms of overall value and location and was ranked fifth in terms of discounts and refunds or exchanges.
Target focuses heavily on its house brands. In women’s apparel, they have an upscale ring, with names such as Sostanza, Merona and Honors. A key active label is Pro Spirit. Those names are splashed across the back of the women’s apparel departments, generally located in front of the store toward the center. Brand names such as Cherokee and Chic get some play, but the emphasis is on the Target brands.
Apparel advertising frequently features models in outfits, rather than photographs of items. There are also large color posters depicting Target outfits.
Stores recently spotlighted two versions of the Honors cotton knit twinset, including a tunic top priced at $17.99 and a cardigan at $19.99. In the Merona version, there was a short-sleeved top for $12.99 paired with a $16.99 cardigan.
On the fashion front, there’s a bouclA knit group priced at $14.99 for a tunic and $16.99 each for cardigan and pants. The more fashion-oriented Sostanza line included a long-sleeved velour dress for $22.99, chenille top at $29.99, velour jeans at $23.99 and a microfiber jacket with fur collar at $54.96.
Inventory management, strong systems and superior layouts also distinguish the chain from the competition.
Target, with about 735 stores in 38 states, continues its expansion march. This year, the company opened 70 stores and entered the New York and Washington metropolitan markets and Utah.
Target tends to move into a market with the aim of saturating it. When Target moved into Chicago in 1993, for example, it opened 11 stores on one day and another seven by the end of the year. Target now operates 28 stores in the Chicago metro area, and real estate sources indicate another five are planned. The Target entry reportedly hurt Venture and Kmart in that market, and some feel Wal-Mart has also slowed down a planned expansion in the Windy City.
Target is the largest division of Dayton Hudson Corp., accounting for a 67 percent of the Minneapolis company’s 1995 revenue, or $15.8 billion of the $23.5 billion sales total. Target is outperforming DH department stores, which are periodically rumored to be on the selling block, and the Mervyn’s division.
Target has also been supplying the talent for corporate top management. Robert Ulrich was head of Target before taking the corporate chief executive officer position, and Linda L. Ahlers, president of the department stores, also came up through Target ranks.