Aiming for Innovation

Target Corp. has long been an innovator in retail marketing and merchandising. But its latest efforts to think outside the box are taking it even further afield.



In recent months, Target has unveiled several groundbreaking technology initiatives that go far beyond typical rollouts of name-brand applications. These initiatives did not come out of the blue. Brian J. Cornell, who become CEO of the company in August 2014 with a goal of reinventing how the retailer does business, announced in March that Target would invest $1 billion in technology and supply chain during 2015. Cornell’s rationale for the substantial investment is to create a customer-centric, channel-agnostic shopping experience.



In addition, Mike McNamara, who became CIO in February 2015, has supported internal adoption of the collaborative, agile “DevOps” software development methodology. So far, this top-level commitment to technology innovation has produced some interesting results.



Target is trying to modify its entire corporate culture to respond to changing needs of the new digital customer. Keri Stelle, director, Target Technology Services, described a new breed of consumer the retailer called “demanding enthusiasts” at the recent SAP Retail Forum.



“They want an emotional connection,” said Stelle. “You need to connect the channels. Demanding enthusiasts can shop anywhere, anytime and find the product. These are table stakes. If you can’t do it, you’re behind.”



To ensure it can adequately meet the needs of these customers, Target formed an internal guest center of excellence earlier this year. The center’s team focuses and trains on what needs to be done to stay current with customer experience.



“You need to break down internal silos,” Stelle said, “and realign internal teams around channels, not internal functions.”



In another example of internal innovation efforts, Target officially kicked off the application process for a new retail accelerator it is launching in partnership with Boulder, Colorado-based start-up accelerator Techstars. The retailer signed a three-year agreement with Techstars, which will include three rounds of start-up development and funding.



“We’re on a path to transformation,” said Target spokesperson Jenna Reck. “By bringing start-ups into our headquarters we can learn from them and see how they work. Start-ups are quick, scrappy and resourceful.”



The program is being led by West Stringfellow, former chief product officer at Big Commerce and Rosetta Stone, who joined Target’s Entrepreneur-in-Residence program earlier this year.



Ten companies will be selected to work out of the Target offices for three months next summer. They will be mentored by Target executives, as well as other local entrepreneurs and business leaders. In addition to the 10 start-ups, one team from Target will also be included in the program.



Socially Yours



Target is also ramping up its social efforts, with programs that turn social media into a full-fledged commercial channel, rather than simply a marketing/promotional channel. For Halloween, for example, Target rolled out a six-part YouTube interactive video series, “The House on Hallow Hill.” The interactive videos took viewers through a haunted house and gave them options to visit different themed rooms, such as “The Ghoulish Graveyard.”



Consumers were able to directly shop for items featured in the themed rooms, with a 10% discount. Target’s ultimate goal was to catch people as they were already in a Halloween mood and obtain spur-of-the-moment sales.



In addition, Target recently partnered with Shazam, an online music app that has been expanding its functionality, to capture sales from consumers as they watch TV. During fall 2015, Target ran TV ads that asked consumers to “Shazam to Shop Now.” Consumers could then immediately open their Shazam app, point their mobile device camera at the Shazam logo on the ad, and pull up a shoppable page featuring many of the items from the ad. Target ran a similar promotion that let consumers use Shazam to have access to a shoppable page featuring items from an 11-page spread in the September 2015 issue of Vogue.