NEW YORK - In a move to bring shoppers back to its stores, Target (TGT) is embarking on an ambitious redesign aimed at helping people who need to dash in for milk to get out quickly while encouraging those who want to wander the aisles to linger.
The new layout was unveiled by CEO Brian Cornell in Las Vegas Monday. It will feature a separate entrance and 10-minute parking for shoppers looking to pick up an online order or some essentials. New center aisles will be curved rather than squared off, to inspire people to explore, says Mark Schindele, senior vice president of Target Properties. LED track lighting will replace fluorescent fixtures, and brand boutiques meant to replicate a specialty-store feel will showcase rotating looks.
The first of the redesigned stores will open in suburban Houston this fall. About 40 more stores will get the remodel treatment by October, using the Houston prototype as a template. More than 600 of Target’s 1,800 total locations are scheduled for updates over the next three years. It expects the remodeled stores to see a 2 percent to 4 percent sales bump.
“We wanted the design to be flexible because that’s what shopping is all about,” Schindele told The Associated Press.
The remodeling is a key part of Target’s strategy to win back shoppers and rev up sales. Unlike rival Walmart (WMT), which has drawn more customers and notched higher sales at established stores, Target has seen three straight quarters of declines for that sales measure, and fewer shoppers in its stores.
Investing in stores is an acknowledgement that the in-person experience remains important, even as Amazon (AMZN) and other online retailers draw shoppers away from traditional retailers.
At an investor meeting last month, Target executives spoke bluntly about the shabbiness of many of the chain’s stores. It pledged to spend $7 billion on the remodeling plan and to accelerate its expansion of small-format stores, bolster its online operations and launch new brands.
“We’ve got to reimagine that store experience,” Cornell said then. “Today’s millennial shopper doesn’t enjoy shopping one of our tired stores that hasn’t been touched in 10 years.”
Target has also tested new store designs in Dallas and Los Angeles, but Houston’s is the most ambitious store redesign to date. Last fall, Target launched an initiative in 25 stores in Los Angeles where it tested an updated grocery presentation with new lighting and foods to prepare single meals displayed together. The new grocery presentation was later rolled out in 16 Dallas stores. Cornell said shopper feedback in Dallas and Los Angeles has been good.
The Houston prototype’s separate entrances for shoppers in a hurry and those who aren’t is among its biggest novelties.
The entrance on the right will have a dedicated pickup counter for online orders. Shoppers will also have the option of having their order brought to their car. Groceries, wine and liquor will be located here, rather than in the back where they’re usually found. Seasonal essentials, like school supplies in the fall, will also be found nearby.
Shoppers using the “inspiration” entrance on the left will see the brand name displays and a section highlighting seasonal fashion. Beauty, jewelry and accessories departments will be nearby. There will also be seating outside of Starbucks (SBUX). An area to hold store events will be located between the two entrances.
Target will tweak the format based on shoppers’ responses. “This represents our current thinking,” Schindele said, “but we are going to learn a lot.”