Target announced plans for $1 billion customer experience investments earlier this year, but the most significant changes may manifest in small ways.
Last week, the retailer announced plans for more than 130 store remodels, including plans for modernized bathrooms, and shared the thought process behind its latest shopping cart design. These seemingly smaller investments can have an outsized impact on the experience for key demographics — specifically, families.
“Busy families” are “the guests who power our growth,” Target CEO Michael Fiddelke said on a March earnings call. These customers buy more from the retailer and show stronger loyalty than other demographics.
“So we're leaning in here, knowing that when we serve busy families well, we create durable long-term value that has a positive ripple effect for all Target guests,” Fiddelke said.
Target has been aiming to win over these younger families with many of its recent changes, according to Halle Stern, senior principal analyst in Gartner's marketing practice. The in-store changes arrive on the heels of an expanded baby section and a focus on core merchandise segments as part of a multi year turnaround plan.
The retailer’s newfound emphasis forms the core of a strong CX strategy that will serve it better than an unfocused approach of trying to please every customer equally, according to Stern. Revamped shopping carts and nicer bathrooms may not seem high priority in the age of AI assistants and loyalty revamps, but properly targeted upgrades can build long-term relationships.
“It comes back to the basis of thinking about, foundationally, what does the customer journey look like?” Stern said. “What are customers actually doing, regardless of what we want them to do, and where do we have an opportunity to improve those touch points?”
Convenient carts and clean bathrooms matter
Not all impactful CX upgrades explicitly affect the shopping experience. It can be important to consider the other logistics of a trip as well, especially when young children are involved.
Target highlighted part of its cart redesign, including larger cupholders and deeper child seats, to that point. To Stern, herself a mother of two, these small changes add up to a big difference.
For example, a small flat surface on the handles of the cart in front of the child seat can hold a bag or keys. In the past, a mother with a kid and no bag might have to stow her phone or keys away inside the actual basket of the cart, Stern said. One simple addition simplifies the experience.
Modernized bathrooms can make a huge difference as well, according to Stern. Ensuring these spaces are reliable and fully equipped can be essential for ensuring parents have a good, reliable experience that keeps them coming back.
“As parents, we all know going to a place where the bathroom is disgusting, and you have to put your kid on a changing table, or you're going, ‘Don't touch anything’ — it ruins the whole experience,” Stern said. “I'm not going to go to that place again knowing that it's going to be an absolute disaster. I'll just go to a competitor that I know has a moderately clean bathroom.”
No experience can please everyone, so strategize
Target is switching from a strategy that tries to embrace a massive audience to one that focuses on its strongest customer base — families — which Stern sees as a step in the right direction.
Target’s financial results have underperformed in the recent past, and its family-focused changes are the brand’s attempt to reverse its course by making Target “the most delightful experience in retail,” EVP and Chief Merchandising Officer Cara Sylvester said on the March earnings call.
“Our performance over the last few years has not met expectations, and that is on us,” Sylvester said. “We lost the clarity and the discipline that make Target a place loved by busy families.”
Target’s newfound emphasis on winning a specific demographic could help it stand out against its major competitors, according to Stern. It’s also the blueprint for a great CX strategy that any company can follow.
The process starts with identifying a businesses’ highest priority customers and figuring out which investments will improve their experience, according to Stern. A focused approach will bring in a higher return on investment than trying to please every single customer.
“If we improve the experience for everybody, we've improved the experience for nobody, because something is going to get lost in the shuffle,” Stern said. “But if we can identify our target segments and evaluate them for lifetime value, trying to reduce churn, and increasing growth, we can invest in what their values, needs, motivations and psychographics are and make adjustments to their journey based on that.”
Target’s efforts are a sign that the company is on a promising path when it comes to the experience, according to Stern. Listening to its customers and focusing on cultivating a family-friendly environment, along with associated investments in marketing and promotions, ought to have an outsized impact on customer loyalty.
“It's very obvious who their segment is, and it sounds like they're listening to their segment by making minor changes versus, ‘Hey, we have a brand new app that we spent a billion dollars on.’ That, to me, wouldn't improve my experience with Target,” Stern said. “But the minor changes are making this huge difference.”
