At Target, innovation begins from within

  • Article by: THOMAS LEE , Star Tribune
  • Updated: August 12, 2013 - 11:09 AM

The retail giant is moving speedily to catch up with and surpass new technologies and expand its customer base.

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Target’s Hi Tech support area, like Apple’s retail Genius Bar, lets employees attend workshops and get personal help with technology issues. The center has been so popular at the downtown Minneapolis campus that it might be expanded to Brooklyn Park or even as a roving team of specialists.

Photo: DAVID JOLES • djoles@startribune.com,

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Part two of a two-part series

 

Elwin Loomis had spent 12 years at Target Corp. when he realized he wanted to work for smaller technology companies that really focused on game-changing innovation. Over the next decade, Loomis’ quest took him everywhere from Hong Kong to North Mankato.

About a year and half ago, Loomis finally found a large corporation that energized him: Target.

“At Target, we’re at the right time, the right place and the right culture to really effect transformative change,” said Loomis, a senior group manager with emerging technologies. “There’s some really good stuff happening now.”

Two years after revamping its website, the Minneapolis-based retailer has gone on a digital tear, dramatically transforming a store-based culture ruled by marketers and merchandisers into an integrated innovation machine. The company that normally needs a year to plan collections of clothes and accessories now wants to roll out mobile apps and social media tools in just weeks.

“It’s not about just one physical manifestation on how you innovate like a research and development center,” said Beth Jacob, Target’s executive vice president and chief information officer. “Innovation is everyone’s day job.”

At times, Target seems to be operating at 4G speed. Over the past several months, the company has retooled Target Mobile, launched a digital coupon program via Facebook and live-streamed the doings of YouTube millennials residing in dorm rooms outfitted with Target merchandise that consumers could purchase by just scrolling over the products.

Such ambitious efforts come at a pivotal time for Target. The retailer has struggled to grow sales at its 1,784 stores in the United States as impatient and digital-savvy consumers flock to the Internet in search of deals, entertainment and convenience. As a result, retailers are searching for new sources of growth through online, mobile and social media.

Behind the scenes at Target, the cultural changes have been dramatic. Teams of executives regularly evaluate new technologies, whether they have originated from Target’s newly minted innovation center near Silicon Valley or from corporate employees. A dedicated group of technology and business strategists now try to quickly test inventions in individual stores. Every day, about 50 employees flock to Hi Tech, a Genius Bar-like support center where specialists offer personal IT help.

“Technology and business strategy are completely intertwined,” Jacob said. “In the world we live in, neither one can live independently. We need each side to have a full seat at the table to bring the best together.”

‘Turbocharging’ digital sales

With digital technology rapidly remolding the retail business, Target officials decided they needed two things: talent and speed. The former to create and evaluate technology and the latter to put that innovation to use in a quick manner.

All retailers are facing these challenges but “Target has been operating at a much more heightened level,” said Carol Spieckerman, president of Newmarketbuilders retail consulting firm. “They really want to turbocharge that other side of the business.”

Last year, the company opened a Technology Innovation Center in San Francisco, where they hope to recruit talented engineers and data scientists who can create next-generation mobile apps or smart ways to predict customer behavior.

But just opening an innovation office that looks like a start-up hardly guarantees innovation, experts say. What good are ideas if they never see the light of day?

Target is a retail giant whose hundreds of thousands of employees carry their own agendas and incentives. Merchants based in corporate headquarters, not technologists working in a remote office, tend to wield the most clout in such large retailers, Spieckerman said.

That’s why “the innovation should come from the outside in, not the inside out,” she said. “The San Francisco office should not just vet ideas through headquarters but challenge headquarters to rise to the occasion.”

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  • Sunglasses adorn a jackalope mounted near the entrance of Target’s new tech research and development facility in Minneapolis. The company is trying to foster a culture of innovation to keep up with rapidly changing technology. Contests reward employees for submitting new ideas.

  • «It’s not about just one physical manifestation on how you innovate like a research and development center. Innovation is everyone’s day job.» Beth Jacob

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