Smaller format stores are where it’s at – Target
Small is beautiful. That was the word from value retail giant Target Thursday as it sees its new smaller format store very much the way forward. The latest, which opens Friday in Herald Square, Manhattan, is about a third the size of its average store, offering same-day delivery and a selection of products more tailored to the local market.
It’s one of 12 mostly-small-format stores opening this week in urban markets such as Chicago, Los Angeles and Philadelphia, bringing the total number to 55 so far, having opened the first store of its kind in Manhattan a year ago. What’s more, it plans to open 130 more by 2019.
No wonder. CEO Brian Cornell said sales per square foot at small-format stores in urban markets and college towns are twice that of regular stores.
The company started testing same-day delivery at the initial store in Manhattan this past summer, letting shoppers have purchases made in the store delivered to their home for a fee. And how did that work? Cornell said shoppers are spending six times more than the average shopping basket at that store when they use the same-day service.
It plans to start same-day delivery service at two other stores in Brooklyn on Friday.
Target is spending billions to remodel old stores, open small units in cities and college towns, and offer faster e-delivery. It’s also adding more clothing and furniture brands, and said that its children’s line Cat & Jack brought in $2bn in sales since its launch a year ago.
Target’s latest two-level Herald Square store offers 16 self-serve checkouts because it anticipates high commuter traffic. It has a small grocery area near one entrance for speedy meal/snack purchases, and a larger grocery area is on the lower level.
It’s also the first to sell Target-branded merchandise like T-shirts and mugs emblazoned with the Bullseye mascot. And Target is using the location to refine its strategy of offering a speciality-store feeling.