Retail doldrums? Not at Target.
Target on last Wednesday released a set of first-quarter numbers that prove that any retailer faltering now has no one to blame but itself. Continuing off the strong momentum of its holiday season, Target said comparable sales rose 4.8% in the quarter ended May 4, fueled in part by a digital sales surge of 42%. That easily beats the flagging numbers posted earlier last week by Kohl’s, J.C. Penney (down 5.5%), and even that of Walmart’s strong numbers (a 3.4% increase) reported two weeks ago.
How is Target doing it? By remodeling its stores, equipping them for e-commerce and order pick-up, while improving their presentation, and offering customers merchandise they want and can’t get elsewhere, most specifically from its own store brands. The discount chain’s efforts are helping it win market share from its many competitors that have proven unable to capitalize on the best consumer spending environment in years. The gains have not only been online: store visits were up 4.3%, showing Target’s symbiosis between stores and e-commerce where both avenues feed business to each other.
塔吉特成功的一大关键因素是旗下的新品牌广受欢迎，包括女装品牌A New Day、电子配件Heyday、家居装饰Opalhouse，以及设计师合作系列——例如和Vineyard Vines合作发行的新产品。这些大热品牌成为购物者选择塔吉特而非其他连锁店的理由。几年前，儿童服装品牌Cat＆Jack只用了一年就成为了价值20亿美元的品牌。与此同时，儿童服饰界昔日的王者Penney却衰落了。
“What we’re seeing right now is the bifurcation of winners and losers,” Target CEO Brian Cornell told reporters on a media call, pointing to eight straight quarters of growth. It was only two years ago that Target gave Wall Street heartburn by announcing a $7 billion, multi-year plan to overhaul what were dated stores, ramp up its lagging e-commerce, and modernize its supply chain. But now, the sense that Target has figured out how to thrive in this new Amazon-led world—certainly compared to many other retailers—has led its shares to rise 9% after its results.
A key ingredient in its success has been the wild popularity of its new house brands, including A New Day for women’s clothing, Heyday for electronics accessories, Opalhouse for home decor, as well as designer collaborations such as its new line with Vineyard Vines. These hits have given shoppers a reason to choose Target over other chains. A couple of years ago, it only took children’s wear brand Cat & Jack a year to become a $2 billion brand. Meanwhile, Penney, once a must-visit destination for kids’ clothes, has withered.
Target’s first-quarter profit rose 11% to $795 million, or $1.53 a share, compared with $718 million, or $1.33 a share, for the same quarter a year ago. Total sales climbed 5.1% to $17.4 billion. In the second quarter, the discount chain forecast a low-to-mid-single-digit increase in comparable sales.
Cornell, nearing his fifth anniversary as CEO, said Target’s success has come from focusing on what it does best, rather than mimicking rivals. Indeed, in the last two years, as Walmart staged its own comeback, Target came in for some criticism for being behind on e-commerce and not having enough distinctive grocery offerings.
“We’re not trying to be like everyone else,” he told Wall Street analysts. “At Target, we perform best when we’re pursuing our own path, not when we’re chasing someone else.”