Rewind to three years ago: Amazon.com is number 12 on the list of World’s Biggest Retail Chains, just one spot behind Target and seven places away from becoming a top-five retail giant. Target is quaking — its historic competitors are shuttering stores across the US, while its new digital-first competition is rapidly overtaking legacy retailers. So what does the company do? It invests over $7B in digital shopping experiences — much to the chagrin of Wall Street and investors. The company’s stock plummeted 13 percent.
Today, however, Target’s digital-first investment is yielding big returns. Stock is up 93 percent from the post-investment low, and the company has had two years of steady growth. The third-quarter of 2019 marks eight straight quarters of sales increases for Target — growth that outpaces even Walmart.
So is it too late to go digital? As Target shows – no.
Just emulating what competitors have been doing already for years, though, isn’t a strong enough play when a brand is late to the game. Target’s turnaround provides a lesson for how to stage a competitive digital comeback — a lesson that applies to enterprises across industries that may have missed the boat with respect to new technologies.
Shoot to win: How to go digital in 2019
There’s no denying that it’s late to be going digital — whether in customer service, supply chain management, or business intelligence. That doesn’t mean it can’t be done, though. Target demonstrated three emulation-worthy strategies for how to invest in a tech-first business model.
1. Don’t just look for a band-aid
Target realized that it needed more than just a quick fix. The company focused on long-term strategy and vision over short-term financial gains, which resulted in, unsurprisingly, short-term losses and long-term gains. Companies that are late to the game technology-wise need to do more than just buy into of-the-moment technologies; they need to restructure their organizations to create a sustainable and scalable digitally-native brand presence.
2. Go beyond what competitors are doing
Playing catch up is a losing game when it comes to technology — the landscape shifts so rapidly and dramatically that it’s paramount that brands go beyond investing in what their competitors are doing at any one point in time. Target, for instance, didn’t just give its e-commerce platform an upgrade; it also turned its stores into fulfillment centers, allowing customers to order online and pick up the product in over a thousand stores. This strategy costs Target 90 percent less than storing products in warehouses would. Brands that wish to emulate Target’s comeback need to look to innovative ways to leverage digital trends.
3. Use the best of 2019 technology
One of the first moves that Target made after announcing its $7B investment was to acquire Grand Junction, a transportation technology company that enabled Target to compete with Amazon Prime. Almost every area of business has a comparable opportunity for investing in AI, automation, and analytics systems. Whether that be investing in a customer service SDK or a brand-specific software, enterprises should examine areas in which they lag behind the competition, and find a modern technology solution.
Making the impossible possible
Target exceeded everyone’s expectations. Many thought the company was toast back in 2017, but through a savvy revamp, the company demonstrated that it’s never too late, even in the face of technological obstacles.