Every piece of our strategy is working and it's working together.
There’s a strong note of triumphalism on show as Cornell pushes back against those, including on his own team, who criticised his strategy of making the physical store the hub of the business model in an Amazon age:
I think, we can all agree at that time, the plan was not met with universal applause. I won't name names, but a few [people] might have pulled me aside and said, ‘Brian, are you sure this is the path you want to pursue? Do you really want to bet the company on stores?’.
At that time, people were closing stores, not opening them. They were cutting costs, not investing in their teams. But we've never been a brand that falls in line with the crowd. Our guests aren't looking for a Red and Khaki version of someone else. They expect us to be different. They expect us to innovate, and inspire. They expect us to be Target. So with our guest as our guide, we kept our stores and our people at the center of our strategy, but committed to deploy them in a radically different way. Two years later, we've redefined what it means to be welcoming, inspiring and rewarding and retail.
With the retailer having turned in a strong set of numbers in its most recent quarter, Cornell does appear to have reason to pat himself on the back:
As a shakeout in our industry continues, the separation between those who can afford to invest, and those who can't is real. The channel convergence between physical and digital has come full circle…We got there, because we spent 2016 showing up the fundamentals. 2017 was about laying out an investment agenda, and developing new capabilities. 2018 was all about acceleration, and innovation, so that in 2019 we can drive adoption, and scale.
On the digital side, there’s also what he calls “a stand out story” with 31% year-on-year growth in online sales. It’s been a fast ride, says Cornell;
It wasn't long ago that digital was a rounding here, when it came to overall revenue at Target. In 2012, our digital sales were just over $1 billion. Today, digital is delivering more than $5 billion in sales and still growing. And digital growth at Target isn't coming at the expense of our stores. It's making stores more relevant because of the convergence between physical and digital. It’s closer than ever at Target, and that's because we invested to build industry leading digital and technology teams. They’ve created a seamless and inspired user experience that's worthy of our Target brand.
All of which leads to a bold claim from Cornell:
Today, Target is hands down America's easiest place to shop.
He backs up his claim with an anecdote about predicting back in 2016 how retail would change:
I talked about how someday, not long in the future, a mom, who works here in New York City, would be able to plan a birthday party, right from her office, shop for everything from her phone, from the train, and then pickup her order before shuttling her kids off to swimming lessons. The punch line was that in the future, the whole thing would go off without a hitch.
In 2019, that’s a reality, not an aspiration, he declares:
Today, that same mom in the city has a multitude of choices, and the shopping experience has never been easier or more convenient. For starters, she could just make that Target run on her lunch hour. Three years ago, we didn't have one single store in Manhattan south of the park. Today, we have four.
If she doesn't want to schlep the bags back to her office, we'll keep them and drop them off at her desk before she leaves for the day. We’ll drive up, she can keep the kids buckled up in their car seats. We'll put that order in her trunk at the closest store to her home.
With Schipt (the fulfilment service acquired by Target] she can order same day, and will have everything she wants on her kitchen table within an hour or two. Her shopper will even text her before checkout, see if she wants or needs a few extra candles for the cake. Whatever she wants, today we've got her covered.
Despite the heavy thread of self-congratulation, Cornell insists there’s no room for complacency now:
We've invested in infrastructure to support greater scale and speed and strengthen our core and we've invested in building enterprise data and analytical capabilities, to better understand our guests and make smarter decisions. Today, our engineers are using voice AR, AI, VR to provide greater utility for our guests and integrate richer shopping experiences into their busy lives. Now that we've established the right foundation, we're able to move to the next phase of our journey. Our team is now building out an even more holistic digital strategy that reaches deeper levels of personalization and engagement across every guest facing part of our ecosystem.
But at the heart of all of this is the gamble that paid off - keeping the physical store as the hub around which everything else can be built. That’s something that will have equal focus on 2019 and onwards as Target aims to deliver what Cornell calls ‘the most comprehensive suite of fulfilment choices’, a strategy that Chief Operating Officer John Mulligan picks up here.
The Target omni-channel transformation story is a welcome success story in a retail environment that is still claiming victims. We’ve written before about how retailers have had to relearn to love the store rather than flailing pointlessly after an online-only Amazon-wannabe agenda. Target learned that lesson earlier than most. As Cornell notes:
During the last three years, while the future of the industry was anything but certain, Target laid out an ambitious agenda to reimagine our stores.
So, while there’s more self-praise than some of us might be comfortable with, he has every reason to give himself a pat on the back.