Target success (corporation, finance, stock, writing)

[krsheely]

I would like to know if informatin i've gained through observation, first hand comments from people, news, and other sources of information is accurate.

Here goes

as far as retail goes wal mart is the big box brand king, they have everything for cheap and everyone knows this. For a long while it seemed that wal mart was the only big box store to be able to press its will on all and maintan a high success rate with a company model based of efficency and low prices.
What i have noticed lately is that target has come into favor lately with middle class people, or even some upper middle class. Basically what i would describe as the general suburban consumer has offered a slightly different consumer option, good to decent prices, good selection but a slightly higher level of shopping conveience and ease.

1. Is this true, are my initial thoughts correct.
2. Has target made successful in roads against wal mart competitively or are they going for a different market share.
3. Is this a lasting trend that can keep target growing at a consistent pace.

[chet everett]

Here is the 10 year chart.

Target Corporation - Google Finance

Which would you rather have?

[krsheely]

From 2002 about the same, im not going to much into stock prices, im talking about the actual busisness model, im curious to know if within the last few years they have opted to try and go for a share or portion of a specifically labled market. And if so by doing this have or will the be expected to make in roads on wal marts buy bulk success. Basically my question is :is target positioning themselves as the middle class wal mart. How long have they been attempting this or are they doing this or do they see the writing on the wall that middle class people are becoming more in tuned to lower prices but still want the ease and convenince provided by target.

[Naptowner]

I think Target has been 'in favor' with middle class people for quite some time. I know I've been shopping at Target since college, which was before Wal-Mart started building supercenters all over the place. During the explosion of Wal-Marts in the 90s I think Target tried to position itself as the slightly upscale discount store, because it knew it wasn't going to beat Wal-Mart on price or have as much sway with suppliers. Target trailed Wal-Mart by several years in building superstores that also sold groceries, but seems to be backing off this somewhat. The last two stores I can think of that Target has built in Indy, the one in Nora and at Glendale, have some food but no produce or deli - this may be due to size constraints, but something tells me Target could have easily acquired more land to build in either of those locations. To me, cutting out the fresh (i.e., most perishable) food was a way for Target to cut down overhead in a product segment where they weren't going to be all that competitive anyway.

So anyway, while I don't think it's a recent attempt to position itself as the middle-class Wal-Mart, and I don't believe Target has been able to follow in WM's footsteps by getting suppliers to conform to its wishes, I agree Target is aiming for a slightly more upscale market segment than Wal-Mart.

[Randomdude]

Originally Posted by krsheely

I would like to know if informatin i've gained through observation, first hand comments from people, news, and other sources of information is accurate.

Here goes

as far as retail goes wal mart is the big box brand king, they have everything for cheap and everyone knows this. For a long while it seemed that wal mart was the only big box store to be able to press its will on all and maintan a high success rate with a company model based of efficency and low prices.
What i have noticed lately is that target has come into favor lately with middle class people, or even some upper middle class. Basically what i would describe as the general suburban consumer has offered a slightly different consumer option, good to decent prices, good selection but a slightly higher level of shopping conveience and ease.

1. Is this true, are my initial thoughts correct.
2. Has target made successful in roads against wal mart competitively or are they going for a different market share.
3. Is this a lasting trend that can keep target growing at a consistent pace.

I actually did a huge paper in a Finance class on Target years ago.

This is actually a pretty new development. You have to remember, Target wasnt even in half the states by the late 80's. Target didnt really have to consider how it was going to go toe to toe with the behemoth of Walmart which has toppled so many giants and mom and pops alike, until the early to mid 90's, when aggressive expansion by both companies often had them in direct conflict over the same population base in hundreds of markets.

Target figured out pretty early, its not going to win the price battle. They can be somewhat competitive on a few things, like some electronics, but overall, Walmart had control of the value minded shopper.

So how can you survive as a discount retail department store, when you are going to be outdiscounted? Well, you try to slice the demographic, and seperate yourself from Walmart. If you are Target, you have to make your shoppers come there because you are Target, not as another big box retailer.

Target really set out to start doing this in the late 1990's and forward. They cleaned up their stores, widened the isles, attempted to bump up customer service, focused on shortening line waits, installed better lighting, and started bringing in "name" designers, like Mossimo in 2000, which was a huge deal at the time for Target, since "name brand" clothing and household wares really werent something you found in discount stores. Since then, Walmart and Kmart have both tried to copy.

I think Target will be fine as long as they can continue to successfully stratify the middle to lower classes. People that only shop at Target feel like they are better then people who shop at Walmart, even though both stores abuse their employees equally, sell almost exclusively Chinese made crap, and draw from the same household income demographics. Walmart also gets lampooned for dozens of things that create bad publicity, while Target does the same things, and ducks the heat. People arent making nationally distributed films trashing Target.

Its about perception, and as long as Target maintains that, and Walmart continues to not really give a damn (dirty stores, long lines, carts all over the lot), there will definatley be room for them in Walmarts shadow.

[Des-Lab]

Well FWIW, in Orange, CA, there is a Target and a Wal Mart on Tustin Ave, on opposite sides of the street, maybe one block apart.

The Target has a lot more blonde kids. If you get my drift.

-nuff said. So yes. Both stores can coexist quite well.

[Randomdude]

Originally Posted by Des-Lab

Well FWIW, in Orange, CA, there is a Target and a Wal Mart on Tustin Ave, on opposite sides of the street, maybe one block apart.

The Target has a lot more blonde kids. If you get my drift.

-nuff said. So yes. Both stores can coexist quite well.

You will often find Target right by Walmart. That is because they are competing for the exact same demographic (although Target has stratified this demographic, they still live in the same neighborhoods as their "lower class" Walmart shopping neighbors), and therefore try to center themselves in the same population and convienence areas.

Zoning may have some play on this in certain areas, but its largely because they are following the same principle (there is actually a name for this but it slips my mind). There is even special software now that stores use to identify the best spots to pop their stores based on demographic information. Likely, Walmart and Target will continuously identify nearly identical spots for the "best location" and will put their stores up right near each other.

[user_id]

Originally Posted by Randomdude

You will often find Target right by Walmart. That is because they are competing for the exact same demographic (although Target has stratified this demographic, they still live in the same neighborhoods as their "lower class" Walmart shopping neighbors), and therefore try to center themselves in the same population and convienence areas.

No, the demographics are rather different and anybody that walked into the two stores would notice right away. The shoppers at Wal-mart are more so poor to lower middle-class and at least in California there are obvious racial differences (hence the posters comment about blond kids). Where as Target is more so middle-class to upper middle-class. These people are not living in the same neighborhoods.

Its really difficult to try to market being "cheap" and try to get middle-class and upper middle-class shoppers. Also, the selection at Wal-mart is much more geared towards the lower middle class (especially the clothes).

Anyhow, I've been to the stores the other poster mentioned. I'm betting you've never even spent much time in California, let alone been in those stores. Also, typically Wal-mart and Target are right across the street from each other, in the case mentioned it works well because the stores demographics are so different. If the demographics were "the same" it would not work well.

[Niners fan]

I swore off going to Wal-Mart about 12 years ago because I was tired of waiting 10 minutes in line to check out at one of three open registers while 25 others were closed. We shopped at Target instead.

But over the last couple of years I have found myself in Wal-Mart for one reason or another and have noticed that the customer service has also made a huge improvement. I don't dread going there any more and the lines are pretty comparable to Target now.

As a side note, I also have noticed the racial differences that I observed in Wal-Marts in California tends to hold true in Idaho even though the percentage of minorities is far less.

[debtmonger]

Wal-Mart drives me crazy. It's like going in a zoo. I don't like to even go in the place, but sometimes I have to force myself if they have a really good deal on something. Just driving in their parking lot drives me crazy. The only good time to shop at Wal-Mart is really early in the morning, when everyone else is sleeping.