October 17, 2014
Target looks for a home run with new Fenway store
There isn’t going to be any World Series celebration this year around historic Fenway Park, but Bostonians do have something to look forward to next year other than spring training. Target is building a CityTarget store — the first of the company’s urban concept on the East Coast — a homerun trot away from Fenway’s Big Green Monster.
Typically, CityTarget locations are smaller than standard Target stores to fit tighter urban spaces. But the new Boston location will be twice the size of other CityTargets, covering 160,000 square feet over four floors. The store will have a lobby on the first floor and a stock room on the top. Shoppers will take escalators and elevators to get to merchandise on the second and third floors.
As with its other locations in Chicago, Los Angeles, Portland, San Francisco and Seattle, the new store will feature groceries to drive store traffic while passing on items such as lawn furniture that don’t make a lot of sense for city dwellers. Products such as dog food will be sold in smaller bags to accommodate apartment living.
Finding the right spot was critical for the retailer. According to a Boston Business Journal report, Target said no to two other locations last year, including the former Filene’s building.
Kamau Witherspoon, Target’s senior director of store operations, told The Boston Globe that the busy area and close access to a train stop made the Fenway location ideal for the company.
- Target tries new, bigger strategy for Fenway store – The Boston Globe (tiered sub.)
- Target’s First East Coast CityTarget Store Will Be in Boston – Boston Magazine
- Target goes big with Boston CityTarget near Fenway Park – Minneapolis/St. Paul Business Journal
- Target turns down two potential CityTarget sites in Boston – Minneapolis/St. Paul Business Journal
- Target to tackle the big city – RetailWire
BrainTrust
Recent Discussions
Discussion Questions
What do you think of Target’s approach to opening urban locations? Will opening a larger store work for or against Target in Boston?
Poll
It’s not about the proximity to Fenway Park, it’s really about the huge population of college students and young apartment dwellers surrounding this store. My daughter graduated from Boston University, and she would have been thrilled to have a CityTarget within walking distance—the nearest stores were a few miles away and not easily accessible by “T” (much less with a car). It makes a lot of sense for Target to plan its site selection carefully (the old Filene’s site downtown would not have made as much sense), and I don’t see a four-level store being an issue at all.
As a local, I’m excited to check this store out. There’s a lot of interesting development happening now near Fenway. Wegmans is moving in nearby as well.
Smaller format stores are a challenge for the big box operators on several levels. Getting to sales productivity and ROIC benchmarks that move the needle for the company is hard, and gets harder the smaller the store is. And without adequate space for a competitive food and consumables offer, it’s tough to yield the footfall expected of high-quality urban locations. But Target is better known for the “discretionary” side of its buildings, so there will be a learning curve.
Logistics get harder too. Tough to move an 18-wheeler through narrow, congested streets.
Still, the demographics and competition almost necessitate a shift to smaller, urban stores.
While urbanites and suburbanites have many differences, they also have many similarities making urban locations an unrealized opportunity for big box guys like Target. A challenge to overcome is not only the lack of space in most urban dwellings to store large-quantity and big-size purchases, but also the ability to get them home. Delivery, doormen hailing cabs, and so on are part of the solution, but where to put purchases still remains. Our NYC building recently installed four-by-four-by-eight foot storage units for rent in the basement—you would have thought I had died and went to heaven when I snagged 128 cubic feet of additional space.
The key is not that it is near Fenway Park as much as it is the proximity to the colleges and young people in the area. Ballpark goers are not looking for a Target to shop. They are looking for a restaurant before the game and a bar after. Target does not fit either.
As a [former] local, I think Dick has it exactly right. It’s not about Fenway—it’s about Boston University and its students.
Given the huge population of students there, a store that’s larger than small but smaller than large will help the company a lot.
I think the only thing that makes this store special to the Target system is that it isn’t a standalone building. The area that they are putting the store in is a great location with lots of potential business from the consumers who live in the area. The demographic is right. It’s not a downtown location that closes after everyone goes home from work. I like the approach Target is taking with this location. I’m sure there are many more locations like it in Boston, DC, New York, etc.
What’s not to like? I only suggest that Target try to limit the range of items offered to what’s practical for the city dweller—leaving out lawn furniture and tools is smart. Take a look at the urban drug store that sells electric fans, electronics, paper towels and toys—they’ve been the city dweller’s discount store in a smaller footprint for years!
Target already has urban stores. What is more important to figure out is if they are refining the store format, City Target or not, as they open more stores.
1. I haven’t checked out City Target branded stores, as opposed to the store in Washington DC on 14th St. in the Columbia Heights neighborhood, which was one of the earlier forays into cities, although the store has been open for something like 6 years now.
When they were developing it, they were unwilling to have it served with “less parking,” and as a result more than 1/3 of the spaces in the structure are never used.
Are they better on demanding less parking with other urban stores now?
2. I don’t know Boston, or the other City Target locations, but could they have closer to a more full line grocery in an urban location that is maybe underserved by other supermarkets. OTOH, maybe the margins aren’t that great.
3. Target has an advantage over Walmart on entry into urban locations because of their reputation as being design forward, whereas Walmart’s brand image is saving money/catering to the poor. So Target is fun.
4. They could have edgier sub-departments (like the leased departments back in the day, say music, for Kmart) for more urban stuff like music or bicycles, etc.
I think there is more that they can do with the City Target format than they are doing so far.
5. As people have commented already, location is key and they have mentioned the proximity of the Boston location to college campuses. There has been talk of a new Target in DC, locating downtown.
I’d argue that isn’t as good a place to locate, similar to why Target didn’t pick Downtown Crossing in Boston, because it’s better to locate closer to denser residential areas.
The point isn’t locating in the city, but serving city residents, and residents that are less likely to drive to big box stores otherwise.
As several people have suggested, it’s all about the nearby college and professional populations.
MSBJ’s description of the store as having 135K NSF gives a little clearer picture of what the store will look like (i.e. a 2-story layout, one floor up from the street). Having the stockroom on another floor seems like it would give logistical problems, but I’m assuming they’re planning for that (hopefully better than they did in Canada). Or maybe I’m getting bogged down in details.
As for their overall approach, I’m much more interested in a pair of comments—one from the same newspaper last year and one from the Globe—to the effect that the sales in the LA locations are “disappointing” and “(it’s) increasingly difficult to identify sites for full-sized stores in densely populated areas.” Taken together, they suggest the concept doesn’t have much of a future, outside of generating PR releases. Even assuming the first statement is untrue—or will change—and just looking at the second, the same bleak assessment prevails: whatever their merits, “urban” locations aren’t the magic pill Target needs.
I find the business as usual approach we are seeing here from a company with so many front page problems to be very unreassuring for consumers and investors. As for the question, with all of the recent failures I see no reason to expect a success in this effort. This is a lot of money that could be used to repair some badly broken, very large issues.
I think Target’s approach to opening urban locations is quite smart. I frequent the one in Downtown LA, and I have to say, that store is a godsend. In a city like that, it can be difficult to find a place that not only has everything I need (from fresh fruit to new clothes) but also provides ample parking. People love it.
If Target can accomplish this in its new Boston location, I would say the company will hit a home run.
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It’s not about the proximity to Fenway Park, it’s really about the huge population of college students and young apartment dwellers surrounding this store. My daughter graduated from Boston University, and she would have been thrilled to have a CityTarget within walking distance—the nearest stores were a few miles away and not easily accessible by “T” (much less with a car). It makes a lot of sense for Target to plan its site selection carefully (the old Filene’s site downtown would not have made as much sense), and I don’t see a four-level store being an issue at all.
As a local, I’m excited to check this store out. There’s a lot of interesting development happening now near Fenway. Wegmans is moving in nearby as well.
Smaller format stores are a challenge for the big box operators on several levels. Getting to sales productivity and ROIC benchmarks that move the needle for the company is hard, and gets harder the smaller the store is. And without adequate space for a competitive food and consumables offer, it’s tough to yield the footfall expected of high-quality urban locations. But Target is better known for the “discretionary” side of its buildings, so there will be a learning curve.
Logistics get harder too. Tough to move an 18-wheeler through narrow, congested streets.
Still, the demographics and competition almost necessitate a shift to smaller, urban stores.
While urbanites and suburbanites have many differences, they also have many similarities making urban locations an unrealized opportunity for big box guys like Target. A challenge to overcome is not only the lack of space in most urban dwellings to store large-quantity and big-size purchases, but also the ability to get them home. Delivery, doormen hailing cabs, and so on are part of the solution, but where to put purchases still remains. Our NYC building recently installed four-by-four-by-eight foot storage units for rent in the basement—you would have thought I had died and went to heaven when I snagged 128 cubic feet of additional space.
The key is not that it is near Fenway Park as much as it is the proximity to the colleges and young people in the area. Ballpark goers are not looking for a Target to shop. They are looking for a restaurant before the game and a bar after. Target does not fit either.
As a [former] local, I think Dick has it exactly right. It’s not about Fenway—it’s about Boston University and its students.
Given the huge population of students there, a store that’s larger than small but smaller than large will help the company a lot.
I think the only thing that makes this store special to the Target system is that it isn’t a standalone building. The area that they are putting the store in is a great location with lots of potential business from the consumers who live in the area. The demographic is right. It’s not a downtown location that closes after everyone goes home from work. I like the approach Target is taking with this location. I’m sure there are many more locations like it in Boston, DC, New York, etc.
What’s not to like? I only suggest that Target try to limit the range of items offered to what’s practical for the city dweller—leaving out lawn furniture and tools is smart. Take a look at the urban drug store that sells electric fans, electronics, paper towels and toys—they’ve been the city dweller’s discount store in a smaller footprint for years!
Target already has urban stores. What is more important to figure out is if they are refining the store format, City Target or not, as they open more stores.
1. I haven’t checked out City Target branded stores, as opposed to the store in Washington DC on 14th St. in the Columbia Heights neighborhood, which was one of the earlier forays into cities, although the store has been open for something like 6 years now.
When they were developing it, they were unwilling to have it served with “less parking,” and as a result more than 1/3 of the spaces in the structure are never used.
Are they better on demanding less parking with other urban stores now?
2. I don’t know Boston, or the other City Target locations, but could they have closer to a more full line grocery in an urban location that is maybe underserved by other supermarkets. OTOH, maybe the margins aren’t that great.
3. Target has an advantage over Walmart on entry into urban locations because of their reputation as being design forward, whereas Walmart’s brand image is saving money/catering to the poor. So Target is fun.
4. They could have edgier sub-departments (like the leased departments back in the day, say music, for Kmart) for more urban stuff like music or bicycles, etc.
I think there is more that they can do with the City Target format than they are doing so far.
5. As people have commented already, location is key and they have mentioned the proximity of the Boston location to college campuses. There has been talk of a new Target in DC, locating downtown.
I’d argue that isn’t as good a place to locate, similar to why Target didn’t pick Downtown Crossing in Boston, because it’s better to locate closer to denser residential areas.
The point isn’t locating in the city, but serving city residents, and residents that are less likely to drive to big box stores otherwise.
As several people have suggested, it’s all about the nearby college and professional populations.
MSBJ’s description of the store as having 135K NSF gives a little clearer picture of what the store will look like (i.e. a 2-story layout, one floor up from the street). Having the stockroom on another floor seems like it would give logistical problems, but I’m assuming they’re planning for that (hopefully better than they did in Canada). Or maybe I’m getting bogged down in details.
As for their overall approach, I’m much more interested in a pair of comments—one from the same newspaper last year and one from the Globe—to the effect that the sales in the LA locations are “disappointing” and “(it’s) increasingly difficult to identify sites for full-sized stores in densely populated areas.” Taken together, they suggest the concept doesn’t have much of a future, outside of generating PR releases. Even assuming the first statement is untrue—or will change—and just looking at the second, the same bleak assessment prevails: whatever their merits, “urban” locations aren’t the magic pill Target needs.
I find the business as usual approach we are seeing here from a company with so many front page problems to be very unreassuring for consumers and investors. As for the question, with all of the recent failures I see no reason to expect a success in this effort. This is a lot of money that could be used to repair some badly broken, very large issues.
I think Target’s approach to opening urban locations is quite smart. I frequent the one in Downtown LA, and I have to say, that store is a godsend. In a city like that, it can be difficult to find a place that not only has everything I need (from fresh fruit to new clothes) but also provides ample parking. People love it.
If Target can accomplish this in its new Boston location, I would say the company will hit a home run.