Target is adding a larger store format with a focus on fulfillment and e-commerce

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diving letter:

  • Target is introducing a new large format store that will be around 150,000 square feet, which would make it about 20,000 square feet larger than its average, according to a company release.
  • Target said the new large-format concept will be its primary development focus in the coming years, while continuing to open stores of other sizes.
  • With the new format, Target is playing around with other design elements, including what it calls a more open layout and localized elements, which the retailer said it would add in future remodels as well.

Dive insight:

Target’s new larger format represents a linchpin of its development focus over the past few years, which has involved an expansion of the retailer’s small-format concept tailored to urban areas and younger shoppers.

These smaller stores generally ranged in size from 17,000 to 50,000 square feet. The retailer even opened a 6,000-square-foot store in 2020 to reach even more neighborhoods and universities.

To state the obvious, the new format is much bigger than that. Target Chief Operating Officer John Mulligan pointed to the importance of same-day omnichannel services such as Order Pickup (Target’s BOPIS offering) and Drive Up (Curbside ) to explain the switch to the larger format.

“With our revamped store design and larger store space that better supports our same-day services, we can offer our guests more of what they love while incorporating features that build on our commitment to sustainability, community and everyone Helping families discover the joy of everyday life,” Mulligan said in the press release.

The additional square footage provides five times more space for backroom transactions than the traditional large format stores. According to Target, the stores will also accommodate a wider range of merchandise, including space for an expanded food and beverage selection.

The company cited “years” of research behind the new design and strategy at the big stores. Target recently opened one of the larger stores outside of Houston.

Those design features will be introduced in renovations at more than 200 stores and in nearly all of the 30 new stores the company has planned starting in 2023, the company said. Beginning in 2024, all of Target’s remodels and new stores would then adopt the designs.

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