This case presents a scenario with a hypothetical and fictional challenge.
By participating in this activity/competition/etc. you are confirming understanding that this
case study topic is a hypothetical situation that may or may not be part of Target’s previous,
current or future business endeavors. Your personal ideas, or those of your team are used
for educational and developmental purposes surrounding this University
project/activity. You are also confirming understanding that any similarities in Target’s
future business practices nationwide are purely coincidental.
Making Room for Flexible Fulfillment.
Situation Analysis.
The evolution of a consistent experience across shopping channels continues to impact the manner
in which retailers approach their business. No longer is a great looking, well stocked, and visually
exciting store with an exceptional, guest focused team the only ingredient for success. Today, the
consumer wants all of that PLUS a personally interactive experience that seamlessly integrates
physical and digital elements. To support this strategy, flexible fulfillment is critical, so Target’s
supply chain is evolving to deliver however guests choose. Flexible fulfillment is about expanding
the options guests have to buy and receive product. This includes Store Pickup, Ship from Store
and Ship to Store. These allow for faster and more cost-effective fulfillment – positively impacting
the guest experience as well as Target’s bottom line.
Target is continually building a more integrated, personal and interactive experience for guests who
want to find the best value, shop, and pay at their convenience. What is the optimal solution to
implement the most cost-effective methods of flexible fulfillment programs and how does the
transformation take place?
The Company.
Target Corporation (NYSE:TGT) is an upscale discount retailer that provides high-quality, on-trend
merchandise at attractive prices in clean, spacious and guest-friendly stores. With total 2017 sales
of $71.9 billion, Target has over 1,800 stores and 39 distribution centers in the United States, and
over 320,000 team members worldwide. Its online business can be found at www.target.com.
case study 2
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The first Target store opened in 1962 in the Minneapolis suburb of Roseville with a focus on
convenient shopping at competitive discount prices. Target currently is the second largest general
merchandise retailer in America, with Target.com consistently ranked as one of the most-visited
retail websites. The company continues to deliver on its brand promise of “Expect More. Pay Less.”
Since 1946, established with the Dayton Company, Target has given five percent of its profit to
communities, which today equals millions of dollars a week. Corporate Responsibility magazine has
named Target on its “100 Best Corporate Citizens List.”
Target is recognized as a leader in innovation across the retail industry. From pioneering the
concept of designer partnerships to consistently being best in class in store design, Target remains
focused on not only meeting, but exceeding its guests’ needs. To remain relevant to its guests over
time, Target continually reinvents its stores, including layout, presentation and merchandise
assortment, to create an engaging shopping experience and fulfill the Expect More. Pay Less.
brand promise.
The Guest [Consumer].
Target’s core guests are incredibly diverse, and no one segmentation can describe them fully. We
learn a lot about them from spending time getting to know them as people, not data points. Typical
guests have kids in the household and lots of demands on their time. Guests actively shop in-store
and online and use technology while shopping, with one hand on their cart and one hand on their
smartphone. They enjoy shopping and want to tell their friends, remaining engaged with social
media while shopping and sharing their feedback and experiences online. They are often
influenced by others and share their findings to influence others.
Today’s consumers demand great value, which is much more than price – value is a combination of
price + assortment + experience, and it’s a unique equation for each person. It’s feeling like you
gave more than you got. Consumers have a wide range of retail choices and are willing to hunt to
take advantage of the best value. But, with so many demands on their time, consumers are also
looking for convenience. Retailers have answered this trend by partnering with mobile payment
applications and shortening the number of steps required from browse to checkout, both digitally
and physically. In terms of obtaining the purchased product, free shipping and in-store pick up are
becoming increasingly important for online transactions, as well as length of time until product is
received.
For Target, the guest is at the center of everything. The company is continually developing new
ways to serve the guest anytime, anywhere. Target today remains committed to providing a onestop
shopping experience for guests by delivering differentiated merchandise and outstanding value
with its Expect More. Pay Less® brand promise.
The Competitive Landscape.
Consumers expect a seamless shopping experience where they can choose the most convenient
way to order, receive and return their purchases, and retailers are responding in different ways.
Other players in the market have their own methods of driving partnerships and sales that directly
affect the ways in which their supply chains are leveraged – consider Walmart, Amazon and Home
Depot.
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The Challenge Ahead.
How could Target enhance its existing flexible fulfillment strategies to better serve guests,
and do it cost effectively? What practices already exist in the industry that Target can
implement? What new processes can be added to improve how Target implements its
flexible fulfillment options?
Things to consider as you create the solution:
Strategy Planning: How long would it take to implement your strategy? Include specific timing on
developing the strategy and executing the detailed plans. What teams would need to be consulted
to ensure your timing is met? Also consider how teams would be trained on the process.
Technology: Is there existing technology that could be leveraged to make improvements and/or
enhancements within Target’s flexible fulfillment model? Would something new need to be
created?
Return on Investment: Does your project focus on a positive return on investment? What aspects
of the solution will make it profitable? How will you measure the impact it has on guest behavior?
How will you measure success (cost, performance, etc.…)?
Space: What physical changes have to occur in the store to support the solution? How would these
changes in physical space impact the guest or team members? Is there a cost associated?
Assortment: What assortment will you use to meet guest demand for flexible fulfillment? Are there
products that should not be included in this program? Why exclude these items?
Differentiation: How can Target differentiate itself during peak volume times, such as Black Friday
and Cyber Monday? How does Target make the guest aware of the changes in fulfillment?
Contingency Planning: Consider what contingency plans would need to be developed for a
rollout of a strategy. How can Target keep the process fluid so it can adapt in retail as the
landscape changes?
Frequently Asked Questions.
Q: How many stores does Target have? Approximately 1800
Q: How many distribution centers does Target have? 39
Q: How quickly does Target delivery product to guests today? We are working towards a 2-day
delivery promise. Through a number of existing solutions (Shipt, Grand Junction) we are
able to offer same-day delivery in some cases.
Q: Does Target currently offer free shipping? Yes, for REDcard holders.
Interested in learning about what it’s like to work at Target? Read the latest Team Member stories
at http://pulse.target.com or visit www.Target.com/careers to view current openings.