Target Corp. CEO Gregg Steinhafel told analysts last month that the company would soon deliver “some eye-popping, irresistible deals.”
As the Minneapolis-based retailer sought to regain customers’ trust after a major consumer data breach, Steinhafel said the plan was to “really up the ante” to emphasize Target’s “unbeatable pricing proposition.”
A few weeks into the effort, some Target shoppers say they aren’t seeing a big difference.
“I haven’t noticed that the deals are any better, at least not yet,” Stephanie Grossinger of West St. Paul said while shopping the Robert Street store.
Ruth Pryor of Prescott, Wis., shops Target twice a month but thinks Wal-Mart still bests Target on price. “Wal-Mart beats Target on groceries and paper products,” she said.
Kathee Tesija, Target’s executive vice president of merchandising, said customers who aren’t noticing better deals may not be looking for them. But they are there, she said, and the retailer has seen traffic improve when the promotions are on.
Serious bargain hunters say they’re noticing opportunities to save money. Karen Gunter of Champlin, whose website Creativecouponing.com alerts shoppers to great deals, thinks Target’s prices have been lower lately.
“They recently had $20 off a $100 purchase in the baby department where you could stack Cartwheel [Target’s coupon app], manufacturers’ coupons and a free Target gift card with purchase,” she said.
The deals on electronics have been notable, said Deal news.com features director Lindsay Sakraida. She praised the recent prices on the Samsung Galaxy Note 3 phone for $250, a Westinghouse 40-inch LED HDTV for $280, and a Samsung Smart LED 1080p HDTV for $650 (plus you got a $50 Target gift card). Sakraida said the Samsung Smart TV deal is the best one she’s seen on that model.
Other deals weren’t as hot. A Nikon D5200 DSLR with 18-55mm lens for $750 was available online for $508, and an iPad Mini Wi-Fi 16GB for $299 plus a $30 Target gift card that was available at shoprite.com for $250.
Target spokesman Joshua Thomas said that the price-reduction strategy was never meant to be a broad sweep of prices but rather a focused effort on popular items, often at deeper discounts. It’s an extension of Target’s holiday strategy where, for example, all sweaters were discounted 40 percent before Christmas.
More recently, Target put its entire swimwear collections for the whole family on a buy-one-get-one-half-off promo. Last week, a similar deal was offered on the entire kids’ Cherokee collection for Easter. “It’s the first time we’ve offered a discount that deep on Easter apparel,” Thomas said.
Some of the deals have been nearly unprecedented, Target says. At the end of February, five 12-packs of Coke were only $10, as advertised in the Sunday circular. “It was the lowest price we’ve offered in years,” Thomas said.
Other prominent, if not eye-popping, deals included 40 percent off all C9 activewear and shoes via a mobile coupon available at Target’s Cartwheel app. The redemption rate was 10 times higher than the average one-day deal, according to Target.
Regaining shoppers’ trust
Target’s new deals will need to attract a lot more shoppers before the discounter emerges from a yearlong funk. The company’s same-store sales have been falling for more than a year, even before the company revealed the holiday season breach of financial and personal information for up to 110 million customers. Just 33 percent of U.S. households reported shopping at Target in January 2014, the lowest penetration for Target in the past three years.
Target cannot rely solely on its loyal customers to carry it through the data breach aftermath, according to retail analyst Amy Koo of Kantar Retail in Boston. “They’re realizing that they need to reinforce value for their non-best guests by keeping the focus on the ‘pay less’ part of their ‘expect more, pay less’ slogan,” she said.
The company is hoping the breach won’t scare away some customers to a point of no return, like what happened in J.C. Penney’s ill-fated “everyday low price” phase. Tesija acknowledges that the confidence of some shoppers was lost, but said, “We are committed to winning those guests back. That means doing what we do best: offering all the items on our guests’ lists, as well as surprises they never expected to find, at unbeatable prices.”
Vladas Griskevicius, associate professor of marketing at the University of Minnesota’s Carlson School of Management, said the breach may feel like a hot-button issue for consumers now. But he said it will fade, especially when a company has tried do something about it, as Target has. “Who remembers the Toyota gas pedal sticking today unless you remind people of it?” he asked.
The discounter isn’t saying how long the improved deals will continue, but Koo said she isn’t expecting a letup soon.
“Target’s been able to keep longtime loyalist shoppers after the data breach, but they’re going to have to keep these unbeatable deals going for a while to reinforce habits for the skeptical shopper,” she said.