Target Tests New Express Format

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

New 20,000-square-foot location could help establish company in dense urban locations

Target is looking to shake up its image as the large, suburban retailer by launching a new, smaller-format store better suited for dense, urban markets. Last week, Target signed a lease on a 20,000-square-foot store space in Minneapolis, which will be the site for the new test store called TargetExpress. Should this prototype prove successful, the company could see a wealth of new markets opening up for them in important markets like New York City — where it is difficult to find a location as large as the retailer is currently used to.

This move will also help the retailer stay relevant, especially for the younger Millennial generation that is drawn to bigger city living. John Griffith, EVP of property development for Target, told the New York Times, “Many [young people] grew up with a Target experience. Now, they show up at their cool little bungalow they’re redoing, they’re five miles from downtown, and yet, Target is a little bit of an effort to get to.”

For students moving to Minneapolis next fall, however, this will not be the case. The first location for the new TargetExpress will be at the base of an apartment building near the University of Minnesota campus. The store will open July 27, and should be a quick jaunt for students flocking back to the city and looking to furnish dorms and apartments and fill desk drawers. These formats will also feature limited selections of grocery and pharmacy items, clothing, home décor, and electronics. Not only does this location at the base of an apartment building provide the company with a built-in customer base, but it’s roughly 10 minutes from Target’s headquarters in downtown Minneapolis, which makes it easier to “go in and tweak it to death until it’s perfect,” Griffith says.

The express format is not an innovation that can be credited solely to Target. Other large retailers, including Walmart and British supermarket Tesco, have also opened express stores in the past to keep shopping more convenient for urban dwellers. Even Target itself has tried to slim down its square footage with the opening of CityTarget in the summer of 2012. Like TargetExpress, this format was launched to draw shoppers in urban Chicago, Los Angeles, and Seattle. It also served as a strategic move to prepare Target for its expansion into Canada in 2013. One of the differences between this format and the new Express is square footage. CityTarget ranged from 80,000 to 100,000 square feet (compared to 20,000 for the new TargetExpress and 135,000 for the average Target store.) The new TargetExpress will be roughly one-fifth of the size of CityTarget locations.

See “Merchandise Planning & Allocation Benchmark Survey: Planning For The Future”

Hopefully, the company will see some success from this prototype, which could help boost sales in new markets in the future. Coming out of the holiday season, the company is facing plenty of bad press following its epic data breach, not to mention an earnings slump because of the company’s costly and not yet profitable expansion into Canada.

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