As retailers face escalating challenges and sweeping store closures across their industry, Target Corp. considers its brick-and-mortar operations to be its "single-biggest competitive edge," the chain's CEO said Jan. 14 at the National Retail Federation's Big Show trade event.
Once viewed solely as retail outlets, Target's physical stores now are multipurpose buildings that also can serve as distribution centers and pickup locations.
"We've been aggressively investing in reimagining our physical stores," Target Chairman and CEO Brian Cornell said at the annual retail industry conference in New York. The Minneapolis-based company has invested in remodeling existing stores while also building smaller-format stores in urban neighborhoods.
In the past holiday season, three out of four online orders were fulfilled by Target's physical stores, Cornell added. That came as the retailer recorded a 29% year-over-year jump in comparable digital sales for November and December 2018.
It also reported a 5.7% year-over-year increase in overall comparable sales for the November-December period. "At Target, we posted our best sales in over a decade," the CEO said.
Cornell emphasized the benefits of traditional physical stores by highlighting digital companies that have opened stores and showrooms as their own "form of innovation."
During the past few years, e-commerce giants such as Seattle-based Amazon.com Inc. and China's Alibaba Group Holding Ltd. have opened physical stores that integrate retail technology. Cornell pointed to this trend as an indication that consumers want both the online and offline shopping experience.
While Target continues to explore and invest in artificial intelligence and other retail-focused technology, the company continues to have a strong commitment to its brick-and-mortar stores. "There's still no substitute for human connection," Cornell said.