A glimpse of Target's (smaller) future
- Blog Post by: Thomas Lee
- December 8, 2011 - 5:01 PM
As a rule, I generally don't like to work during vacation (not really a rule, more like a law). But earlier this week, I was walking through downtown San Francisco with a friend and saw this:
Yes folks, that's one of Target Corp.'s new CityTarget formats, set to open next year in San Francisco, Chicago, Seattle, and Los Angeles. The smaller stores, which focus more on everyday essentials, are about 60,000 to 100,000 square feet, compared to the usual 125,000 to 180,000 square foot big box locations.
CityTarget is one of the retailer's key strategies to boost growth, especially as online/mobile sales chip away at big box dominance. The smaller locations also allow retailers like Target and Wal-Mart to penetrate dense, urban markets where real estate is limited and local resistance to big boxes runs high.
In this particular case, Target chose its spot well. The store is located at 4th Street and Mission, near Union Square, a hot bed of retail and pedestrian traffic. Walk a few blocks and you'll find top tier retailers like Macy's, Nordstrom, Coach and Tiffany's.
I kind of wondered how Target managed to convince liberal San Francisco to approve its project.
Again, location matters. Target is building its store on the second floor of the Metreon complex, which has been hurting for tenants ever since Sony pulled out of the building five years ago.
Before Apple conquered retail, there was Sony's "Urban Entertainment Center," a massive real estate development dedicated to all things Sony. in 1999, the company opened such a concept in this location, a four story, 350,000 square building that offered dining, exhibitions, music, retail, and movies.
The concept failed to take off and Sony sold Metreon to mall developer Westfield Properties. Today, only an AMC IMAX movie theater and two restaurants remain at the location.
A shiny mutli-story Apple Store sits just a few blocks away, a reminder of how Apple succeeded where Sony failed. And just because we can't have enough irony in life, the Apple Store was led by Ron Johnson, who used to work at..you guessed it...Target.
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