Super-sizing in retail is so yesterday. Instead, Target is going even smaller with its new store formats.
The Minneapolis-based retailer opened a 20,000-square-foot TargetExpress store in Minnesota last month, the first of its kind for Target at about a sixth of the size of traditional locations.
“We’re testing things on an ongoing basis,” said Kamau Witherspoon, Target’s senior director of store operations. “This is just our latest innovation.”
The prototype feels like a drugstore along the lines of a CVS or Walgreens, but has its own Target flair with merchandise that includes groceries, bedding and smartphones.
After years of going big in the suburbs, Target is increasingly eyeing opportunities in the urban core following population growth in those areas. So far, only about 11 percent of its stores are in urban areas, but in 2012, it began testing an 80,000- to 100,000-square-foot store format called CityTarget, to appeal to the urban shopper. Now there are eight CityTargets in cities such as Chicago, San Francisco and Portland, Ore.
While Target’s bigger stores are more suited for customers who want to stock up on food and other essentials, CityTarget and TargetExpress are aimed at shoppers picking up fewer items.
“Our urban guests are on the go,” he said. “They are more focused on immediate consumption rather than stocking up. They want to get in and get out.”
It’s too early to say how many TargetExpress stores the retailer might eventually open, Witherspoon said. But Target already is planning four more locations for 2015 – one in Minnesota and three in the San Francisco Bay Area.
He added that Target moved much more quickly to open the first TargetExpress location. The store took less than a year from conception to opening day, compared to about two to four years for a traditional Target store.
The Dinkytown, Minn., TargetExpress, which includes a pharmacy, has a subset of items sold at a typical store.
Aside from basic socks and underwear, it doesn’t have an apparel section. Nor does it have furniture or patio sets. But it does have a full-size beauty department, along with the retailer’s fairly new beauty concierge service.
Since urban customers often have smaller households and are looking to fulfill immediate needs, the store sells more single items or those in small multiples.
“We know that they don’t need a 36-pack of paper towels,” Witherspoon said.
The store also has a lot of grab-and-go foods and beverages as well as “meal chasers.”
“I guess that’s what the students refer to as a snack,” Witherspoon said, laughing. “So we have tons of meal chasers.”
Target’s research also showed that customers were unhappy with the long lines and uninspiring offerings of other quick-trip stores, he said.
With those concerns in mind, TargetExpress is designed to have a central check-out queue aimed at getting customers through the line faster to one of four registers. It lowered the heights of shelves so customers can more easily see the whole store. And it includes items not always found at stores of this size, such as towels and back-to-college items.
TargetExpress also has a strong value and technology focus. It’s the first Target store to feature prominent space at the end of some aisles to highlight merchandise featured on Cartwheel, the retailer’s popular savings app.
And if customers don’t find what they want, they can search for items on iPads throughout the store. Customers can then scan the bar code for that item and purchase it from Target.com directly from their smartphone.
Target’s experimentation with smaller stores comes at a time when Walmart is aggressively building more of its smaller-format locations. It already has 350 Neighborhood Markets, which are 38,000 square feet on average, and 20 Walmart Express stores, which are 12,000 square feet.
Walmart executives have accelerated the rollout plan and now expect to open 270 to 300 more smaller-format stores this year, while also opening about 115 supercenters.