Target’s new omni-channel strategy, which includes mobile app improvements, social media partnerships, and better shipping options, will improve the customer experience across all channels and increase revenues.
At Retail Category Consultants, we are strong believers in using omni-channel retailing to remain competitive and broaden marketing awareness, but like all new strategies, the devil is in the details and your execution is important.
Let’s examine Target’s omni-channel plans to understand what consumers can expect.
Increased Investment In Mobile Technology
2014 marks the year of retail mobile innovation, from the release of Apple’s location-sensing iBeacon to Google’s Project Tango technology, a forthcoming augmented reality smartphone device. As mobile technologies continue to drive foot and online traffic to retail stores, Target’s investment in its app makes business sense. Target plans on improving the app’s store navigation, shopping organization and personalization, and there’s even talk about adding an augmented reality feature—where customers can find, in real-time, products that meet their criteria as they walk down an aisle—into the mix.
However, given Target’s history with their coupon Cartwheel app, which was a great idea but caused much frustration through functional curveballs (log-in problems, scanning issues), we think Target must ensure that their execution is top-notch in order to keep customers happy. As not every customer is aware of augmented reality, Target’s app must be easy to use, and their employees should be trained to explain and promote the app to customers.
Opening Up Ship-From-Store Delivery Options
Target plans on unveiling a ship-from-store delivery option for customers that want same day delivery. As more retailers compete to satisfy customer demands for quick and efficient delivery, ship-from-store could significantly decrease Target’s labour and warehouse costs while increasing sales online and in-store. Best Buy’s ship-from-store service has enabled them to turnaround their supply chain operations to deliver faster than e-commerce giant Amazon. If done right, a ship-from-store infrastructure could be a huge asset to Target.
As a retail chain with stores numbering in the thousands, Target’s IT must be tested and trialed before rolling out across the chosen fulfillment locations. Management and store employees must be trained on picking and packing orders from their backroom to meet online demand, and analytics should be in place not just to direct orders to the right store location with the right product in the right colour or size, but also to help Target predict peak periods and determine whether more stores or infrastructure is needed to meet demand. Target will also need to design their in-store processes to ensure that customers coming to store to collect their purchases have a pain free experience.
More Social Media Discounts For Cross-Channel Customers
Target has already successfully tapped into social media channels like Facebook and Pinterest to encourage customers to shop in-store, and they aren’t stopping anytime soon. Target’s Cartwheel app allows Facebook users to receive a discount barcode after selecting offers on the Cartwheel website to redeem in-store, and there are plans to expand the app’s offerings. Target has also driven substantial traffic to their stores through Pinterest’s Rich Pins, which allows them to showcase product information such as price and availability, before directing customers to the Target website. Social media has allowed Target to drum up significant customer engagement even without the kind of e-commerce investment made by their competitors.
To continue to reap these social media rewards, Target must ensure that their marketing messages, old and new, are consistent across channels. Shoppers that purchase an item through ship-from-store should also be encouraged, through an incentive or discount, to share their experience of convenience on social media the same way Target customers currently share the products they love with their Facebook friends. It’s no longer enough for retailers to simply market their products online. To stand out from the online noise, you have to encourage and incent your customers to market for you.
What Can We Expect From Target?
Target is recovering after a turbulent last quarter in 2013. With a new management team in place who are working to build the omni-channel experience through mobile, convenience, and social media investments, we hope that Target is prepared to handle the challenges of omni-channel on their journey to a stellar shopping experience. However, before they can be successful, they will have to regain the trust of consumers.