Can Cornell Redirect Target?

By Brianna Ahearn, contributing writer

On July 31, Target hired its new CEO, Brian Cornell, after the previous CEO stepped down.  Gregg Steinhafel resigned from his position of CEO in May 2014, and the company has chosen an outside hire in Cornell, a veteran of food and retail. Cornell is a former executive of PepsiCo’s Americas Foods and previously worked with Michaels and Sams Club. Target has been through a bit of a shake-up lately, but industry insiders are confident about Cornell’s ability to helm the retailer. The move of an outside hire in Cornell might prove to be a positive change for Target and Cornell has impressive experience that may aid him.

The challenge facing Cornell and Target itself is overcoming significant blows the retailer has sustained. As Paula Rosenblum, managing partner at RSR Research and Integrated Solutions For Retailers’ editorial board member says, “Target, by its own admission, has lost its way.” The data breach Target suffered in late 2013 changed the public’s image of Target significantly, and Rosenblum says, “The company has devolved over the years.” What Cornell must do is redirect Target to a more positive image to solve the “mixed messages” Rosenblum says customers receive. Target positioned itself as a retailer of high quality low-priced goods in decor and apparel, but now the prices of its merchandise have consumers and retail analysts questioning Target’s moves. As a newcomer to Target, Cornell may shed new light on how to increase customer loyalty and improve the overall customer experience. The incoming CEO may also be able to ascertain how to adjust pricing so value is still implied without the company looking “cheap.”

Cornell has come to the retailer at a time when Target is preparing for the holiday season. The 2013 holiday sales for the company were down with profits below expectations. The fall was no doubt caused by the credit card breach. As Rosenblum points out, Target has been a prime retailer during the Black Friday rush and it would be difficult for the company to alter their plans for the promotions now, even in the wake of hiring a new CEO. The test for Cornell will be if the company can maintain the same strategy and pull in higher sales than the previous holiday season. Target, however, is in a state of repair. The Information Technology team is brand new to Cornell, a feature which may prove to be beneficial for the company.

There’s one last hurdle Cornell must face — the Canadian market. As Forbes reported recently, the retailer has lost almost billion dollars in their Canadian operations. Some retail analysts accused the company of using a carbon-copy system of the United States market, expecting it to work. The Canadian market is an entity outside of the United States market, and it comes with its own challenges, strengths, and weaknesses. Cornell may be the individual to identify best how to meet the unique needs of the Canadian stores and address the consumer experience.