Target Corporation

The world-famous brand that constantly hits the bull’s-eye.

If you watch television or are a student of print advertising you know Target’s bullseye—96% of the population recognize the company’s logo, and 100 million people read the weekend circular ads. Founded in 1902, Target is an exceptional example of how a world-class enterprise can consistently and aggressively remake its image in order to remain attractive to customers. Over an impressive 103-year history, beginning with the opening of George Dayton’s first retail store, Target has contiuously updated its image, through logo design, product offerings, store design and marketing.

Not so long ago, the company was a declining bargain retailer that emphasized cheap over “cool.” Today, Target is the sixth largest retailer in the US and is approaching top-20 staus on the Fortune 500. The upscale discounter sells more gift cards than any other retailer and is the third-largest seller of music in the United States. 2005 revenues were close to $50 billion, and the company employs more than 300,000 team members and leaders in 1,400 stores in 47 states. By the end of 2005, Minneapolis-based Target Corporation (NYSE: TGT) had shed its last vestiges of traditional retailing—the venerable Marshall Field’s chain (bought by St. Louis-based, May Department Stores) and Mervyn’s (bought by a group of investment firms)—and was prepared to slug it out in the turbulent world of big-box retailing.

From a market perspective, Target has worked masterfully at differentiating its focus and approaching and attracting younger “guests” to its stores and boasts a low median age of 46 years old (the youngest compared to its competitors). The median household income of Target’s customer base is roughly $55,000, about 80% of customers are female, and about 38% have children at home. About 80% have attended college, and 43% have completed college.

In order to attract these highly desirable demographics, Target has positioned itslef as an alternative, more “upscale” type of discount shopping experience. One way that the retailer has reinforced its upscale image is through the store’s interiors. Target designs its stores to have a more sophisticated feel by having wider aisles, drop ceilings, lots of lighting and a more attractive presentation of merchandise. Likewise, the company’s digital store offers a classier environment than other discount retailers. True to a mantra of constant innovation, a unique technology alliance with Amazon powers target.direct, the electronic retailing and direct marketing division, and guest services for target.com.

Likewise, the company has incorporated exclusive, upscale merchandise to differentiate itself. Target has many exclusive deals with various hip, up-and-coming designers, including Isaac Mizrahi, Michael Graves, Amy Coe, Sonia Kashuk, Mossimo and Liz Lange. Target also partners with electronics brands, such as Sony, to create exclusive collections, including Sony LIV, which features a CD player shaped like a purse and a another equipped to be mounted under the kitchen counter. Since, other big-box retailers have followed Target’s lead by signing exclusive designers and products to their stores as well.

Target has further reinforced its image as an alternative experience through its charitable works. Target Corporation is consistently ranked as one of the most philanthropic companies in the country. According to Forbes, Target gives the highest cash giving company in America in terms of percentage of income (2.1%). It gives a percentage of charges from its Target Visa to schools, and Start Something, Target’s partnership with the Tiger Woods Foundation, helps kids build character as they identify and achieve their dreams.

The company gives over $2 million a week in the communities it operates in, an operation that is truly store-based. A structured community giving program reinforces the local impact driven by the 1400 store managers. In addition to supporting the local community, the company emphasizes its fair treatment of employees. Target Corporation was named one of the “100 Best Companies for Working Mothers” in 2004 by Working Mothers magazine. Such charitable donations and workplace environments are increasingly important in wooing discerning, younger customer.

Target provides an excellent example of how business organizations must evolve with the times in order to capture market share. By focussing every aspect of the business on creating an appealing image, the company has become an outstanding success story.