Diana Marszalek 07 Oct 2019 // 12:59AM GMT
ORLANDO — By 2016, Target was in midst of its biggest business slump since its 1962 launch — reeling from a massive data breach, a failed Canadian expansion and stiff competition following the 2008 financial crisis.
Outsiders believed turning around the company was “going to take nothing short of a miracle,” Rick Gomez, the retail chain’s chief marketing and digital officer, said Thursday at the ANA Masters of Marketing conference in Orlando.
Today, however, Target is once again a growing company, the result of a major overhaul of the business that, with marketing at its core, was as much about returning the retailer to its roots as repositioning it for today’s shoppers. “We have gone from a brand that had undeniably lost its way to one of the clear leaders in retail,” Gomez said. “It didn’t take a miracle. It took getting back to basics.”
For Gomez, who detailed the chain’s turnaround in his conference presentation, that meant revamping the business and its marketing while adhering to what has been a core tenet of the business since Minneapolis’ Dayton Company created it: “Meeting our guests needs in a truly differentiated way."
Which was no easy — or cheap — feat. Target invested roughly $7bn in an expansive effort driven by putting guests first, working with a sense of urgency, honesty and embracing new approaches, Gomez said. So far, that has included launching around two dozen store-owned brands, creating top-tier digital experiences and fulfillment services and bringing small-scale Target stores (which were created for suburbanites) to urban areas and college towns.
The chain overhauled its loyalty program, a new personalized and localized version of which will launch this month. Starting wages for employees will be raised to $15 an hour by the end of 2020.
Long known for its partnerships with houseware and clothing designers such as Michael Graves, Isaac Mizrahi, Lilly Pulitzer, Marimekko and Hunter, Target has also doubled down on its commitment to making style inclusive. In addition to marking the 20th anniversary of the collaborations this fall by offering designer items at original prices, the chain has launched lines offering choices like hard-to-fit bra sizes and clothing for kids with disabilities.
“It's about just more than making these products affordable. It’s about more than cheap chic. It’s ultimately about designing for all,” Gomez said.
Throughout it all, the marketing team had no choice but to work fast, which led to moves like launching its 2018 “Target Run” campaign in just nine weeks. “The biggest risk would have been to move too slow,” he said. The company also changed the way it handles PR by restructuring its internal marketing operation and its agency relationships.
The effort, however, was far from foolproof. A particularly high-profile marketing gaffe included marking the opening of a store in Manhattan’s East Village with a campaign that included elements of a neighborhood takeover. “Our intention was to celebrate the community. But we made a mistake because we tried to be the community instead of being Target,” Gomez said.
Ultimately, Target accepted the community’s criticism (which covered topics from gentrification to Target putting a temporary TRGT branding on the building that housed famed music club CBGB) and apologized, Gomez said, and strategically avoided similar mistakes when it opened another Manhattan store soon afterward.
“None of this was easy,” Gomez said.
“Change is not always comfortable. But in today’s environment, the best work is often not comfortable,” he said.