Target CEO notes dip in Hispanic shopping, outlines retailer’s strengths at tech conference
ASPEN, Colo. — At Fortune’s Brainstorm Tech Conference here, Target CEO Brian Cornell sat down to discuss the company’s strategy to reach its consumers and where it sees itself in the retail landscape — touting the key role its store base plays in its business even as it builds up its digital infrastructure. He also emphasized the company’s connection with its shoppers — and noted a sizeable dip in shopping activity among Hispanic consumers in the United States in the past several months.
He cited an 11% drop in shopping in the Hispanic community — which a Target spokesperson said was a reference to industry-wide data from the NPD Group, according to the Minneapolis Star-Tribune — and emphasized that Target is working to connect with the shoppers that are staying in more.
“There’s almost a cocooning factor,” Cornell said. “They are staying at home. They are going out less often, particularly along border towns in the United States. You’re seeing a change in behavior.”
But that has not deterred the company’s Hispanic-focused marketing efforts, as well as its listening efforts to better understand their needs.
“If you look at our current media campaign, you’ll see a really important balance between our general population campaign and a very focused effort to continue to build that relationship with the Hispanic consumer.”
Cornell noted that the company also is rethinking how it builds its consumer relationship — building up its digital capabilities and providing such new fulfillment offerings as Target Restock, which it launched at the end of June and allows REDCard Holders to digitally fill a box with household essentials for next-day delivery.
A big part of its experience focus is technology, and Cornell highlighted Target’s recent efforts to foster innovation by providing seed money to innovators — an effort he said made him realize that the company’s innovation efforts are best when aimed at improving customer experience.
“Innovation has to first start with, ‘What is our guest expecting from Target, how does it help out core enterprise and what are some things we can do to build a stronger brand?’” he said. “We’re working on the future and embracing technology, embracing innovation but really funneling it into our core enterprise to meet the needs of our guests each and every week.”
In addition to building up the company's technological capabilities, Cornell acknowledged that offering brands that shoppers are looking for is an integral part of reaching consumers. Among the company’s earliest success stories was its work to bring Method — whose co-founder Eric Ryan spoke about his company’s mission and partnership with Target at the third annual Drug Store News/Mack Elevation New General Market Summit. A more recent example of this is Target’s work with razor company Harry’s, which began online as a subscription-based service. Target brought Harry’s into 1,800 stores earlier this year and noted a strong customer response.
“We know brands in this environment are still important to the guest, so we’re investing in our own brands but also making sure we're building great partnerships with our vendors and curating great brands on behalf of our guest,” Cornell said. “We feel like we help co-create some brands — we take great brands, great start-up vendors and use our understanding of the guest, our physical and now digital assets to bring these brands to life.”
Looking to the future, Cornell told attendees that perfecting the harmony between Target’s physical and digital presence is a priority, though he said that the physical store will continue to be a large part of its strategy. The continued centrality of physical retail is something he said was evidenced in Whole Foods’ recent acquisition by Amazon.
“I recognize that we’ve got to be thinking about tomorrow, but tomorrow includes physical stores and a great digital connection with a guest,” he said. “And I think the Amazon-Whole Foods announcement just validates that even Amazon recognizes a great physical presence is going to play a role in the future. … In today’s environment, stores still matter, and even for Amazon, I think there's a recognition that a physical store and proximity is important to the consumer.”
It’s Target’s ability to deliver on both of these, as well as its agility, that Cornell sees as positioning it well for the coming years.
“The versatility of our model, the multi-category nature and our ability to fulfill that both from a physical and a digital standpoint makes us very unique in the market.”