retail

Target's New Campaign Hypes Convenience, Value

Amid slumping sales, Target says it is counting on new marketing — themed “TargetRun And Done,” which stresses both value and convenience — to bring shoppers back for quick fill-in trips.

Executives for the Minneapolis-based retailer detailed hopes for the new campaign in a conference call for its latest earnings. While the retailer’s profits rose 10.4% to $677 million, from $614 million in the same period a year ago, beating analyst expectations, comparable-store sales results dipped 1.3%, and total sales declined 1.1% to $16 billion. It says the decreases are due both to less traffic and smaller basket size.

The new ads celebrate “everyday, real-life moments — whether it’s guests running out of milk or throwing together a last-minute BBQ,” says Rick Gomez, EVP/CMO, in its release. “It’s all about having some fun with our iconic red Target baskets while making sure our guests know that with one quick Target run, they’ll find everyday low prices on all their everyday essentials.”

In a conference call for investors, CEO Brian Cornell says the new effort is an attempt to shore up even steeper declines in both its essentials and food and beverage businesses. “In the second quarter and beyond, we will continue to invest in our regular prices and reinforce our everyday positioning,” he says, according to the Seeking Alpha transcript of the call. “An important part of that work is to adjust our promotional posture on those items and categories so they better support that everyday message.”

He also says the company is rethinking its approach to loyalty, looking for better ways to leverage its Red Card.

His comments arrive just as rival Wal-Mart Corp. is reporting solid gains based on its aggressive re-commitment to that “everyday low price” positioning. Total revenues climbed 1.4% to $117.5 billion, with same-store results also advancing 1.4% in the U.S., powered by increasing foot traffic at its stores. And its e-commerce results grew by 63%.

“A sharper focus on price is cutting through, especially on grocery,” writes Neil Saunders, managing director of GlobalData Retail, in his reaction to the Bentonville, Arkansas-based company’s quarterly earnings report. “From our data, Walmart is winning back some — but by no means all — customers from dollar stores. It is also picking up some from mainstream grocers. The response to Walmart flexing its price muscles has been good, and we expect further small gains over the rest of this year.”

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