Ahead of stepping into his role as CEO of Target last week, Michael Fiddelke took to an August earnings call to share his top three priorities. Among them: customer experience.
Target is now working toward Fiddelke’s goal with a plan to invest more into store payrolls with an eye on adding more labor hours and improving the customer experience. Target’s effort includes new customer experience training for every employee at every store.
The change is not without cost. Target is eliminating about 100 roles at the store district level and 400 supply chain-related roles as part of the effort, but experts see this as a move in the right direction.
“I'm really excited about Target's direction,” Brad Jashinsky, director analyst at Gartner, told CX Dive. “I think when they had the CEO change, myself, others at Gartner and other industry analysts were talking about how this is what they need to focus on.”
The additional labor hours could help Target overcome some of its major in-store challenges, such as poor in-stock rates and long checkout lines, without cutting into the speed of its store-based fulfillment options. Its new training will play a role as well, provided the district-level cuts don’t dampen its impact.
More labor hours could also help Target solve other problems like reducing theft, according to Nikki Baird, VP of strategy and product at Aptos Retail, a unified commerce company.
“I cheer this,” Baird said in an email. “They need more cashiers, and they need more people in the aisle, especially in areas that are both high-value sales and high-theft targets. Alcohol, electronics, small appliances, beauty, health.”
More worker hours, fewer CX problems
Target’s in-store experience has suffered from a variety of problems, and putting extra hands on deck could help the retailer regain its shine, experts say.
Some of the specific issues with Target stores include messiness, poor merchandising, long lines at registers and too few staff available for assistance, said Neil Saunders, managing director at GlobalData Retail. Together, these “add up to a big deterioration.”
“Visiting Target stores is less pleasurable and less fun than it used to be,” Saunders said in an email. “There is far too much friction, and the experience is sometimes unpleasant. That’s an issue as it lowers the probability of people making visits, reduces visit frequency, and weakens conversion and basket size when people are in stores.”
Target’s problems with cleanliness and in-stock rates started in 2020, according to Jashinsky. The cause wasn’t unique — a lot of retailers struggled with uncertain staff availability, inventory prediction and customer behavior during the pandemic — but Target has had trouble making a rebound.
Adding more staff to stores will be key to helping Target overcome inventory and appearance challenges, as well as improving employee-customer interactions, according to Jashinsky. It could also help improve employee morale.
It’s much easier for store associates to offer a helpful, friendly customer experience if their store isn’t short-staffed, according to Jashinsky. Overworked and stressed-out associates can lead to unhappy customers, which creates a feedback loop.
“If you're running one of the checkouts at Target or Walmart or anywhere, and you have a line of 15 angry customers, that's going to impact your behavior as an employee,” Jashinsky said. “That's a hard day. Whereas, if you have that additional staffing, now there’s three people on the checkout line. It's more manageable, and the customers are going to be nicer to you as well.”
Finding the balance between fulfillment and CX
Digital sales have been a consistent bright spot for Target, in part due to its emphasis on in-store fulfillment options. This strategy has helped fuel fast delivery and pickup speeds.
Despite this success, Target has struggled to integrate curbside pickup without disrupting the in-store experience, according to Baird. Too many associates are working under order fulfillment deadlines, which reduces their ability to help customers in the aisles.
Target needs to remove some of the online fulfillment pressure from its stores, according to Saunders. The company has already started to move some fulfillment to dedicated centers, which could enhance the improvements made available through additional labor hours with a multipronged approach.
In November, the retailer said it was helping associates spend more time with customers by shifting more in-store fulfillment to stores with lower foot traffic.
Other in-store operational changes could further improve the experience, according to Baird. For instance, offering customers a window for curbside pickup rather than promising two-hour fulfillment could alleviate the burden on associates and give them more flexibility to help in-store customers.
Target’s updated training program will play an important role in improving associates’ ability to balance between in-store order fulfillment and assisting customers, especially when combined with the additional labor hours, according to Jashinsky.
The additional training could help store associates better focus on specific roles, whether fulfilling orders or assisting customers in certain departments, Jashinsky said. “It’ll be interesting to see if they're able to put more dedicated roles into certain parts of the store, so the employees really have time to focus on specific responsibilities.”
Many retailers struggle to find the time for training, according to Jashinsky. Target’s additional labor hours could help the company take associates out of their store for half a day or more without putting undue burden on their coworkers.
Cut if necessary, but not too deep
The cuts Target made to store district level and supply chain roles could lead to CX benefits at the store level, but they can’t unduly burden managers, experts say.
Target’s cuts are aimed at simplifying its organizational structure, according to an internal memo Target shared with CX Dive. They are designed to better empower store managers to meet customers’ needs.
While the cuts could affect store level operations, including the customer experience, they are the right call for the company, according to Saunders.
“Yes, cuts elsewhere can have an impact,” Saunders said. “However, Target also needs to simplify the store operations management structure, as it has become quite complex and inefficient. So, these are likely necessary.”
The important part of district-level cuts is that they don’t cut deep enough to interfere with Target’s plans for increased staffing and training, according to Jashinsky. Store managers need proper support to ensure they’re hiring and training employees to provide the best customer experience possible.
“If you're increasing staffing levels, but the hiring and the training is not being carefully managed, then that can create problems,” Jashinsky said.
The combination of staffing and training improvements at Target significantly improve its brick-and-mortar shopping experience, according to Jashinsky. However, the benefits won’t necessarily be felt for some time.
“Every retailer, and really every physical store location, has a culture,” Jashinsky said. “You can't just throw people at the problem and solve it overnight.”
