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Unformatted text preview: 2010 Remodel Program At Target, we understand that constant innovation is critical to our long‐term success, so we’re making changes in every corner of the store, with big, store‐wide, transformational impact. We’re refreshing our existing store base by incorporating merchandising reinventions across the sales floor, including food, beauty, home, video games, electronics and shoes. Our primary focus in 2010 is to remodel about 340 stores, far more than in past years. We completed slightly less than 100 of these remodels in the first quarter, and expect the remaining remodels to be spread roughly equally across the second and third quarters. The majority of these remodels are concentrated in key markets that present significant opportunity based on store count, sales volume and guest demographics. Objective Our objective is to enhance our relevancy and drive guest traffic and sales while profitably growing our market share. We pursue new merchandising strategies because we understand that constant innovation creates the excitement Target guests expect and the shopping experience they love. Expanded Food Assortment – “PFresh” PFresh is our high‐impact, low‐investment solution to better accommodate our guests’ needs by becoming their complete fill‐in grocery destination. Compared with other general merchandise locations, PFresh stores offer a deeper assortment of dry, dairy and frozen foods, as well as the addition of the most‐wanted fresh perishables like meat, produce, baked goods and deli. This assortment includes the items most often found on our guests’ shopping lists, with a thoughtfully edited mix of the best national, owned and local brands. PFresh offers around 90 percent of the food categories found in a SuperTarget with about 60 percent of the items, in approximately half of the space devoted to food in a SuperTarget. The perishables area in a PFresh general merchandise store Our objective is to drive traffic and sales by providing a broader mix of merchandise delivered with the same fast, fun and friendly service our guests appreciate and rely on, enabling us to be their favorite one‐stop shopping destination. 2010 Remodel Program Stores The PFresh concept was originally launched in October 2008 in two Minnesota stores. In 2009, we incorporated it into more than 100 new and remodeled stores, including the entire Philadelphia market. Through new store openings and remodels, we’ll add approximately 350 additional PFresh locations in 2010. Today, a newly constructed general merchandise store with the PFresh layout has the equivalent of 55 sides* of food, compared with 34 sides in general merchandise stores opened in 2008. This deeper food content adds about 5,000 square feet to the store, making it just over 130,000 square feet. When we remodel a store to incorporate the PFresh layout, rather than increasing the size of the building we add space for food by eliminating the least‐productive items in other categories throughout the store, using a customized approach unique to each location. While 55 food sides is our prototype for new PFresh stores, unique designs of our existing stores may lead the number of food sides to vary in locations we remodel to incorporate PFresh. Marketing In‐store signage and visual elements are used to convey freshness and value and express our commitment to food. We use dramatic visuals and compelling overhead signing with taglines that educate guests about our expanded food assortment and reinforce our exceptional prices. In‐store signing in a PFresh general merchandise store * A side is ½ of a 24 foot aisle. Marketing used to launch PFresh in the Philadelphia market 2010 Remodel Program Financials The investment in a new PFresh store is about $1 million higher than in a general merchandise store without PFresh. The differential in investment between a SuperTarget and a general merchandise store without PFresh is approximately $10 million. Remodeling an existing store to include the PFresh concept requires an investment of around $3 million, of which about 60 percent is related to merchandising initiatives like PFresh and transformations in Beauty, Home, Video Games, Electronics and Shoes. Destination Beauty Beauty is the intersection of frequency and fashion, making it a key growth driver for Target. Over time, we’ve enhanced our assortment with higher‐
end brands, and, through guest research, have learned that when guests shop Beauty, they want to explore and learn about the product. Therefore we are providing our guests with a more engaging environment that encourages browsing and buying. Destination Beauty offers guests an enhanced experience that is easier to shop, fosters discovery and flows seamlessly with the rest of the store. We’ve introduced elements usually found at upscale beauty retailers, such as shelf lighting and illuminated focal fixtures, and adapted them to create a uniquely‐Target experience. This new environment features improved endcap presentations for new and featured products, testers and educational tools to help guests find the right products, inspirational graphics and improved sight lines. Destination Beauty delivers on both our guests wants and needs by offering discretionary products such as hair appliances and accessories, and frequency categories including skin care and beauty. In Beauty, guests can select items from national brands along with collections from designer partners including Sonia Kashuk, Jemma Kidd, Napoleon Perdis, Petra Strand and more. Destination Beauty endcap presentations 2010 Remodel Program Home When guests think “Target,” they think “Home.” Target is a top choice among consumer for Domestics, Housewares and Stationary. Our guests see each Home purchase as a true investment that requires careful consideration. They are keenly aware of the value created through the right balance of quality and price, and have high expectations that Target will deliver both. Home reinvention in a general merchandise store Target remains intently focused on Home because it is vital to fulfilling the “Expect More” side of our brand promise and contributes significantly to gross margin. To inspire guests to shop in this area, compel them to buy and ensure they are confident with their purchasing decisions we are improving our merchandise, repositioning our owned brands and dramatically enhancing the shopping environment. We’ve made our owned brand assortment even more appealing and intuitive to shop. We are better defining each look, clarifying our assortment, growing owned brands and designer partnerships where they make sense and focusing our brands to align with our guest segments. Rather than increasing the number of items we carry, we’re better organizing and simplifying what we have while improving quality. To dramatically improve the in‐store experience, we’re creating a more open and visually compelling department. Dominant worlds with inspirational pop‐up focals make it easy for guests to find the category they are looking for and showcase each product. Lower Home reinvention in a general merchandise store fixtures show the breadth of the product offering with bold messaging about product attributes and more opportunities to “touch and feel” the product. In addition, there are wider pass‐through aisles that help guests see through the department to find exactly what they are looking for. 2010 Remodel Program Video Games The video game category continues to be one of the highest sales productivity areas in our stores. To continue to engage our guests we’re transforming the department, creating a one‐of‐a‐kind experience that is more intuitive with games organized by platform, signed with each brand’s signature color and segmented by genre. For easier access to game information, games are positioned on tethers to provide easy access to information on the back of the package. We’re lowering fixtures to make the environment more welcoming and make it easier for team members to see when guests need assistance. We’ve also added an interactive learning and research center that links directly to Target.com, and we’ve moved video game trial stations to the back endcaps so guests can play without blocking the aisles. Electronics Video game reinvention Electronics is positioned alongside video games in our stores, and we’re transforming the two areas together to create a cohesive electronics and gaming destination. The new TV wall provides a compelling focal point for the department, with realistic viewing angles that showcase our high‐quality assortment. In addition, our TV delivery and installation service continues to be enthusiastically received by our guests, both for its convenience and value. With services starting at just 99 dollars, guest can relax and let installation experts handle the delivery and set‐up of their new TV. Other available services include wall mounting, TV recycling and video game set‐up. To provide guests with added convenience and a differentiated shopping experience in cell phones, we’ve introduced Bullseye Mobile Solution service in more than The new TV Wall in Electronics 100 stores. Bullseye Mobile Solutions is an in‐store wireless service that enables Target guests to purchase mobile phones and activate contracts from three of the nation’s top carriers. This in‐store kiosk provides guest with an edited assortment of cellular merchandise including handsets, chargers and cases. 2010 Remodel Program Shoes In shoes, we’re providing a more upscale and inviting shoe department for our guests. The area now provides a more engaging shopping experience with improved sightlines, better in‐stock visibility and greater convenience and comfort with additional seating and mirrors. The layout creates a simplified operational process for our stores, leading to better instocks and higher store productivity. Shoe department in a general merchandise store ...
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This note was uploaded on 11/22/2011 for the course FIN 505 taught by Professor Chingshing during the Spring '11 term at Solano Community College.
- Spring '11
- Corporate Finance