January 9, 2018
We just wrapped up the first holiday season since we shared our plans to invest more than $7 billion to grow and modernize our business—and today, we released an update on our holiday financial results.
So what were the factors that made this a year to remember, and what might the future hold? We asked Target Chairman and CEO Brian Cornell for his take.
How did the holiday season go at Target this year?
Throughout 2017, teams across Target have been focused on executing against our strategy in service to our guests, fueled by a significant investment in our business. Those months and months of hard work ensured we were well-positioned to deliver for our guests this holiday season, and today we reported stronger-than-expected November/December sales. We also anticipate 2017 will be the fourth consecutive year in which digital sales grow more than 25 percent.
To make the holiday season inspiring and easy for our guests, we offered a unique assortment, terrific value all season long and a growing suite of convenient, connected fulfillment options, with stores at the center. In fact, our stores fulfilled more than 70 percent of Target’s digital volume in November and December through Order Pickup and by shipping items directly to guests—that means stores enabled approximately 80 percent of our sales growth in that period.
Importantly, our holiday season performance reflects meaningful investments in our team, increasing wages, staffing and training to deliver elevated service and expertise. I appreciate the entire Target team rallying around our guests, not just during the holiday season but every day of the year.
What were guests shopping for during the holidays?
We saw increased guest traffic in November and December and strength in all five of our core merchandise categories, with a few areas that really stood out. In Home, guests flocked to kitchen items from brands like Threshold, KitchenAid and Keurig, cordless vacuums from Roomba and Dyson and décor from Hearth & Hand with Magnolia, Target’s new, exclusive brand co-designed with Chip and Joanna Gaines that launched in November. And we know many guests found Instant Pot 7-in-1 Pressure Cookers under their tree!
In Electronics, gamers were all about the Nintendo Switch and Apple products like the Watch and iPad continued to be popular. Toys that were tops with guests included L.O.L. Surprise dolls, the LASER X Double Laser Gaming Set, Barbie Dreamhouse and HW Super Ultimate Garage Playset. We saw strength in Beauty and Food & Beverage was positive, driven in part by candy, snacks and adult beverages.
Target introduced some new ways to shop and save this holiday. How did those perform?
New this year, we offered four gifting collections throughout the store curated with the recipient in mind, featuring nearly 1,700 items, most of which were exclusive to Target and under $15. We knew our guests would appreciate this simple solution for finding great gifts, but their positive response far surpassed what we expected.
From a value perspective, we saw traction from the work we’ve done throughout the year to be priced right daily while offering compelling promotions at the right time based on what we know is top of mind for guests. In that spirit, we were pleased with guests’ reaction to our first time offering Weekend Deals, timed for the weekends, when twice as many guests shop than on an average weekday.
And our holiday campaign resonated exceptionally well with guests this year, particularly its emphasis on our broad selection of gifts and low prices.
Now that we’ve turned the calendar to a new year, what are you most looking forward to in 2018?
After making such meaningful progress against our strategy in 2017, we’re focused on continuing to move the needle in 2018 and beyond. I’m especially excited about our recent acquisition of Shipt, which will enable us to rapidly scale new fulfillment options like Drive Up and bring same-day delivery services to guests at approximately half of Target stores in the early part of the year.
We’ll introduce newness through our assortment with more only-at-Target brands. We’ll open 30 small-format stores, including our first small-format store in Dallas and our first store in Santa Barbara. We’ll triple the number of stores we reimagine, with more than 325 remodels planned this year on our way to more than 1,000 stores by 2020. And we’ll continue to invest in our team, because I know they will continue to invest in our guests.
Want to know more? Check out Target’s Holiday 2017 page for a look back at the year’s holiday news and happenings.
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