Editor's Letter: In Praise of Desperation
On March 10, my Facebook feed was blanketed with one topic—not Hillary Clinton’s email controversy, not a chipmunk flying on the back of a woodpecker, but Target’s layoff of 1,700 people, mostly from corporate headquarters. Living in Minneapolis, I followed via social media Target employees wringing their hands waiting for layoffs to hit their department. Then the eulogies came in—for the Target of yore, for talented colleagues cut loose—as the city felt the weight of nearly 2,000 white-collar workers suddenly unmoored.
Target’s recent struggles—the data breach, the massive Canadian fail, the general loss of direction—are a help to other retailers. Any time a competitor stumbles, you have the opportunity to swoop in and grab their customers, right? But the proximity I have to this latest story of retail struggle made me realize just how vulnerable every single retailer is.
Our cover story, which begins on p. 20, chronicles the strengths, struggles and strategies of your cross-channel competitors, and it reveals one big theme: Everyone is scrounging.
Take restaurants. As our reporter Amanda Baltazar explores, research firm NPD Group expects the entire restaurant industry—including convenience stores—to grow less than 0.5% per year for the next 10 years. That’s not much bandwidth for c-stores to storm the foodservice space, is it? C-stores will grow in sales only by getting a consumer to visit their store instead of Taco Bell or Panera—who are both doing everything they can to steal share, too.
But wait, the c-store industry is in the midst of a major evolution, right? Grounded in rebuilds, bigger stores and modernized designs? That evolution of the shopping experience, it appears, has become table stakes. Drug, dollar, grocery, mass—everyone is evolving the shopper experience with fresh aesthetics, better sightlines and lighting and engaged wellness/culinary/beauty “ambassadors” (i.e., employees) ready to shepherd the shopper through their prescription/grocery/cosmetics journey.
We could critique Target’s struggles with an air of confident relief that it’s them and not us. But the truth is, they are now hungry for a turnaround. They’re now required to be ambitious and nimble, and I urge you to think like you’re floundering, too.
Think like Target’s new CEO Brian Cornell, who is giving his company three years to turn around. Just seven months into the job, he’s already made major changes, including pulling the plug on those Canadian stores and offering free shipping for online orders during the holiday season, plus identifying a few key categories where the company should focus and ones to drop. Are these grasping, desperate attempts of a company that’s struggled in recent quarters, or aggressive, off-with-the-Band-Aid actions of a brand freed of bureaucracy to do whatever it takes? The only answers that matters are the numbers, and fourth-quarter same-store sales were up 3.8%.
It’s a common corporate philosophy to have the drive of a No. 2 player even when you’re No. 1. Why not see what happens when you pretend like you’re dead last? It just might yield some ideas to help chip away share from your competitors. Because every chip helps.