Target Gains from Remodels

Target attributed a successful third-quarter financial performance to its store remodeling and new REDcard reward initiatives. (See "Target Scores with REDcard Revamp" in Related Articles.)The high-profile remodel program encompasses an expanded grocery layout known as "P-Fresh" (see "Target Rolling Out 'P-Fresh' Format"), along with updated departments for:beauty (see "Target Takes a New Look at Beauty"),consumer electronics, andhome goods and footwear.In the third quarter of fiscal 2010 (ended Oct. 30), Target upgraded roughly 100 stores, raising the total number of remodels completed this year to 341. The chain now has 462 discount stores with expanded food departments. (The 251 Super Target stores in the chain have a similar fresh food assortment.)"Once we re-grand-open [a] store, we see approximately 6.0% lift throughout the total store and, based on what prior food print existed before the remodel, we see anywhere from a 40% to a 60% increase on the food side," chief financial officer Doug Scovanner explained during a recent earnings call.The retailer has undertaken an aggressive national marketing campaign for the enhanced food offering that includes TV and radio spots, circular features, direct-mail drops, outdoor ads, vehicle wraps and special events -- all aimed at getting consumers to associate the Target brand with fresh food.In Chicagoland, for example, where more than 50 stores have been remodeled, Giada De Laurentiis headlined an October event on Michigan Avenue. (Target launched a collection of kitchen utensils in conjunction with De Laurentis earlier this year.) The celebrity chef gave cooking demonstrations and handing out autographed copies of her latest book, Giada at Home (Random House), in front of a Target-branded truck. Attendees also received bags of groceries and recipes utilizing the items in the bag.Meanwhile, billboards in the area place Target's bold red font against a white background, with fruits and vegetables scattered throughout. Circulars have presented multiple full-page features.An internal team at Target develops the TV spots, while three Minneapolis neighbors assist with other parts of the campaign: Olson handles radio and outdoor; Little & Company takes care of strategic planning, and also created the initial trial campaign in the Philadelphia market; Knock Inc. oversees in-store marketing. (Source: The New York Times.)Target is publicizing other elements of the remodel program to a lesser degree, with vehicles such as newspaper inserts touting the updated beauty departments, for example.The chain will continue to focus on remodels in fiscal 2011, with 380 more stores set for revamps, chief executive officer Gregg Steinhafel said during the call.On the flip side, Target has been downsizing its lawn and garden merchandising, and in September closed its 262 remaining open-air garden centers (located mainly in Florida, Nevada, Arizona and California), according to reports.

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