Express Dual Anniversary Thoughts
Late last July, our two top big box discounters, announced the selection of their newest CEOs. The respective announcements occurred exactly one week apart, as the month came to an end. The actual assumptions of office came about three days apart as mid-August approached. Both Walmart and Target, which had been facing considerable challenges, acted swiftly and almost simultaneously to right their projected courses.
First Wal-Mart brought in Greg Foran from his three year tenure heading up Walmart China, his first position with the retailer. Three days later Brian Cornell, a total outsider, began his tenure to lead Target.
Cornell’s challenges centered on getting Target out of its rut, which initially had been brought on by the customer shock emerging from its infamous data breach. He also had to implement rapid changes to Target’s relatively newly opened Canadian operations, in hopes of literally saving the concept of Target in Canada. These two major issues had brought observers to the realization that there were major morale problems at Target headquarters, as stories of discontent began to leak to the press.
Walmart’s traditional stores seemed to be reaching saturation, in terms of the number of remaining markets available which are likely able to support supercenters, as the number of traditional Walmart stores continue to decline annually.
To these challenges, Cornell quickly made executive changes to his tech sector, essentially assigning responsibility, blame and dismissal to those execs thought to have been in positions to have prevented and/or remedied the breach. He then invested in Canadian operations, hoping to achieve an exciting end-of-year holiday season.
Cornell saw the possibility of a successful end-of-year as something which could give both the company and its Canadian clientele a basis for hope to promote a future. When Canadian operations actuality failed to meet planned expectations, Target Canada was quickly and suddenly shuddered.
After taking command, Walmart’s new administration continued to promote its ‘small stores’ concepts. Long envying typical dollar store formats for their compact ease of shopping, Walmart saw these stores as competing with the wildly successful dollar store format, though they generally lacked a true ‘neighborhood’ identity and accessibility. However just months after Foran’s induction as CEO, the retailer announced it was converting its 21 Walmart Express locations to its Neighborhood Market concept, with no plans for further Express openings.
The Express concept came in at about one third the size of the Neighborhood prototype. Oddly, while the Express format was a large-prototype dollar concept wannabee, the Neighborhood Market prototype is essentially a traditional supermarket, a la Walmart. How 15,000 sq. ft. Express units could adequately operate as a traditional supermarket remains questionable. That a traditionally sized supermarket, even one termed Neighborhood Market, could be deemed a ‘small store’ also seems questionable.
At the same time, Target actively promoted its two newest and smaller concepts. First there was CityTarget, which began operations in 2012. This is an urban version of traditional target stores which attempt to compensate for the costly challenges of major-market urban retailing life. Coming in at around 80,0000 -100,000 sq. ft., these stores are designed to save the expenses which urban real estate often engenders, while claiming efficiencies in distribution. Product lines also follow local needs.
TargetExpress began operations at a single location within eyeshot of corporate headquarters, by the University of Minnesota. As the company intends that TargetExpress locations be designed to fit in within their respective communities as they open, including products offered, this first one essentially serves as a ground floor destination for the prominent, modern apartment building above.
Now Target has announced it will do away with distinctions as to its newly formed store names. All 14 CityTarget and TargetExpress locations will simply be called Target. The official changeover is expected to take place in October.
It is likely that many of CityTarget’s shoppers don’t truly notice the difference between that store and traditional Target locations. However, TargetExpress locations seem to be opening with distinct identities, both as to look, as well as through products offered. A visitor to one of the select communities offering a TargetExpress, likely would want to know what they are getting into prior to making a visit. Imagine the possible disappointment of a visitor expecting a full scale Target and entering a location offering between 12,000 and 20,000 sq. ft. of shopping space. On the other hand many might appreciate anticipating visiting a much smaller format Target, if they know one is immediately available.
Both Walmart and Target indicated high expectations as they inaugurated their respective smaller and Express formats. Now Walmart has dashed Walmart Express and maintains that its supermarkets are its small stores. On the other hand, Target is eliminating distinctive names which had highlighted its desirable express format attributes. What were once bold Express openings, simply become designated as just another Target.
As these two prominent industry CEOs celebrate their first anniversaries, it seems that they are in agreement as to the value of strongly promoting their smallest formats. Just two years these seemed all the rage.