In Boston, Target CEO speaks about adapting to ecommerce
Things you should know about Target Corp.: 90 percent of its holiday sales occurred in physical stores, not online, and it is focusing on urban customers with smaller stores in city neighborhoods.
This and other moves are part of the Minneapolis-based chain’s efforts to adapt to ecommerce and changing technologies that are upending traditional retail models, Target chief executive Brian Cornell said Wednesday.
Cornell, speaking to the Boston College Chief Executives Club, said in-store traffic grew in Target’s 1,800 stores. But the company’s typical customer is no longer a suburban mom driving a minivan. Instead, he described her as a city dweller, likely Hispanic, with a cell phone in hand, adding that mobile access to merchandise is an expectation, he said.
“Stores still matter,” he said, but Target “has to do things differently.”
Target also must capitalize on the growing upscale populations within major urban centers by adding location, he said. Boston, New York, Philadelphia, Washington, Chicago and San Francisco are priority areas for an expansion.
He said it’s likely any new stores that Target opens within Route 128 would be smaller-format stores, such as ones that are expected to open in the coming months in Cambridge’s Central Square and on Commonwealth Avenue near Boston University.
Some of the new urban stores could be about 15,000 or 20,000 square feet in size, while others could be 40,000 or 50,000 square feet, depending on the neighborhood and the specific property. Opening in metro areas, such as Greater Boston can be tricky, he said, because of the density of buildings and a lack of 10-acre parcels that can accommodate full-size stores.
He called a new Target that opened in the Fenway area in July “one of the crown jewels in our portfolio.”
The store is four floors spanning 160,000 square feet, bigger than the stores proposed for the region. The only other Target in Boston is 117,000 square feet in a Dorchester shopping plaza.
In the Fenway store, customers can take giant red shopping carts on elevators or special escalators that can transport them between floors. The store also sells alcohol and has its own department selling local sports team clothing and memorabilia and is situated near public transportation.
Cyber security also remains a major concern for Target, the victim of one the nation’s biggest data thefts in 2013. “I consider this to be one of the biggest threats to commerce in America,” Cornell said.
Cornell became chief executive of the Minneapolis-based chain in 2014. The year before, hackers stole as many as 40 million debit and credit card customer account numbers.
Cornell said if a breach occurs, it is now identified and contained immediately. He noted that there’s a big, well-funded market for stolen credit and debit card data online.
“We’ve got to stop that,” he said, and “have to have a strong partnership in Washington and ways to defend ourselves from the bad guys.”