Target Expands CE Pilot

Part of company-wide revitalization effort under CEO Cornell
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Target has been retooling its CE departments in select stores, and is about to roll the concept out to hundreds more.

Minneapolis — Target has been retooling its CE departments in select stores, and is about to roll the concept out to hundreds more.

The revamp reportedly includes live tablet and smartphone displays, and chairs that allow customers to sit as they test-drive the products and peruse Target online.

Chief merchandising and supply chain officer Kathee Tesija described the pilot departments as an “enhanced entertainment and electronics experience” that is currently in 42 stores. On an earnings call, she said the discount chain plans to extend the concept to another 275 stores this year.

Last June, the hometown Minneapolis Star Tribune reported on the CE upgrade after visiting a test store in the city’s Northeast Quarry section. In addition to the live product displays, the departments’ sales associates receive stepped up training to better explain and sell the tech assortment, the newspaper reported.

Tesija is expected to provide more details on the CE experiment and other in-store initiatives next week during a presentation to the financial community in New York.

Target is the country’s fifth-largest electronics retailer according to TWICE’s Top 100 CE Retailers Reports, a position it has held for at least the last 10 years as younger upstarts like Amazon.com and Apple Stores have overtaken it.

Recently installed chairman/CEO Brian Cornell is looking to change that, along with sluggish across-the-board sales, by remerchandising key product categories, developing new store formats and stepping up e- and m-commerce investments.

Indeed, earlier this week the company threw down the digital gauntlet by cutting in half the minimum for free delivery of online orders, from $50 to $25, undercutting both Amazon and Walmart.

Cornell, the former chief executive of PepsiCo Americas Foods and Sam’s Club, also decided to pull the plug on the company’s money-draining Canadian operations, which resulted in a $5.1 billion pre-tax hit in its fiscal fourth quarter.

Nonetheless, with Canada and the company’s well-publicized Holiday 2013 data breach now behind it, Target appears ready to turn a corner. Despite a $2.6 billion Q4 loss due to the North-of-the-border shutdown, compared to a prior-year profit of $520 million, sales rose 4.1 percent and comps increased 3.8 percent for the three months ended Jan. 31, representing the chain’s best showing in nearly three years.

“We’re seeing early momentum in our efforts to transform Target,” Cornell said in a statement. “Our team is entering the new fiscal year with a singular focus on continuing to differentiate our merchandise assortment and shopping experience, while controlling costs by reducing complexity and simplifying the way we work.”

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