Report: Target continues internal IT focus
Target Corp. is making a number of aggressive moves to become more self-reliant when it comes to IT development.
According to the Wall Street Journal, the latest move is the adoption of the DevOps software development strategy. DevOps emphasizes increased cooperation among software engineers and product deployment employees, and also focuses on agile development and testing methods.
While some Target IT employees had been informally utilizing DevOps strategies for a few years, new CIO Mike McNamara has been more formally adopting the approach since he came on board in February. McNamara has even created an internal DevOps incubator called Dojo, and also offered hands-on workshops for senior-level IT executives.
The switch to DevOps falls under Target’s broader $1 billion effort to revitalize its technology infrastructure. Among the benefits DevOps offers is a reduction in need for IT outsourcing, which has also been a major focus of Target this year.
Other steps to reduce the need for IT outsourcing include Target’s recent call for applications to a new retail technology accelerator it will run next year in partnership with technology accelerator TechStars. While companies that participate in the accelerator will not necessarily receive investment from or be acquired by Target, one of the retailer’s stated goals is to learn about quick, innovative development techniques from start-ups.
In addition, Target plans on hiring 1,000 new global technology workers with modern technology skills like agile development, to focus on open-source development of mobile and online tools. Although Target has traditionally outsourced close to half its IT workforce, the retailer wants to bring technology development in-house to better take advantage of proprietary knowledge and applications.
Target seeks to hire about 500 IT workers at its Minneapolis headquarters and 500 at its technology facility in Bangalore, India.
Top retailers back Obama climate change pledge
Ikea and Best Buy are among the top retailers supporting a U.S.-sponsored pledge to act on combating climate change.
President Barack Obama met with a group of business leaders Monday at the White House to announce the signatories of the American Business Act on Climate Pledge.
"The perception is that this is an environmental issue, it's for tree-huggers, and that hard-headed business people either don't care about it or see it as a conflict with their bottom lines," Obama said.
Obama praised Walmart for installing solar capacity and Costco for their purchases of renewable energy, among others.
"Climate change is one of the world's biggest challenges. With this understanding, the Ikea Group and the Ikea Foundation have made bold commitments totaling 1 billion euros to accelerate the transition to a low-carbon economy and support the communities most at risk. Our mission is to ensure we have a positive impact on people and the environment," said Lars Petersson, U.S. Ikea president.
In June, the Ikea Group committed $682 million for investment in renewable energy, building on the $1.7 billion invested in wind and solar energy since 2009. In addition, the Ikea Foundation has committed 400 million euros $454.3 million of funding to support the communities most impacted by climate change.
Target starts up accelerator application process
Start-ups looking to revolutionize retail have a significant new opportunity for support.
Target Corp. is officially kicking off the application process for a new retail accelerator it is launching in 2016 in partnership with Boulder, Colorado-based start-up accelerator Techstars. Target and Techstars will accept applications for the accelerator, which will be based in Target’s headquarters city of Minneapolis, through March 2016. Selections are expected to be complete by April or May, with the accelerator lasting from June to September.
Target has signed a three-year agreement with Techstars which will include three rounds of start-up development and funding. In an interview with Chain Store Age, Target spokesperson Jenna Reck said the program sprung from efforts initiated by Target chief strategy and innovation office Casey Carl.
“We’ve had a dedicated innovation team for a couple of years,” said Reck. “Last year, Carl accelerated the work of the team and this spring hired three entrepreneurs-in-residence (EIR) who are experts in areas such as digital and brand-building. They were charged to create business and drive new growth for Target.”
West Stringfellow, digital EIR for Target, recommended that Target launch an accelerator program and partner with TechStars based on its 90% success rate. Goals of the program include creating a new community of innovators in Target’s backyard.
“We want to help build a start-up and tech community in the Twin Cities,” said Reck. “After participating in an accelerator, at least half of start-ups usually plant some type of permanent roots in the city where the program took place.”
In addition, Reck said the accelerator project fits into Target’s larger turnaround initiative.
“We’re on a path to transformation,” she said. “By brining start-ups into our headquarters we can learn from them and see how they work. Start-ups are quick, scrappy and resourceful.”
The accelerator will initially select 10 startups, as well as a team from Target. Selected startups will receive financing, mentoring and business development tools.
Specifically, this will include an offer of $20,000 from Techstars for 6% equity in the company, with the option to take up to another $100,000. Target may also offer to invest in or purchase start-ups, but that is not guaranteed. At the end of the program, media and investors will be able to see public demos of the start-ups.
“We don’t know what we don’t know,” said Reck. “We want to leave things open-ended.”
Target says it will consider all types of startups, including those that provide behind-the-scenes software as well as customer-facing systems or products. Start-ups will be allowed to work with other retailers besides Target.
Mentors will include Carl and Stringfellow, as well as Target executives Jamil Ghani, VP of enterprise strategy, and Jason Goldberger, president of Target.com and mobile.
Stringfellow previously served as chief product officer of Bigcommerce, and has also held several senior director- and director-level positions for PayPal and several product manager roles at Amazon.com. In a Target blog posting, Stringfellow said the most important start-up aspect Target and Techstars will look for is team. Other factors for consideration include the market being targeted, progress that has been made, and strength of idea.
“A great team can change an idea and still succeed, but a mediocre team will struggle to execute on even a great idea,” said Stringfellow. “We look for people who can execute quickly, are coachable and listen well, are thoughtful but make fast decisions, are intellectually honest, are persistent, follow through and are insanely passionate about what they do. We’re looking for rock stars.”
Target has operated its own innovation center in San Francisco since 2013, and many other large retailers also have their own dedicated internal innovation programs. Reck said Target has about 50 total members of its innovation team, based both in San Francisco and Minneapolis.
“The accelerator will be complementary to the innovation team,” said Reck.
When asked if Target’s inclusion of an in-house team is a sign the retailer might be considering launching its own technology companies or products, Reck said there are currently no plans to do so. However, she clarified that at this stage, Target primarily seeks to discover more about how start-ups create and drive innovation.
“The goal is to have the in-house team work hand-in-hand with the start-ups and learn from them,” said Reck.
Target is upping the innovation ante by looking outside the company to help develop start-ups it will not directly control. By focusing on the best ideas it can find anywhere, rather than on the best ideas it can internally generate, Target is poised to help advance retail innovation both inside and outside the company.
Apply to the Target-Techstars retail accelerator here.