CEO wants to bring Target to you, wherever you want it

Target CEO Brian Cornell is leading the transformation of a megaretailer that had lost its way and cachet, not to mention its “cheap chic.”

Cornell, 56, became CEO in August 2014 after more than 30 years at retail and consumer product companies, including heading up PepsiCo’s largest division, Sam’s Club and Michaels Stores.

As the first CEO recruited from outside the company, Cornell inherited some reputational problems at Target, including damage caused in 2013 when hackers breached the retailer and stole information on some 70 million customers, including 40 million credit and debit card numbers. Then in January, he made the tough call to abandon Target’s money-losing move into Canada, closing all 133 stores there and cutting 17,000 workers.

But Minneapolis-based Target seems to be regaining favor with customers as it strengthens flagship product categories: style, baby, kids and wellness. For the third quarter, its sales rose a respectable 1.9 percent at existing stores, where traffic increased for the fourth consecutive quarter, leading the company to raise its full-year 2015 profit outlook.

Heading into the holiday shopping season, Cornell is seeing mixed results from competitors. Top foe Wal-Mart saw robust sales in the third quarter, as did Home Depot and TJX (T.J. Maxx and Marshalls), while others, like Nordstrom and Macy’s, stumbled into the biggest buying season.

More broadly, Cornell is dealing with a shifting landscape as traditional retailers try to reconcile their online and offline shopping worlds to compete with Amazon and other online retailers that don’t have all their costs.

During a recent walk around a new flexible-format store in Chicago, in this case a small urban test store downtown, Cornell talked about Target’s strategy and his philosophy on leadership.

Q: More generally, where do you see Target fitting in the retail landscape, with so many departments, from clothing to groceries?

A: We think we still play a very important role with the American consumers as an iconic brand. We’re clearly modernizing our strategies. Years ago, we didn’t use our stores as pickup locations (for online orders). More and more, we’re using our stores to make sure we can deliver that last mile and deliver it in a short period of time.

Q: To compete with online retailers? Amazon?

A: Absolutely. I think we have a huge advantage over many of those traditional online retailers in that we have stores. Everywhere we go, we see traditional online retailers; their idea of innovation is opening up a store. We think that’s a big advantage, the fact that we have a store base.

Q: Is in-store pickup part of your effort to address the industry buzzword “omnichannel,” allowing customers to shop seamlessly online and offline?

A: As we think about omnichannel, it’s about fulfilling this on-demand shopping experience.

We recognize that most of our guests today shop in stores, but we also know, particularly as the U.S. consumer moves back into urban centers — it’s happening in Chicago and around the U.S. — we’re going to need to have flexible formats and give guests a chance to shop online.

But as opposed to having a package delivered to your front door when you’re at work (and missing the delivery), we offer the convenience of ordering online and coming to one of our 1,800 conveniently located stores to pick it up when they want to — using our stores as flexible fulfillment centers.

That’s how we see ourselves competing in this omnichannel, on-demand environment. We want to offer that convenience, make it really easy for our guests to shop the brand anytime, anywhere they want.

Q: With apparel, in particular, people used to boast that they got great clothing buys at Target, pronouncing it with a French flair, “Tarjay.” Not so much anymore. Is that something you have to get back to?

A: That’s certainly our goal. I think over the last 15 months, the team, particularly our product development design group, has made some big strides in getting that back. I think it starts with understanding trends, really taking the time to understand the consumer.

That is something we’ve clearly recommitted to, making sure we’re bringing that quality and innovation to those style categories, apparel, home and beauty, so that we elevate that “Tarjay” experience.

Q: What is the best mistake you ever made, and what did you learn from it?

A: I’ve had several failures along the way. We talked about signature categories (style, baby, kids and wellness), and I’ve been through that initiative a couple of times. And one of the first times I brought it forward, I spent a lot of time mapping it out, rolled it out across the organization. A couple of weeks later, I brought groups together and said, “All right, give me your feedback. How are you applying this? Tell me what you learned.”

And a majority of them, after a long, quiet period, raised their hand and said, “Brian, this sounds really good, and it sounds like absolutely the right thing for us to do, but we have no idea what you’re talking about.

“It’s brand new to us. The terminology isn’t something we’re used to. We really need a different approach to understand how we apply this.”

I learned over the years that communication and how we communicate to the team, being really clear, really transparent, is critically important.

This story was originally published November 26, 2015 at 3:47 PM with the headline "CEO wants to bring Target to you, wherever you want it."