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Target Corporation is an American retailing company that was founded in Minneapolis, Minnesota in 1902 under the name of Dayton Dry Goods Company. In 1962, the first Target store opened in Roseville, Minnesota, and in 2000 the company changed its name from Dayton Hudson to Target. It is the fifth largest retailer by sales revenue in the United States, behind Wal-Mart, The Home Depot, Kroger, and Costco. The company is ranked at number 31 on the Fortune 500 . Target operates its retailing business exclusively in the United States.
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Encyclopedia
Target Corporation is an American retailing company that was founded in Minneapolis, Minnesota in 1902 under the name of Dayton Dry Goods Company. In 1962, the first Target store opened in Roseville, Minnesota, and in 2000 the company changed its name from Dayton Hudson to Target. It is the fifth largest retailer by sales revenue in the United States, behind Wal-Mart, The Home Depot, Kroger, and Costco. The company is ranked at number 31 on the Fortune 500 . Target operates its retailing business exclusively in the United States. It is a rival and competitor of Kmart and Wal-Mart. Target is a component of the Standard and Poor's 500 index.
History
1902–1962: Dayton's
In 1902, George Dayton constructed a six-story building in downtown Minneapolis and convinced R.S. Goodfellow Company to move its Goodfellows department store into it. The store's owner, Reuben Simon Goodfellow, retired and sold his interest in the store to George Dayton. In 1903, the store changed its name to the Dayton Dry Goods Company, and it changed its name again to the Dayton Company in 1911. In the 1950s, it acquired the Portland, Oregon-based Lipmans department store company and operated it as a separate division. In 1956, the Dayton Company opened Southdale, the world's first fully-enclosed two-level shopping center in Edina, Minnesota, a suburb of Minneapolis. The Dayton Company also became a retail chain by opening its second Dayton's store in Southdale.
1962–1971: The founding of Target
In 1962, the Dayton Company, using a concept developed by John F. Geisse, entered discount merchandising by opening its first Target discount store in Roseville, Minnesota, a suburb north of Saint Paul. The name "Target" originated from Dayton's publicity director, Stewart K. Widdess, and was intended to prevent consumers from associating the new discount store chain with the department store. The new subsidiary, Target Stores, ended its first year with four units, all in Minnesota. Target Stores lost money in its initial years, but in 1965 it reported its first gain with sales reaching $39 million, allowing a fifth store to open in Minneapolis. In 1966, Bruce Dayton launched the B. Dalton Bookseller specialty chain, which became the largest hardcover bookseller in the United States. The bookseller chain was named after the founder, but with the y in Dayton replaced with an l. Target Stores expanded outside of Minneapolis by opening two stores in Denver, Colorado, and sales exceeded $60 million. In 1967, the Dayton Corporation was established and it went public with its first offering of common stock, and it opened two more Target stores in Minnesota resulting in a total of nine units.
In 1968, Target changed its bullseye logo to a more modern look, and expanded into St. Louis, Missouri, with two new units. That year, Target Stores experienced a transition phase: Target's president and co-founder, Douglas J. Dayton, went back to the parent Dayton Corporation and was succeeded by William A. Hodder, and senior vice president and cofounder John Geisse left the company. He was later hired by St. Louis-based May Department Stores, where he founded the Venture Stores chain. Target Stores ended the year with 11 units and $130 million in sales. In 1969, it acquired the Lechmere electronics and appliances chain that operated in New England, and expanded Target Stores into Texas and Oklahoma with six new units and its first distribution center in Fridley, Minnesota. The Dayton Company also merged with the Detroit-based J.L. Hudson company that year, to become the Dayton-Hudson Corporation consisting of Target and five major department store chains: Dayton's, Diamond's of Phoenix, Arizona, Hudson's, John A. Brown of Oklahoma City, Oklahoma, and Lipmans. In 1970, Target Stores added seven new units, including two units in Wisconsin, and the 24-unit chain reached $200 million in sales. That year, Dayton-Hudson also acquired the Team Electronics specialty chain that was headed by Stephen L. Pistner.
1971-1982: Turnaround
In 1971, Dayton-Hudson acquired sixteen stores from the Arlan's department store chain in Colorado, Iowa, and Oklahoma. That year, two of those units reopened as Target stores, and in 1972 the other fourteen were reopened to make a total of 46 units. This caused the chain to experience another major transition phase: It reported its first decrease in profits since its initial years, as a result of the chain's rapid expansion and the top executives' lack of experience in discount retailing. Its loss in operational revenue was due to overstocking and carrying goods over multiple years regardless of inventory and storage costs. By then, Dayton Hudson considered selling off the Target Stores subsidiary. In 1973, Stephen Pistner, who had already revived Team Electronics and would later revive Montgomery Ward and Ames, was named chief executive officer of Target Stores, and Kenneth A. Macke was named Target Stores's senior vice president. The new management saved the chain by marking down merchandise to clean out its overstock and by allowing only one new unit to open that year. In 1975, it opened two stores, reaching 49 units in nine states and $511 million in sales. That year, the Target discount chain became the company's top revenue producer.
In 1976, Target opened four new units and reached $600 million in sales. That year, Macke was promoted to president and chief executive officer of Target Stores. In 1977, Target Stores opened seven new units, and Stephen Pistner became president of Dayton Hudson, with Macke succeeding him as chairman and chief executive officer of Target Stores. The senior vice president of Dayton Hudson, Bruce G. Allbright, moved to Target Stores and succeeded Kenneth Macke as president. In 1978, the company acquired Mervyns and became the 7th largest retailer in the United States. Target Stores opened eight new stores that year, including its first shopping mall anchor store in Grand Forks, North Dakota. In 1979, it opened 13 new units to a total of 80 Target stores in eleven states and $1.12 billion in sales. In 1980, it sold its Lipmans department store chain of six units to Marshall Field's, which rebranded the stores as Frederick & Nelson. That year, Target Stores opened seventeen new units, including expansions into Tennessee and Kansas. It also acquired the Ayr-Way discount retail chain of 40 stores and one distribution center from Indianapolis-based L.S. Ayres & Company, which it reopened in 1981 as Target stores. That year, Stephen Pistner left the parent company to join Montgomery Ward, and Kenneth Macke succeeded him as president of Dayton Hudson. Floyd Hall succeeded Kenneth Macke as chairman and chief executive officer of Target Stores. Bruce Allbright left the company to work for Woolworth, where he was named chairman and chief executive officer of Woolco. Bob Ulrich also became president and chief executive officer of Diamond's Department Stores in 1981. In addition to the Ayr-Way acquisition, Target Stores expanded by opening fourteen new units and a third distribution center in Little Rock, Arkansas, to a total of 151 units and $2.05 billion in sales.
1982–2000: West and East Coast expansion
Since the launch of Target Stores to this point, it had focused its expansion in the Central United States. In 1982, it expanded into the West Coast of the United States by acquiring 33 FedMart stores in Arizona, California, and Texas and opening a fourth distribution center in Los Angeles. That year, Bruce Allbright returned to Target Stores as its vice chairman and chief administrative officer, and the chain expanded to 167 units and $2.41 billion in sales. The 33 units acquired from FedMart were reopened as Target stores in 1983. Also in 1983, it founded the Plums off-price apparel specialty store chain with four units in the Los Angeles area, with an intended audience of middle-to-upper income women.
In 1984, it sold its Plums chain to Ross Stores after only 11 months of operation, and it sold its Diamond's and John A. Brown department store chains to Dillard's. Meanwhile, Target Stores added nine new units to a total of 215 stores and $3.55 billion in sales. Floyd Hall left the company and Bruce Allbright succeeded him as chairman and chief executive officer of Target Stores. In May 1984, Bob Ulrich became president of the Dayton Hudson Department Store Division, and in December 1984 became president of Target Stores.
In 1986, the company acquired 50 Gemco stores from Lucky Stores in California, allowing Target Stores to become the dominant retailer in Southern California as the chain grew to a total of 246 units. It also opened a fifth distribution center in Pueblo, Colorado. Dayton-Hudson sold the B. Dalton Bookseller chain of several hundred units to Barnes & Noble. In 1987, the acquired Gemco units reopened as Target units, and Target Stores expanded into Michigan and Nevada, including six new units in Detroit, Michigan, to compete directly against Detroit-based Kmart, leading to a total of 317 units in 24 states and $5.3 billion in sales. Bruce Allbright became president of Dayton Hudson, and Bob Ulrich succeeded him as chairman and chief executive officer of Target Stores. In 1988, Target Stores expanded into the Northwestern United States by opening eight units in Washington and three in Oregon, to a total of 341 units in 27 states. It also opened a distribution center in Sacramento, California, and replaced the existing distribution center in Indianapolis, Indiana, from the Ayr-Way acquisition with a new one.
In 1989, it expanded by 60 units, especially in the Southeastern United States where it entered Florida, Georgia, North Carolina, and South Carolina to a total of 399 units in 30 states with $7.51 billion in sales. This included an acquisition of 31 more stores from Federated Department Stores' Gold Circle and Richway chains in Florida, Georgia, and North Carolina, which were later reopened as Target stores. It also sold its Lechmere chain that year to a group of investors including Berkshire Partners, a leveraged buy-out firm based in Boston, Massachusetts, eight Lechmere executives, and two local shopping mall executives.
In 1990, it acquired Marshall Field's from BATUS Inc. and Target Stores opened its first Target Greatland general merchandise superstore in Apple Valley, Minnesota. In 1991, Target Stores had opened 43 Target Greatland units, and sales reached $9.01 billion. In 1992, it created a short-lived chain of apparel specialty stores called Everyday Hero with two stores in Minneapolis. They attempted to compete against other apparel specialty stores such as GAP by offering private label apparel such as its Merona brand. In 1993, it created a chain of closeout stores called Smarts for liquidating clearance merchandise, such as private label apparel, that did not appeal to typical closeout chains that were only interested in national brands. It operated four Smarts units out of former Target stores in Rancho Cucamonga, California, Des Moines, Iowa, El Paso, Texas, and Indianapolis, Indiana that each closed out merchandise in nearby distribution centers. In 1994, Kenneth Macke left the company, and Bob Ulrich succeeded him as the new chairman of Dayton-Hudson.
In 1995, Target Stores opened its first SuperTarget hypermarket in Omaha, Nebraska. It also closed the four Smarts units after only two years of operation. Its store count increased to 670 with $15.7 billion in sales, and in 1996 to 736 units with $17.8 billion in sales. In 1997, both of the Everyday Hero stores were closed. Target's store count rose to 796 units, and sales rose to $20.2 billion. In 1998, it acquired Greenspring Company's multi-catalog direct marketing unit, the Rivertown Trading Company, from Minnesota Communications Group, and it acquired the Associated Merchandising Corporation, an apparel supplier. Target Stores grew to 851 units and $23.0 billion in sales. In 1999, it acquired Fedco and its ten stores in a move to expand its SuperTarget operation into Southern California. It reopened six of these stores under the Target brand and sold the other four locations to Wal-Mart, Home Depot, and the Ontario Police Department, and its store count rose to 912 units in 44 states with sales reaching $26.0 billion. On September 7, 1999, it relaunched its Target.com website as an e-commerce site and as part of its discount retail division. The site initially offered merchandise that differentiated its stores from its competitors, such as its Michael Graves brand.
2000–present: Target Corporation
In January 2000, Dayton Hudson Corporation changed its name to Target Corporation and its ticker symbol to TGT; by then, between 75 percent and 80 percent of the corporation's total sales and earnings came from Target Stores, while the other four chains—Dayton's, Hudson's, Marshall Field's, and Mervyns—were used to fuel the growth of the discount chain, which expanded to 977 stores in 46 states and sales reached $29.7 billion by the end of the year. It also separated its e-commerce operations from its retailing division, and combined it with its Rivertown Trading unit into a stand-alone subsidiary called target.direct. In 2001, it announced that its Dayton's and Hudson's stores would operate under the Marshall Field's brand, which was the most recognizable name in the Department Stores Division. Target Stores expanded into Maine, reaching 1053 units in 47 states and $33.0 billion in sales. In 2002, it expanded to 1147 units, which included stores in San Leandro (Bayfair Mall), Fremont, and Hayward, California, and sales reached $37.4 billion, and in 2003 it reached 1225 units and $42.0 billion in sales.
On June 9, 2004, Target Corporation announced its sale of the Marshall Field's chain to St. Louis, Missouri-based May Department Stores, which became effective July 31, 2004. On July 21, 2004, it announced the sale of Mervyns to an investment consortium including Sun Capital Partners, Inc., Cerberus Capital Management, L.P., Lubert-Adler/ Klaff and Partners, L.P., which was finalized September 2. Target Stores expanded to 1308 units and reached $46.8 billion USD in sales. In 2005, it reached 1397 units and $52.6 billion in sales, and in 2006 it expanded to 1488 units and sales reached $59.4 billion.
In May 2005, Target began operation in Bangalore, India, and these operations currently support all Target business units. In 2006, Target completed construction of the Robert J. Ulrich Center in Embassy Golf Links in Bangalore, and Target plans to continue its expansion into India with the construction of additional office space at the Mysore Corporate Campus.
On January 9, 2008, Bob Ulrich announced his plans to retire as CEO, and named Gregg Steinhafel as his successor. This is due to Target Corporation policy which requires its high ranking officers to retire at the age of 65. Ulrich's retirement as CEO was effective May 1, but he will remain the chairman of the board until the end of the 2008 fiscal year.
On March 4,2009 Target expanded outside of the continental United States for the first time. Two stores were opened simultaneously on the island of Oahu in Hawaii. Despite the economic downturn, media reports indicated sizable crowds and brisk sales.
Subsidiaries
Today, Target Corporation has its headquarters on Nicollet Mall in Minneapolis, near the site of the original Goodfellows store. As well as the main retail subsidiary, Target Stores, the company owns several other subsidiaries, which include:
- Target Financial Services (TFS): issues Target's credit cards, known as the Target REDcard, consisting of the Target VISA and the Target Card (formerly the Target Guest Card), issued through Target National Bank (formerly Retailers National Bank) for consumers and through Target Bank for businesses. Target Financial Services also oversees GiftCard balances. In October 2007, Target launched its PIN based debit card, the Target Check Card. The Target Check Card withdraws funds from the customer's existing checking account, and allows for up to $40 "cash back". The check card allows customers to accumulate points towards Target Rewards, as well as designate a school for Target's Take Charge of Education program, and accumulate pharmacy rewards. Unlike the Target Card and the Target Visa, customers do not receive an instant 10% discount for opening the account.
- Target Sourcing Services/The Associated Merchandising Corporation (TSS/AMC): This global sourcing organization locates merchandise from around the world for Target and helps import the merchandise to the United States. Such merchandise include garments, furniture, bedding, and towels. TSS/AMC has 27 full-service offices, 48 quality-control offices, and seven commissionaires located throughout the world. TSS/AMC employs 1,200 people. Its engineers are responsible for evaluating the factories that do business with Target Corporation for quality, as well as labor rights and transshipment issues. It was acquired by Target Corporation in 1998, and was founded in 1916, previously owned by the clients it served. It also acts as a buying office for Saks Incorporated, Bloomingdale's, Stage Stores Inc., TJ Maxx, and Marshalls. The Target Sourcing Services division locates merchandise exclusively for Target Stores and Target.com.
- Target Commercial Interiors: provides design services and furniture for office space and originated in the home furniture department at Dayton’s. Currently, Target Commercial Interiors has an unusually high market share of Fortune 500/1000 business customers, and are expanding to attract small to medium sized businesses, as well as home offices. This subsidiary has six showrooms in Illinois, Minnesota, and Wisconsin, including a first-of-its-kind retail concept store and showroom in Bloomington, Minnesota that opened on June 23, 2005.
- Target Brands: owns and oversees the company's private label products, including the grocery brands Archer Farms and Market Pantry, Sutton & Dodge, their premium meat line, and the electronics brand Trutech. In addition, Bullseye Dog is a trademark, and the Bullseye Design and 'Target' are registered trademarks of Target Brands.
- Target.com: owns and oversees the company's e-commerce initiatives, such as the Target.com domain. Founded in early 2000 as target.direct, it was formed by separating the company's existing e-commerce operations from its retailing division, and combining it with its Rivertown Trading direct marketing unit into a stand-alone subsidiary. In 2002, target.direct and Amazon.com's subsidiary Amazon Enterprise Solutions created a partnership in which Amazon.com would provide order fulfillment and guest services for Target.com in exchange for fixed and variable fees. This electronic commerce relationship between target.direct and Amazon Enterprise Solutions will last until August 2010. After the company sold Marshall Field's and Mervyns in 2004, target.direct became Target.com. The domain target.com attracted at least 288 million visitors annually by 2008 according to a Compete.com survey.
Target Stores
Target Corporation's main retailing subsidiary, Target Stores, is a United States discount retail chain consisting of 1,685 stores . It has units in all states except for Vermont, operating under the mastheads of Target, Target Greatland, and SuperTarget. The chain was founded by Douglas J. Dayton and John Geisse, and the first Target store "T-1" opened on May 1, 1962 in Roseville, Minnesota. That store was closed and demolished on January 8, 2005, to make room for a SuperTarget, which opened on October 9 of the same year. Target Corporation has aggressive plans to have 2,000 stores open by the year 2010
Target's retail operations are limited to the United States. Aside from the leased name and logo, the Australian retail chain of the same name is not related to Target Corporation.
Target
Target is a chain of discount department stores that are about 95,000 to 135,000 square feet (12,000 m²) and carry hardlines ("regular" products and goods), softlines (clothing), and a limited amount of groceries, mostly non-perishable. Specifically, Target stores carry clothing, shoes, jewelry, health and beauty products, electronics, compact discs, DVDs, bedding, kitchen supplies, sporting goods, toys, pet supplies, automotive supplies, hardware supplies, and food. They also carry seasonal merchandise such as patio furniture during the summer and Christmas decorations during November and December. Many stores may also have one-hour photo processing, a portrait studio, an optical store, a pharmacy, and a garden center. Stores opened or re-modeled in 2004 or later also include the expanded snack bar that is featured in Target Greatland locations. These generally include a Starbucks Coffee shop, a Pizza Hut Express, and a Taco Bell Express in addition to Target's "Food Avenue". It has also been reported that Cold Stone Creamery and Target have signed a deal to test in-store ice cream shops in four stores. In 2008, Target has begun to use the name "Target Cafe" in place of "Food Avenue", as noted on in-store coupons.
The first Target stores included leased supermarkets in addition to general merchandise, which during the time was a common practice by discount retailers as they attempted to offer a one-stop shopping experience to customers. Douglas Dayton stated in 1967 that "we believe that the discount-grocery store is a necessary ingredient in what we offer the customer. After all, food sales are about 40% of all department store-type merchandise sales, so the two kinds of stores go hand-in-hand and are what people think of when they think of a discount store." However, by the end of the decade, Target started moving away from this general merchandise and leased supermarket practice. In 1969, Target opened its first store consisting of only general merchandise.
In the past, the one-hour photo processing labs were not owned by Target but by Qualex, a subsidiary of Eastman Kodak, and were staffed by employees of Qualex, not Target. However, in June 2005, Target spokeswoman Brie Heath announced that Target Corporation will replace the Qualex photo labs with their own labs running Kodak equipment, and will staff them with Target employees. Unlike the previous Qualex labs, all photo processing is done "in house", including next-day, digital, and Kodak Perfect Touch processing, although a few labs have been replaced with "send-out" only service with a self-service Kodak Picture Maker kiosk. A select number of "test" stores are running with Fujifilm equipment instead of Kodak. Target has also partnered with Yahoo! Photos for online photo services, including ordering prints online for one-hour store pickup. This ended in September 2007. Target Photo now partners with Kodak Gallery, Shutterfly, and Photobucket.
Target Greatland
Target Greatland is a chain of general merchandise superstores that are about 150,000 square feet (14,000 m²). Like SuperTargets (below), they carry a larger selection of general merchandise than a basic Target store; however, though they carry more groceries than a typical Target store, they do not have a full-line of groceries like meat, bakery, deli, produce and dairy. The first Target Greatland opened in Apple Valley, Minnesota, in 1990, but has since been remodeled and expanded, becoming a SuperTarget. Throughout 2005, the company reorganized the sales floor, allowing them to double the grocery space they had before. Prominent features include double entrances on single level stores along with an expanded snack bar. The snack bar may include a Pizza Hut Express, Taco Bell Express, and/or a Starbucks. The construction of new Target Greatland stores has been phased out in favor of building SuperTarget prototypes or regular Target prototypes with expanded sales floors. The last Target Greatland opened in 2006 and is located in Staten Island, New York City.
SuperTarget
SuperTarget is a chain of hypermarkets that are about . Like Target Greatland, SuperTarget features double entrances on one-story stores; some also have between the double entrances a merchandise loading lane as a prominent feature of the building. The store logo often spells "Super" in green script, but recently, newer locations are signed in red block letters in the Helvetica font that the word "Target" uses in favor of a more streamlined red "Target Brand" look. SuperTarget stores, unlike Target and Target Greatland, carry all the same essentials, including a full service grocery with a bakery, meat department, fresh produce, and a SuperDeli. Most old locations and all new SuperTarget stores will include a Target Optical. Many SuperTarget stores may also feature a Starbucks Coffee shop, a Pizza Hut Express, a Taco Bell Express, (which is currently being phased out in all Target locations) Jamba Juice, a Target Pharmacy, The Studio @ Target (a portrait studio), Target Photo (a one-hour photo processing lab), and a Wells Fargo Bank or U.S. Bank. Select few stores in Maryland and the Twin Cities also have a new concept inside called Target Clinic. It is similar to Minute Clinic found in drug stores such as Walgreens or CVS/pharmacy. Unlike many other hypermarkets in the United States (such as Wal-Mart Supercenters and Meijer), SuperTargets are not open twenty-four hours.
In the past, some SuperTargets featured an E*TRADE trading station instead of a Wells Fargo Bank. However, in June 2003, E*TRADE decided to remove all E*TRADE branches from their SuperTarget locations without advance notice. This sudden move was not initiated by Target Corporation. Mitchell Caplan, E*TRADE's CEO at that time, said that "We were not able to make it into a profitable distribution channel...[w]e're better off exiting." E*TRADE also sent a letter of notification to their customers informing them about this change.
The first SuperTarget opened in Omaha, Nebraska in 1995, and the second SuperTarget opened in Lawrence, Kansas, later that same year. , Target operated 210 SuperTarget stores in 22 U.S. states, the majority of those are in Texas and Florida, with sizable numbers in Minnesota and Colorado.
Urban stores
While many Target stores share a fairly common big-box store layout, the company has been flexible with its designs. Target operates unique stores across the country in urban locations or within malls, in which a standard one-story building would not be feasible. These stores encompass multiple floors with both sales floor area and off stage areas such as offices or storage rooms spanning a number of these floors. Vertical transportation is provided in the store by escalator, elevator, or Vermaport, a specialized escalator for carts.
Target has used their urban store concept to open multiple story stores in city centers such as in Brooklyn, New York City, Glendale, Los Angeles, Chicago, Pasadena, California, San Diego, Washington, D.C., Atlanta, New Orleans, and Minneapolis within the corporation's headquarters complex. Building stores in these environments carries an elevated cost which is offset by the high potential for business that these stores can bring in. The Target store located on Nicollet Mall in Minneapolis features a three-story glass entrance and a design that sets it apart from suburban Target stores. This urban store alone cost Target Corporation $16.3 million. This concept has also been used to convert Target stores from former Bullock's, Montgomery Ward, J. W. Robinson's, Robinsons-May and Younkers stores.
Distribution centers
, Target Corporation operates 26 distribution centers across the United States. Target opened two new distribution centers in 2006 (Rialto, California and DeKalb, Illinois) to support the growth of its stores. With the exception of vendor supplied items, such as greeting cards and soda, these distribution centers ship items directly to Target stores. Also, unlike Wal-Mart, Target's grocery selection does not come from their own distribution centers, but from the companies that Target has partnered with. For example, the produce carried in SuperTargets comes from Supervalu distribution centers, except in Colorado, which are serviced through FreshPack Produce Inc. of Denver, Colorado.
The retail chain's first distribution center opened in Fridley, Minnesota, in 1969. It included a computerized distribution system and was known as the Northern Distribution Center. During this time, the chain consisted of seventeen stores after having expanded into Oklahoma and Texas.
On August 9, 2004, Target announced to their suppliers that they were going to perform a trial on the effects of radio frequency identification on the efficiency of supply chain management in the Dallas/Fort Worth Metroplex. This trial involved one Target distribution center and ten nearby Target stores. Here, RFID tags would be placed on the bar codes of pallets and cartons to track the goods from the suppliers to the distribution center, and from the distribution center to the stores.
On January 27, 2009, Target announced the closing of their Distribution Center located in Maumelle, Arkansas. The facility employed 500 Team Members and they where offered other positions at other Distribution Centers or a severance package that included 12 months of medical coverage. The Distribution Center was their second oldest in the company. The reason for the closure was that Target was clearly operating in an unprecedented economic environment that requires them to make some extremely difficult decisions to ensure Target remains competitive over the long-term.
Differentiation
Target Corporation competes directly against other discount retailers, mainly Wal-Mart and Kmart. Since its founding in 1962, it has intended to differentiate its stores from its competitors by offering what it believes is more upscale, trend-forward merchandise at low cost, as opposed to the traditional concept of focusing on low-priced goods. Douglas J. Dayton, one of the Dayton brothers, explained John Geisse's concept:
As a result, Target stores tend to attract younger and more educated and affluent customers than its competitors. Currently, the median Target shopper is 41 years old, which is the youngest of all major discount retailers that Target competes directly against. The median household income of Target's customer base is roughly $63,000 USD. Roughly 76% of Target customers are female, and more than 45% have children at home. About 80% have attended college and 48% have completed college. Ninety-seven percent of American consumers recognize the Target Bullseye logo.
In October 2008, Target announced plans to fight the perception that their products are more expensive than those of other discount retailers, such as Wal-Mart. The company planned to add perishables to their inventory, cut back on discretionary items, and spend three-quarters of their marketing budget on advertising that emphasizes value and includes actual prices of items featured in ads. Target also planned to slow its expansion from about 100 stores a year down to 70 stores a year.
Target refers to itself as a "discount department store" instead of just a discount store. Target stores do not play ambient music, commonly known as elevator music or Muzak. However, several Target stores feature a Starbucks, and those do play music - but only in the Starbucks centers. It also does not promote items or services through its public address system. Target designs its stores to be more attractive than Wal-Mart, and other large box-department stores by having wider aisles, drop ceilings, a more attractive presentation of merchandise and generally cleaner fixtures. In addition, special attention is given to the design of the store environment: Graphics reinforce Target's advertising imagery and shelves are dressed with contemporary signage, backdrops and liners, often printed on inexpensive material such as paper, corrugated and foam boards. Some stores—particularly those around international airports—have a bullseye painted on the roof that can be seen from above: the Alexandria, Virginia store, near Washington National Airport is one such Target unit, as is the Rosemont, Illinois store next to O'Hare International Airport.
Some people jokingly give Target the pseudo-French pronunciation "Tar-zhay" , as though it were an upscale boutique. This trend is incorrectly believed to have been started by Oprah Winfrey, when she used the French pronunciation to refer to the store on her television show; it has actually been traced back to 1962, the year the first Target store opened; this was reinforced by a 1980s television advertisement starring Didi Conn. This pronunciation has also led some people to incorrectly believe that the company is French-owned.
Target calls its customers "Guests", its employees "Team Members", and its supervisors "Team Leaders". Also, managers are known as "Executive Team Lead (ETLs)" and the Store Manager is known as the "Store Team Leader". This practice was derived in 1989 from The Walt Disney Company.
Target stores do not sell firearms. In the early 1990s, they stopped selling toy guns that looked realistic and limited its toy gun selection to ones that were brightly colored and oddly shaped. They do not sell tobacco products and have not sold cigarettes since 1996.
Target has many exclusive deals with various designers and name-brands, including Michael Graves, Mossimo Giannulli, Fiorucci, Liz Lange, and Converse among others. To further increase their fashion profile, Target also created its fashion-forward Go International line, which hires famous designers to design collections available only for a few months. Target, after hiring architect Michael Graves to design the scaffolding used to renovate the Washington Monument and contributing $6 million USD to the restoration plan, introduced its first designer line of products in 1999, the Michael Graves Collection of housewares and home decor products. Wal-Mart and Kmart have followed Target's lead by signing exclusive designers to their stores as well. Target also partners with well-established national brands to create exclusive collections for its stores. Recently, Sony created a line of electronics under the Sony LIV name geared toward women. The collection included a CD player that resembled a purse and a CD player that was equipped to be mounted under the kitchen counter. Another example of this is Target having an exclusive deal with Food Network for selling DVDs of TV shows featuring popular chefs such as Rachael Ray, Alton Brown, and Paula Deen. In July 2006, Target started selling two-tone pink edition Apple iPods through a partnership with Colorware. Sometimes manufacturers will create red-colored items, exclusively for Target. In 2002, Nintendo produced a red special edition variant of the Game Boy Advance, which featured the Target logo above the screen.
In 2005, IFC began a partnership with Target to promote a selection of independent films, both in Target stores and on IFC Monday nights at 9:00 p.m. Eastern. Originally titled IFC Cinema Red, the promotion was rebranded on air asThe Spotlight in 2007. The in-store headers refer to the selected titles as IFC Indies - Independent films chosen for Target by the Independent Film Channel.
GiftCards
The Target GiftCard is the retailing division's stored-value card or gift card. Target sells more gift cards than any other retailer in the United States and is one of the top sellers, by dollars and units, in the world. The unique designs of their cards contribute to their higher sales, as well as Target's policy of no expiration dates or service fees. Past and current designs include lenticular, "scratch and sniff" (such as peppermint during the Christmas season), glow in the dark, LED light-up, a gift card on the side of a bubble blower, a gift card that can function as a CD-ROM, and even a giftcard that allows the sender to record a voice message. A current environmentally friendly giftcard is made from bioplastic manufactured from corn. Target rolled out a new MP3 player giftcard for the 2006 holiday season. It holds 12 songs and must be purchased with an initial value of at least $50.
Some of these unique design ideas are patented, and these patents are assigned to the Target Brands subsidiary. For example, some such Target GiftCard designs feature a wooden front side. On May 24, 2005, the United States Patent and Trademark Office granted U.S. patent D505,450 for the "ornamental design for a credit or stored value card with wood layer" to inventors Amy L. Lauer and John D. Mayhew. U.S. patent 7004398, for the "stored-value card assembly including a stored-value card, an edible product, and a wrapper", was granted to Michael R. Francis and Barry C. Brooks on February 28, 2006. Both patents have been assigned to Target Brands, Inc.
Target GiftCards are also collectors items. Some of the first gift cards issued are valued at over $300 (even though the card doesn't have any money on it). Every year Target introduces new Holiday GiftCards. In 2007, Target's Holiday GiftCards featured a wind-up flashlight, a musical gift card, a gift card that lights up, and a scented gift card.
ClearRx
In 2005, Target introduced a major revision of prescription bottles, which it calls the ClearRx system. The redesigned bottles are color coded, flattened-out and turned upside down providing more room for the label. This system was based on the patent by student Deborah Adler and was named one of Times "Most Amazing Inventions of 2005".
Philanthropy
Target Corporation is consistently ranked as one of the most philanthropic companies in the country. It ranked #11 in Fortune Magazine's "Top 20 Most Admired Companies" for 2007, largely in part to the donation efforts of the company as a whole. According to a November 2005 Forbes article, it ranked as the highest cash-giving company in America in percentage of income given (2.1%). Target donates around 5 percent of its pre-tax operating profit; it gives over $3 million a week (up from $2 million in years prior) to the communities in which it operates. It also gives a percentage of charges from its Target Visa to schools designated by the cardholders. To date, Target has given over $150 million to schools across the United States through this program. Target's corporate by-laws state it must give 5 percent of its pre-tax profits to charity.
Further evidence of Target's philanthropy can be found in the Target House complex in Memphis, Tennessee, a long-term housing solution for families of patients at the city's St. Jude Children's Research Hospital. The corporation led the way with more than $27 million in donations, which made available 96 fully furnished apartments for families needing to stay at St. Jude over 90 days.
Target has a standard no-solicitation rule at its properties, as it seeks to provide a "distraction-free shopping experience for its guests." Exemptions to this policy were previously made for the Salvation Army red kettles and bell-ringers outside Target stores during the holidays through Christmas. In 2004, however, Target asked the organization to explore alternate methods to partner with Target. Target donates to local Salvation Army chapters through its grant program and annually to the United Way of America (the Salvation Army is a member of the United Way coalition).
In 2005, Target and the Salvation Army created a joint effort called "The Target/Salvation Army Wish List," where online shoppers could donate goods to the organization for Hurricane victims by buying them directly from Target.com between November 25, 2005, and January 25, 2006. In 2006, they created another joint effort called "The Target/Salvation Army Angel Giving Tree," which is an online version of the Salvation Army's Angel Tree program; in addition to donating proceeds made from the sales of limited edition Harvey Lewis angel ornaments within Target's stores. During the Thanksgiving holiday of 2006, Target and the Salvation Army partnered with magician David Blaine to send several families on a shopping spree the morning of Black Friday. The challenge held that if Blaine could successfully work his way out of a spinning gyroscope by the morning of Black Friday, then several families would receive $500 shopping certificates. The challenge was completed successfully by Blaine.
During disasters, Target has been a major benefactor for relief efforts. Target provided monetary and product donations during the September 11 attacks; it also donated money for relief efforts for the 2004 tsunami in South Asia and donated $1.5 million (U.S.) to the American Red Cross in the aftermath of Hurricane Katrina in 2005. It also allowed its store properties in the affected area to be used as command centers for relief organizations. It also donated supplies such as water and bug spray. Besides these major disasters, Target also regularly lends support to disasters that are not as well known or only affect a regional area.
Environmental record
Target Corporation agreed to reduce their sales on all materials containing polyvinyl chloride (PVC). Testers found toxic lead and phthalates and large amounts of PVC in toys, lunchboxes, baby bibs, jewelry, garden hoses, mini blinds, Christmas trees, and electronics. Several studies have shown that chemicals in vinyl chloride can cause serious health problems for children and adults. The University of Illinois Medical Center in Chicago states that people who use products containing PVC can become exposed with harmful toxic phthalates and lead, which eventually can become a big contributor with dioxins. Lois Gibbs, executive director of the Center for Health, Environment and Justice stated, "Target is doing the right thing by moving away from PVC and switching to safer alternatives." Other companies reducing the PVC on their shelves include Wal-Mart, Microsoft, Johnson & Johnson, Nike, and Apple.Target stores have been taking environmental measures by reusing materials within their stores and recycling certain products like broken hangers, cardboard, rechargeable batteries, etc. Target is beginning to reduce energy use with energy-efficient storefronts, and reducing waste with recycling programs.
Target released a 13-page report in 2007 that outlined their current and future plans for becoming more earth-friendly according to LEED. Such efforts include installing sand filtration systems for the store's wastewater. Recycling programs will be aimed at garment hangers, corrugated cardboard, electronics, shopping carts, shrink wrap, construction wastes, carpeting and ceiling tiles and roofing materials. All stores in Oklahoma will be partnered with Oklahoma Gas & Electric to exclusively use wind power for all Target stores in order to reduce Carbon emissions. Stores nationwide use only LED and fluorescent lights and low-flow restrooms that reduce waste water by 30%. Some Target stores are installing roof gardens or green roofs, which absorb storm water and cut down on surface runoff, mitigate temperature fluctuations and provide habitats for birds. There are currently four green-roof Target stores in Chicago.
Target carries over 700 organic and alternative products from brands such as Archer Farms, Burt's Bees, and Method Products. They also sell clothes made from organic cotton, non-toxic cleaners, low-energy lighting and electronics, non-toxic and non-animal tested cosmetics, and furniture made from recycled materials. , Target has been offering reusable shopping bags as an alternative to disposable plastic bags. Target gift cards are made from corn-based resins. All of the stores' packaging is done with a modified paperboard/clamshell option and has goals for phasing out plastic wrap completely.
In collaboration with MBH Architects, Target's first "green" building was a 100,000+ square foot Target store built in 1995 in Fullerton, California. It was a part of the EPA Energy Star Showcase for its use of skylights that cut the original energy consumption by 24% with a 5-year payback. Target and MBH Architects were awarded the "Green Lights Partner/Ally of the Year Award".
Target Forensic Services
In 2006, The Washington Post revealed that Target is operating two sophisticated criminal forensics laboratories, one at its headquarters and the other in Las Vegas. Originally, the lab was created as an internal need for the company to investigate instances of theft and fraud and other criminal actions that have occurred on its own properties. Eventually, the company began offering pro bono services to law enforcement agencies across the country. Target's Forensic Services has assisted agencies at all levels of government, including federal agencies such as the United States Secret Service, Bureau of Alcohol, Tobacco and Firearms and the Federal Bureau of Investigation. The labs have become such a popular resource for law enforcement that Target has had to restrict its assistance to violent felonies.
Criticism
Practices that cause some concern include lack of a living wage certification, lack of labor unions, and Target's contribution to urban sprawl. Liza Featherstone, contributing editor to the "The Nation" magazine and author of Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart, stated the following in an interview.
In addition to Target's lack of labor unions, several employees have stated that, during new employee training sessions, videos and lectures included strong anti-union messages. Often, managers have threatened employees with losing their job if they are caught trying to organize a union, similar in fashion to Wal-Mart's practices.
In 2002, the company was alerted to sporting caps and shorts having the number "88" embroidered on them. This number has been used by known white supremacist groups as slang for "Heil Hitler". A customer informed the company of the offensive merchandise. Target did not pull the merchandise or issue public apology until the Southern Poverty Law Center echoed its concern and the media began reporting on the issue.
In 2004, the company's decision to bar the Salvation Army from soliciting donations at its stores generated much negative publicity (see Philanthropy section above). In addition, Target refuses to let Toys for Tots collect toys on their properties. Target said that in the face of rising requests from other charities, it could no longer justify the exemption it was making for the Salvation Army.
In 2005, Planned Parenthood protested Target policy involving a conscience clause that allows pharmacists to refuse to dispense the emergency contraceptive, Plan B Levonorgestrel, based on religious beliefs, as long as the employee ensures that the prescription is filled by another pharmacist in a timely manner. Defenders of Target applaud the company for upholding the employee's freedom of conscience, while critics feel this policy fails to uphold the pharmacist's duty of care.
In November 2005, the American Family Association criticized Target and other retailers for not using the word "Christmas" in its holiday advertising. Target responded by introducing words like "Christmas" and "Hannukah" on its website and in-store signage, and by showing holiday ads that included the phrase "Merry Christmas".
In July 2007, Target Corporation was fined $120,000 by the United States Environmental Protection Agency for selling outlawed aerosol confetti string. The EPA said that the fine stemmed from Minneapolis-based Target's sale of Horrible Spooky String, a children's sprayable confetti product that violates the Clean Air Act because it contains banned hydrochlorofluorocarbons (HCFC). Such chemicals deplete the ozone layer and their sale or distribution in "non-essential" products has been prohibited in the United States.
Diversity
Target defines diversity as individuality. The company state this individuality may include a wide spectrum of attributes such as personal style, age, race, gender, ethnicity, sexual orientation, language, physical ability, religion, family, citizenship status, socio-economic circumstances, education and life experiences.
The Target employee diversity program is called "The Strength of Many. The Power of One." It specifically seeks to work with vendors and contractors that are owned by minorities or women.
It has long extended domestic-partner benefits to straight, gay, and lesbian employees. It has received an 86 on the Human Rights Campaign Corporate Equality Index Score. In addition, Target Corporation was named one of the "100 Best Companies for Working Mothers" in 2004 by Working Mother.
The National Association for the Advancement of Colored People has repeatedly given Target failing grades on its annual Economic Reciprocity Initiative report card, a measure of the company's "commitment to the African-American citizenry". In 2003 and 2005, the NAACP has rated Target an "F" on this report; in 2004, Target was rated a "D-". In 2006, when Target was asked why it didn't participate in the survey again, a representative explained, "Target views diversity as being inclusive of all people from all different backgrounds, not just one group."
Major sponsorships
Target owns the naming rights to the Target Center and the forthcoming Target Field in Minneapolis. It also sponsors the NASCAR and is a long-time sponsor of the IndyCar racing teams of Chip Ganassi Racing. In the 2002 and 2003 NASCAR seasons, the #41 Chip Ganassi Target car was driven by Jimmy Spencer; for the 2004 season and 2005 seasons, Casey Mears drove the car. In 2006, Reed Sorenson took over the #41 when Mears moved to a different Chip Ganassi car on the same team. Sorenson still drives the car and Target has also had some major sponsorship time on the Ganassi Racing #40 car with Dario Franchitti and Jeremy Mayfield who subbed for the injured Franchitti. The 40 team has since been shut down.
Target Corporation is also a major sponsor of the annual Minneapolis Aquatennial, where it hosts the Target Fireworks Show. It is the largest annual fireworks show west of the Mississippi River, and the fourth largest annual fireworks show in the United States.
Target also sponsors the Museum of Modern Art in Manhattan, New York. It hosts Target Free Friday Nights, providing to all visitors free admission to the museum during Fridays after 4 p.m. A similar Target-sponsored program at the Los Angeles County Museum of Art called "Free after Five" provides free admission in the evening throughout the week. Tuesdays are free at the Museum of Contemporary Art in Chicago, Illinois, courtesy of Target. In its hometown of Minneapolis, Target sponsors the Target Free Thursday Nights at the Walker Art Center, where admission is free after 4 p.m. as well as in its sister-city Saint Paul hosting "Target Third Free Sundays" at the Minnesota Children's Museum. In Boston, Massachusetts, Target sponsors $1 Friday Nights at the Boston Children's Museum from 5:00 - 9:00.
Target is the founding sponsor of the Weekend America radio program.
Target often supports major awards shows such as the Oscars, Emmys, Grammys, and the Golden Globes.
See also
Career Opportunities National Federation of the Blind v. Target Corporation Target (Australia)
External links
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