The hammers are starting to fly at more Target stores across America as the Minneapolis-based retailer pushes toward its multiyear effort to overhaul more than 1,000 locations by the end of 2020.
Out of about 300 stores slated for an end-to-end makeover in the year ahead, 14 of them are in Minnesota. The retailer will spend $50 million to redo nine in the Twin Cities.
Most of the heavy lifting in the state happened in 2018, when the retail chain spent $250 million to update 27 stores in Minneapolis and surrounding suburbs.
While Target Corp. puts considerable effort into making sure customers aren’t frustrated when the peanut butter aisle gets moved, the remodels aim to achieve more than a cosmetic update.
As part of Target’s $7 billion strategy, stores have been structurally redesigned to serve expectations of today’s consumer — who shops online and in stores, and who values convenience, immediacy and free shipping.
“There’s tons of information and a ton of choices,” said Steve Dennis, a former retail executive at Neiman Marcus who now runs his own strategy firm, SageBerry Consulting. “It ups the game for everyone.”
“Some customers remain perfectly happy never setting foot in a store,” he said. “Different segments of the population need different ways to shop. It adds cost and complexity and significant technology investments. But it gives you competitive power compared to Amazon.”
Remodeled stores have reliably provided a sales lift of 2 to 4 percent within six to eight months, Target CEO Brian Cornell said. People shop more often and spend more while there.
But the remodels also service the company’s stores-as-hubs strategy.
Beginning in earnest in 2017, the retailer began turning its backrooms into packaging-and-shipping centers so employees can get merchandise out the door faster and at a lower cost. An entire cadre of Target “pickers” now spend their days plucking items off store shelves so customers can have them delivered directly to their cars via drive-up service or bagged and waiting for them at the pickup counter inside the store.
Using stores to ship out products to nearby homes is 50 percent cheaper than relying on a warehouse distribution center, according to Target. And it’s 90 percent cheaper when customers come pick up the items themselves. Demand for in-store pick up has tripled in the past two years.
Target begins the process of tackling a top-to-bottom overhaul about a year in advance, said Mark Schindele, Target Corp.’s senior vice president of properties.
“It’s a challenging undertaking,” he said. “We bring together teams from store design, store planning, store operations, local leadership. We work through a plan to temporarily move parts of the store around as we work on them.”
No two remodels look exactly alike, Schindele said, as the stores strive to reflect neighborhood characteristics. Urban stores have more concrete and steel, for instance. But certain design rules apply. The updated stores have a more neutral color palette and are lit with circular lights and pendants filled with energy-saving LEDs.
Shelves are lowered so shoppers can see where they are going. Apparel and home-decor items are showcased with accessories and displays that highlight Target’s growing roster of store brands and exclusive national labels. The beauty department gets redesigned to feel like a specialty store, with specially trained staff to answer product questions.
An average-size store costs about $5 million to update, while a SuperTarget costs about double.
The messy, noisy work happens after-hours. Employees spend the first parts of their shifts reorienting themselves after the overnight changes, when an entire aisle might have been relocated or the customer-service desk moved from one side of the store to the other.
Tiffany Hartman, the store manager in Maple Grove, said she added staff during her store’s remodel last year, ensuring that a force of “guest service ambassadors” could focus on helping shoppers during five months of construction.
Hartman said she staffed up during weekends and other peak times, and employees were laser focused on quickly stocking the shelves after a night of major changes.
“I always told my team it was like tying a bow on the process,” she said.
Schindele said the idea of having guest ambassadors began to take root in the middle of 2018, as Target was close to completing a slate of 300 store remodels, the most it has undertaken at one time in the company’s history.
This year the concept is a key strategy as the retailer embarks on another 300 or so remodels.
“You can put up all the signing you want,” Schindele said. “We have it in our wayfinding apps and we have maps. But there’s nothing that can replace a local team member that knows their store really well — and often knows the guests really well.”
The pace of remodels picks up during spring and summer to give stores time to settle into the changes before back-to-school shopping and the holidays.
This year, the retailer is making sizable remodel investments in Los Angeles, New York, Chicago, Denver and Houston, a spokeswoman said.
Last year, eight of the Target remodels included liquor stores. The company said one of the nine in this year’s group will get a liquor store, but declined to name the location.