The Default Department Store – Forbes

Denial In the Aisle

In the ongoing saga of retailing’s creative-destruction we’ve witnessed many recurring themes. Unbridled growth, undifferentiated offerings, and the race to the bottom price/value proposition, among them. But perhaps the single biggest industry shortcoming, (particularly in the department store C-suites) may have been the failure of reading clear market signs, and a willingness to make necessary strategic investments. Certainly, there were other issues at play, not totally of the department store industry’s making. The malls they anchor have had a precipitous drop in foot-fall for over a decade; which predated the great recession.

However, I would argue that a significant undoing came at the hands of the two big discounters, Walmart and Target. Their constant quest for market share, and strategic growth led to a culture of test and correct (fail-fast) thinking, which resulted in a fundamental change in their DNA. While the department stores were ‘sticking to their business’ the two behemoths were in a heated race with each other; and Amazon. Ultimately, they each built a retailing ecosystem, designed for ‘what was next’ rather than ‘what had been’, and ended up redefining their very category; and in the process syphoning market share from the troubled department stores.

Hitting A New Target

By many measures, Target and Walmart have become the ‘default’ department store of today. One need only to visit Target’s newest retail prototype, a key part of their $7 billion, 3-year initiative, to grasp the degree to which THEY have evolved. Having spent considerable time in two of Target’s ‘reimagined’ Minneapolis stores, I believe they represent more than a mere remodeling. They’ve reimagined the entire customer experience. In the interest of an objective evaluation of the new concept, three core components the stores’ design will be examined; namely Layout, Merchandising and Display, and Shopability.

Layout – Breaking Open the Box  

Upon entry, one immediately perceives a greater openness in the store. The aisles got wider and there are more breaks in the prevailing circulation pattern. There was a strategic initiative to depart from the monolithic, commodity feel, common to big-boxes. This results in clearer product segmentation, better defined categories, and a more upscale feel.

Along with more frequent ‘breaks’ in the racetrack are new secondary aisles, cut through previously unbroken categories. These serve to introduce new vignettes or strike-points in the store; think traffic roundabouts. These devices tend to slow down the visit and creating new points of interest. They are an effective means of featuring new collections, or cross-selling merchandise. And, it’s textbook department store stuff, executed well.

Merchandising And Display – In A Modernist Mode

Many of the warehouse gondolas, a core component of commodity merchandising, have been replaced by a sleek, white modular display system. This new vocabulary provides versatility and allows for display height flexibility. Gone is the ‘sea of sameness’ with everything merchandised at the same level. Gone too are blocked site lines, common to the category. The system effectively opens up the store, allowing customers to get a better ‘read’ on distant departments.

The new system provides for the development of ‘concept shops’ of both branded and generic product types. The combination of low level, table-top presentation with mid-level, transparent merchandising towers enables product storytelling. These are further complemented by backdrops of large-scale lifestyle presentation graphics which anchor most of the departments. This is a vernacular that one would expect at Crate & Barrel, or Nordstrom; and plays in to the “expect more, pay less” mantra.

I was particularly impressed at how well this new system played out in the kitchen category. At a time when the big commodity players like Bed, Bath, and Beyond and Pier 1 are struggling, Target has presented an edited offering of kitchen essentials, brilliantly displayed; like a great chef reduces a stock to deliciousness. Likewise, a slight alteration of the system was used to showcase the popular Hearth & Hand, Chip and Joanna Gaines’ Magnolia collection; an exclusive for Target.

The overall look of the store has been greatly enhanced by vastly improved lighting. The ambient lighting system has been augmented by new LED accent lighting. Additionally, more emphasis was placed on effective, internal floor fixture LED illumination. This has resulted in better product highlighting, enhanced color rendering and a new crispness throughout. The payback on this will be both short and long-term.

Shopability – Where Design Meets the Bottom Line

Much attention has been paid to improving signage, at department, category and product levels. This helps with wayfinding as well as decision making. The large-scale lifestyle graphics give secondary clues to category, while emphasizing style, and linking to Target’s digital brand vocabulary. Where many retailers fall short is at the more granular level of choice-making. Here Target rules by excelling at both editing their product offerings and providing excellent top-line product information; to assist with “that’s the one I want/need”. This can be seen in products as diverse as curling irons and strollers.

Target’s nemesis has long been its grocery area. And the recognizable improvements made in this area can only help. For the first time the category doesn’t feel accidental. The introduction of wood tones, which complements the new taupe-gray background is far more ‘food friendly’ then the Target Red that used to envelop the entire store. Naturally, the improved lighting makes the fresh food more appealing; and great graphics take the ambience up a notch. Now, to keep the grocery shelves stocked!