Houston-area store to debut Target revamp
Local shoppers will be the first to try out the chain’s revamped approach
The retailer plans an ambitious redesign aimed at helping people who need to dash in for milk to get out quickly while encouraging those who want to stay and shop.
LOCAL shoppers will be the first to test a completely redesigned Target store that is part of a major turnaround effort that involves remodeling hundreds of stores nationwide.
The Houston-area store, slated to open this fall near Richmond, will house two distinct shopping areas, each with a separate entrance. One side will be organized somewhat like a department store, while the other will offer quick services and grab-and-go items such as groceries and alcohol.
The so-called “inspiration” side will have a curved center aisle, branded displays and departments featuring similar items such as jewelry, accessories and beauty. The space will have brighter lighting and an airier layout, as well as typical Target features such as a CVS pharmacy and a Starbucks.
On the other side of the store, the “ease” entrance will open to a space designed to get shoppers in and out quickly. There, customers can pull in for curbside delivery, visit customer service, grab groceries and buy beer
and wine in a separate shop within the store.
Mark Schindele, Target’s senior vice president of property, called the layout the “most ambitious new store design” in company history. It’s expected to open Oct. 18 outside the Grand Parkway at Harlem Road and Bellfort Boulevard, a location the company chose in part for its proximity to high-growth suburban areas.
The store will anchor the Market Center at Aliana, a shopping center under development by Houston commercial real estate firm Property Commerce. Jay Williams, the firm’s president, said he hopes the new design will draw customers from a wider radius than a standard Target.
“We are excited to have it in our shopping center,” he said. “I would think that people might come from a longer way because it’s new, it’s different.”
The prototype is one of 600 Target plans to roll out by the end of 2019 as part of an aggressive strategy to boost sales after a disappointing holiday season. The company plans to invest $7 billion in its stores, supply chain and e-commerce operations during the next three years in an effort to better compete against its online and brick-and-mortar competitors.
Already, Wal-Mart has outfitted stores in the Houston area and elsewhere with new technology and poured billions of dollars into location remodels and employee retraining programs. Amazon, which reported 55 percent year-over-year profit growth in the fourth quarter alone, has continued to encroach on brickand-mortar sales with lower prices and faster delivery.
Target first introduced some aspects of its new store prototype in Los Angeles in 2015, but about half of the new features planned for the Richmondarea location have yet to be tested. Schindele said the company will consider feedback from that location as it alters stores in other markets.
“It will influence all of our future remodels,” he said.
Forty other stores will receive some updates this year. The company expects sales to increase by at least 2 percent in each revamped location.
Part of the company’s remodeling investment involves redesigning backroom capabilities and upgrading in-store technology to better integrate its physical and online operations. Last year, online orders accounted for 14 percent of Target’s sales, twice the amount it recorded in 2014.
To cut down on costs and transit time from warehouses, the company is expanding the number of stores that double as distribution centers that ship goods to nearby locations. More than 1,000 of the company’s 1,800 locations now fulfill e-commerce orders.
The company is also working to equip its sales associates with handheld devices capable of ordering items from other locations or its website, Schindele said. And it plans to enhance the capabilities of its Cartwheel mobile app to encourage crossover between physical and online shopping in its redesigned stores.
Target doesn’t anticipate the turnaround strategy to boost performance in the near term. It expects samestore sales to fall again this year as it invests heavily in reducing prices and promoting online sales.
Charlie O’Shea, lead retail analyst for Moody’s Investors Service, wrote late last month that Target’s online sales grew 34 percent in the fourth quarter alone, validating its decision to invest more in its ecommerce operations. He called Target’s planned investments “sensible longterm strategic moves” to become more competitive in a changing retail environment, even if sacrifices short-term profits.