Target used to be known as a fun shopping destination. But in recent years, shopping at Target has become more of a chore.
Disorganized stores and half-empty shelves have left many Target customers disillusioned with the whole experience.
But the company’s management team is working to change that.
Target is in the midst of a big transformation, and the company is working hard to give shoppers more reasons to visit its stores.
Target’s latest move borrows an idea that has helped make Costco a shopping destination. And if the company can execute on it, it could be a game-changer.
Target borrows a brilliant idea from Costco
Target recently completed a major transformation of its Target SoHo location in New York City, introducing a series of new shopping experiences across its lower level.
Among them is The Snack Bar, a food-focused destination that brings grab-and-go products from emerging brands into a neighborhood-inspired retail setting.
The concept is not an exact replica of Costco’s food court.
Target isn’t introducing a traditional cafeteria where shoppers can sit down for inexpensive pizza or a hot dog. Instead, it’s taking inspiration from the idea that food can be part of the shopping experience rather than simply another category of merchandise.
And that’s a potentially smart move for a retailer that needs to give customers more compelling reasons to walk through its doors.
Target’s new Snack Bar features products from emerging brands, organized into neighborhood-inspired stops designed to evoke New York City streetscapes.
The broader food and beverage area also includes a Seasonal Shopping Bar featuring sweet and savory products from Target’s Favorite Day brand.
Meanwhile, the grocery section has been redesigned as a modern city market that encourages shoppers to discover new products.
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Target should expand its snack bar concept
Costco’s food court reinforces its reputation for value and gives members another reason to visit stores.
It also encourages shoppers to spend more time at the warehouse, potentially increasing opportunities for additional purchases.
The food court has become part of Costco’s identity, rather than simply an additional service. And Target could benefit from applying some of those same principles.
Target doesn’t necessarily need to sell $1.50 hot dogs or compete directly with Costco’s food offerings. Instead, it can use food and beverage experiences to make shopping more entertaining and give customers another reason to explore its stores.
That matters at a time when traditional retailers face competition from online shopping and consumers are increasingly selective about where they spend their money.
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Target’s investment in a more engaging shopping experience also fits with the strategy management outlined during its second-quarter earnings call.
“We want to make Target not just a place to shop, but a destination for busy families,” said CEO Michael Fiddelke.
That distinction is important.
Target has already demonstrated that differentiated merchandise and improved shopping experiences can help generate customer interest. During the second quarter, comparable sales increased 3.8%, while store traffic grew 3.6% year over year.
The SoHo Snack Bar gives Target another opportunity to build on that momentum. And the company should consider expanding the concept to additional locations, particularly stores in busy urban neighborhoods and shopping destinations where grab-and-go food could complement regular shopping trips.
Maurie Backman owns shares of Costco.
