Target Is Getting Ready To Compete Against Walmart And Amazon — Too Late In The Game?

Target is getting ready to compete against Walmart and Amazon in the new retailing landscape of unified commerce, which involves merging online and offline sales and integrating all channels and exchange touchpoints.

"Target is finally ready to compete seriously with Walmart and Amazon with its new Target Circle 360 membership, which gives free two-day shipping and free same-day delivery on orders over $35," Melissa Cid of MySavings.com, told International Business Times. "This was the missing puzzle piece to catapult Target to face off against its competition truly."

"Target also introduced a new brand called Dealworthy that boasts over 400 new products, with some under $1," she continued. "This new budget-friendly store brand will surely attract money-conscience customers who are fatigued by the constant onslaught of higher prices they've experienced in the past three years."

Cid's comments follow Target's fourth-quarter and full-year report this week, which topped Wall Street estimates and confirmed the Minneapolis retailer's comeback.

"Our team's efforts changed the momentum of our business, further improving our sales and traffic trends in the fourth quarter while driving profitability well ahead of expectations," said Brian Cornell, chairman and chief executive officer of Target Corporation.

David Russell, Global Head of Market Strategy at TradeStation, had a couple of praises for Target's comeback and Target's CEO. "Target struggled with discounts after the pandemic because they bulked up on too much reopening merchandise," he told IBT.

"But they spent a few quarters clearing inventories and have regained pricing power," Russell said, adding, "Their new focus on value and affordability also seems to drive traffic, which could help avoid more price cuts and support margins. People are still annoyed about inflation, and Brian Cornell is trying to exploit that. Thanks to the healthy job market, the target could be in an interesting spot with the Consumer feeling better."

Alex Juday, Head of International Growth & Global Agency Business, also liked Target's recent earnings report. "Target data from 2023 paints a favorable trend for all parties involved, " he told IBT. "CTR trended up significantly through the entire year. The big winner with that improvement is ultimately the Consumer. CTR is a fantastic indicator of how well Target and Advertisers put the right products in front of the right consumers at the right time."

"Target's recent performance reflects the resilience of a well-managed brand," added Greg Silverman, the Global Director of Brand Economics. "For years, it has valued the relationship with its customers—never segmenting its customer base into a preferred group and even calling its shoppers' guests."

"They have focused on a value equation that allows the brand to be accessible to the broadest market possible, " Silverman continued. "And their offerings are clear - with a unique sense of design, fashion, value, and utility - customers know what they are getting."

Over the years, Target has become a "one-stop-shop" retailer, allowing shoppers to buy everything, from groceries to medicine and apparel. In addition, it has combined online shopping with offline shopping. Customers order merchandise online and pick it up either inside the local stores or on the curbside.

Still, Jeanel Alvarado, Founder & CEO of RetailBoss, is skeptical of Target's recent earnings report. "Target has created a mixed picture with its latest earnings report, suggesting a retail landscape with challenges and resilience lies ahead for the American department store," she said.

"While Target noted a victory by beating earning-per-share forecasts, the overall annual revenue decreased slightly," she added.

Jenn Szekely, President at Coley Porter Bell, is skeptical about Target's strategy to compete against Walmart and Amazon in the new retailing landscape.

"Target is following in the footsteps of the success achieved by membership programs from competing brands, such as Amazon and Walmart. But these competitors are already ahead of Target – so the question remains if customers in today's economy will pay for 2-3 retailer memberships the way they do in the streaming game," Szekely said.