April 4, 2007
Target Says Yes to Manhattan
Wal-Mart CEO Lee Scott may have given up on ever opening a store in Manhattan, but the same doesn’t hold true for Target.
According to a report by Women’s Wear Daily, Jim Hogan, group vice president for New England at Target, believes his company will not have the same obstacles placed in its path as it eventually moves to open a store in the Big Apple.
Mr. Hogan told an audience at the third annual Retail and Luxury Goods Conference hosted by Harvard Business School that Target has developed the types of relationships with local politicians and labor officials to succeed where its bigger rival has faltered.
That doesn’t mean, he emphasized, that Target will be breaking ground on a new Manhattan site tomorrow. “We’re not going to hurry in there and hurt our brand,” he said.
As to what separates Target from Wal-Mart, Mr. Hogan said, “Wal-Mart is the discount strategy. Target is the differentiated strategy.”
Discussion Question: How is it that Target seems to encounter much less opposition than Wal-Mart when it comes to opening new stores?
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Target does not have the same reputation as Wal-Mart. Wal-Mart may not deserve that reputation but the reputation is there. Target does not have that reputation so opposition is not the same. Target does not always open Super Targets so does not have the same space requirement as Wal-Mart. Target’s strategy is not just low price, but is more of a differentiated strategy focusing on fashion at affordable prices. Therefore, the threat to local businesses in not the same. Brand image makes a difference.
The reason may be partly to do with the discount image Wal-Mart has vs. what Target calls ‘differentiated’, but it has largely to do with employee benefits and morale, which, according to union officials, are not in the best interests of workers. Target, as someone put it, has a softer image. The bulk of Wal-Mart’s customers (low income families) are probably the same people that make up the worker’s unions that are adamantly opposed to Wal-Mart in NYC. This goes back to a parallel discussion here on the largest retail trends as enumerated by Sir Terry Leahy of TESCO; retailers can no longer assume that price value is the largest driver of business in commoditized markets; people still place a lot of importance on corporate image and business values.
Oh Please. Class and culture are the last taboos. The Brookings Institute has schooled us that major metros are increasingly reserved for the affluent. Manhattan is a perfect case in point. The plain fact is that admitting Wal-Mart means admitting a low rent, fly-over state discounter into the nascent Shangri-La that is Manhattan. This is only the first skirmish in the battle for the new Geography of Wealth, which will dictate retail in the future.
Target’s competitive advantage is that it is not number one. It’s second. Even though Target’s lobbying is exemplary and PR is solid, Target would be the target if it were a $300 billion retail super power such as Wal-Mart. Human beings like to support the underdog, the “we try harder.” That’s why the Red Sox are so compelling to so many. That’s why David and Goliath is such a riveting tale.
When you shop at Target, it is easy to see that the many subtle things that make it a better shopping experience than Wal-Mart. Their aisles are wider. The service seems better. The merchandise assortments seem more complete. Their private label merchandise seems more relevant and better displayed. Their signs are brighter and clearer. And yes, don’t I notice a little more lift in the step of their associates?
The word “chic” is mentioned so many times you would think Target invented it. It’s just a nice way to say Wal-Mart customers are considered mostly a blue collar and Target is trying to move above that in some way. What’s really going on is that Target is creating a younger following. Wal-Mart–the next generations. It’s similar to the Pepsi promotion of the 80s and should be just as successful in the long term. That’s why a store in Manhattan has no rush date. When the consumer’s in the right area of NY have been properly conditioned to TNG, then Target should strike.
As a stockholder for decades in both companies, when one passes a parking lot at any time for Wal-Mart or observes active checkout counters, both are busy. Not so many times at Target, and this is confirmed when you look at average sales per store. While Target does a good job with cheap chic, it simply does not generate sales per square foot or overall store sales anywhere near those of Wal-Mart.
If Target goes into Manhattan, its higher retails than Wal-Mart will be even higher.
Are there not already 2 Kmart stores in “chic” Manhattan? When the right location becomes available, Target will grab it. Who knows, it just might be one of those Kmarts or heaven forbid–Lord & Taylor.
When it comes to how employees are treated (wages, benefits, working conditions) Wal-Mart and Target are on par with one another. If Wal-Mart is encountering resistance moving into Manhattan than the same should be true for Target. If it isn’t, one has to ask why?
Jim Hogan of Target hit the nail on the head when he said it will take time to find the right Manhattan location at the right price. Manhattan real estate is at a historical high. New York City zoning allows high square footage retailers very few locations. Getting a variance can take 2 years and often fails, regardless of controversy. Manhattan has ultra-high operating costs, which will make a conventional Target store low- or no-profit. There are 2 ways Target can rationalize a Manhattan location: (1) using zone pricing to get much higher margins that will pay for the excessive operating costs and (2) charge the location’s losses to the cost of raising Target’s profile in the investment community. It’s unlikely the latter is worthwhile, since Target already has a high profile among investors. Consider JC Penney and Nordstrom: they aren’t in Manhattan either, for the same reasons.
In general, Target seems to have a much softer image than that of Wal-Mart. Wal-Mart is known for its high intensity growth plans and shrewd business practices. While I think there is an argument for the fact that there is nothing wrong with this intensity (especially in the eyes of the shareholders), Wal-Mart has taken this one step too far.
Target’s reputation is somewhat softer, especially when it comes to issues such as employee happiness and overall flexibility within the community. In this case, I think New Yorkers may be rewarding that flexibility.
Rumor has it that Target is giving Wal-Mart a real run for their money. Target products are marketed to be of higher quality, while still maintaining a reputation for lower prices. This is just the next step in the trend.
The moral of the story: treat your customers AND your employees with respect as part of a long-term success plan.
Target has done a much better job with PR and marketing themselves as “cheap chic.” However, in the end, Target has Wal-Mart to thank for Target’s positive public perception. As long as Wal-Mart continues to be a perfect target for every special interest group to focus on it leaves Target in the clear. There is no incentive for any group to go after Target when they can go after Wal-Mart and receive more media focus and attention.
I agree with Mark. Wal-Mart has deflected attention from Target. The leader is always the target and Wal-Mart has paved the roads in many areas for Target to follow. Number two is not always a bad position to be in and in this case, probably a preferable place. Target has done a great job of learning from Wal-Mart’s mistakes. New York will be a challenge and an interesting case study to follow.
By its sheer size, Wal-Mart is (ironically) a bigger “target” than Target…for union opponents, government regulators, the press and so on. But it goes beyond the issue of sales volume and clout. Target has done a consistent job for many years cultivating brand differentiation based on “affordable chic.” Its positioning relies on trend and value for mid-market shoppers, not the “lowest common denominator” approach to price and store experience that one associates with Wal-Mart.
While Wal-Mart is trying hard to break out of this box, it has struggled to reposition itself as quickly as expected. Meanwhile, Target has for many years turned a community-friendly face to the markets where it operates, grounded in its longstanding donation of 5% of its pretax profits to charity. Opening a Target store in Manhattan won’t be easy, but its presence is likely to be welcomed there.
Target’s image separates them from Wal-Mart. That is why Target will fit better in New York. As a mother of a daughter previously employed by both companies, I don’t think Wal-Mart fits into the New York lifestyle. Target can improve upon their image to work with New Yorkers. Wal-Mart does not have the patience to work with the sophisticated look/style of most New Yorkers.
And, considering all the information we see and hear about both companies, only one of them can guarantee you they will not close their doors in ten years or less. The last thing any city or state wants is another empty store front.
From the discussion above, it sounds like a modified version of Target–one that exploits the brand’s strengths in cheap chic–would find an audience in the city.
I could also see Target adding to that mix with its Archer Farms private-label specialty foods, frozen and otherwise, which I think are, in some SKUs, every bit as good as Trader Joe’s.
But in general, Target certainly has it all over Wal-Mart. It has long known how to merchandise better. And this past weekend I had an experience that crossed the line from customer satisfaction into customer delight–leading me to believe Target really is treating its people significantly better.
(In contrast, I also witnessed an episode within the Wal-Mart corporation where a supervisor in a department actually used the it’s-not-my-fault excuse on a customer.)
So whether or not Target can make the numbers work, it’s easy to see why the community would be much more receptive to the brand than it would be to a Wal-Mart.
Wal-Mart has the edge in managing logistics, Target has the edge in managing P/R: that these (largely self-serving) “predictions” receive such coverage is proof of that.
As for the costs of operating in Manhattan, let’s not get too carried away…as noted, Kmart already has 2 stores there (one of them, perhaps ironically, in the basement of the former Wanamakers).
It might be “trendy” to have a NYC address or two, and it is the biggest retail market in the country, but given the politics, the high costs of real estate and operating expenses, why should W-M really care? A good store in Evansville, Indiana will probably generate more gross profits any day of the week and there are thousands just like it.
W-M can simply open stores around the blue collar towns and counties and they’ll get plenty of business.
Target has done a remarkable job, but they have struggled mightily with their SuperTarget and the food presentation.
I am home based in the St. Louis market where I am observing a similar development in an upscale suburb. Wal-Mart has been met with resistance but a Target store is being developed close by where homes are large and spacious and incomes are far higher than the regional or national average. Why Target but not Wal-Mart in Manhattan? Well, frankly I believe that Wal-Mart would be a gargantuan success in Manhattan for any number of reasons; however, Target’s acceptance is probably more likely because of the different image that Target has created over the past ten years or so. Target has defined itself as being trendy and more chic than Wal-Mart but more importantly, Target is perceived that way. Wal-Mart has successfully connected with a different message that works phenomenally well. I’m a huge fan of both retail chains because they both have done an exceptional job and both are here to stay for a very long time because they both operate from disciplined strategies that work, and work well.
It’s cheap chic when we buy from Target; plain chic when we oppose Wal-Mart.
If either operator wants a toehold in Manhattan it should look hard at the existing Kmart in mid-town. That multi-level store plunges two stories below 34th Street and Penn Station with no–that’s right zero–parking. Shoppers buy what they can carry home on the subway or taxi. It may wear the same logo, but it’s a different business model than the suburban stores with their vast parking lots full of SUVs.
New Yorkers are not so snobbish that they reject “cheap chic” altogether. The multi-story H&M store on Fifth Avenue in Rockefeller Center is a case in point. But it’s relatively easy to carry clothes home on the bus.
Target will think this through before they act and may only want to be able to put a store in Manhattan. I think this is another great image move for Target, to be known as the gentle giant. A nonthreatening, true partner with its customers. Wal-Mart will always be the villain which is what Target needs to be the hero. You could not write a better script. In the end, Target gets the girl and lives happily ever after in Manhattan.
The End
Target simply does not carry the same baggage as Wal-Mart. Part of this is due to Target’s highly effective merchandising and marketing efforts, and part is due to the missteps of Wal-Mart in the marketplace.
Target will succeed where Wal-Mart cannot, simply by offering a competitive alternative (yes, cheap chic) to the chaos of the Wal-Mart experience.
Mark Hunter is absolutely right about “cheap chic” being the key: Target has a higher chance of success in Manhattan because, like H&M and some others, they represent a knowing wink for New Yorkers–looking great while getting a bargain. Where Target has to watch it–they don’t have the same fast moving trends as an H&M nor the kind of “event driven fashion” that H&M has created with Stella McCartney or Madonna. Their supply chain doesn’t really support such treasure hunts and it fights with the reality that they’re a discounter and need to sell a whole lot of less glamorous stuff (toothpaste and laundry detergent) to be successful. That being said, a lot of New Yorkers should welcome the opportunity to buy those staples at Target instead of at Duane Reade or their local D’Agostinos. What will Target have to balance? Snob appeal–they need to keep their Manhattan store to the highest standards. If they start to feel like a typical discounter they’ll struggle. Snob appeal is what separates their brand from Wal-Mart so preserving their differentiation in look, feel and attitude is critical.
Cheap chic says it all. In the fast world of New York, chic certainly can open a few more doors. Target has managed to make itself into an ‘upscale’ discounter. People are proud to shop there and they have differentiated themselves from Wal-Mart, which has a contentious relationship with communities. Target does not seem to encounter the same issues.
New York is a challenging market operationally. Expensive real estate, difficult zoning and challenging employment issues…they are wise to take their time and do it right.
It’s quite simple: Target in Manhattan just works. Target fits the personality and “psycho-graphics” of the hip NYC crowd better than Wal-Mart ever will. It works because Target’s differentiation is in the merchandise branded with the likes of Michael Graves, Rachel Ashwell, Mossimo Gianalli, Issac Mizrahi, Thomas O’Brien and others. It works because Target has reached the “Tipping Point” and beyond. It works because the customer, sorry I mean “guest,” experience far outweighs that of Wal-Mart.
Target’s platform–merchandising, messaging, the feel, the look, experience–just works for the NYC consumer.
I’m disappointed that the focus is on the “Cheap Chic” aspect of this discussion, since Wal-Mart’s obstacle was not the desire to enter the market, but the inability to enter the market due to pressure from community leaders.
Target if and when it finds the right locale should perform in a STELLAR fashion in Manhattan. Inexpensive fairly swank and sophisticated merchandise in the mecca of swank and sophistication!!! A true no-brainer! The New Yorkers will undoubtedly appreciate the offerings and empty the stores.
Also – the public understanding and “vision” of Target is so different than the maligned WM, and the comparison with H&M is a good one, as well as the mention of “fly over state status” of WM.
And, in your own mind — think of the stores themselves — can anyone REALLY envision a WM supercenter in Manhattan? I am sorry but I can not — but look at the Kmarts that ARE in Manhattan — utilizing multi levels even! Something I have NO DOUBT that Target can adjust to if necessary!
Target will be there — it is a matter of time, and they should do very well.
And — by the way — I hope that Lord and Taylor is ALWAYS—- Lord and Taylor!! A unique and WONDERFUL store that truly seems to be rising and a choice that more than ever, we need to preserve so that we STILL have a choice! I wish Ms. Elfers and her team the very best!
The multi-level Target in Atlanta’s uptown shopping district along Peachtree in Buckhead is always crowded. It has a parking garage and sits right across the street from Saks Fifth Avenue and Nordstrom at posh Phipps Plaza. Not only does it cater to urbanites in Atlanta’s most fashionable zip codes, but to thousands of people who pour uptown to shop and work daily. It has even come to be a type of attraction in its own right; people in the suburbs drag their out-of-down guests there to “experience” the “two story Target” with their “interesting escalators for buggies.” Another case in point is that this is not a Super Target either. Just a regular Target stretched across two floors to fit in an urban blueprint. Will such a concept work in New York? Of course!
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Target does not have the same reputation as Wal-Mart. Wal-Mart may not deserve that reputation but the reputation is there. Target does not have that reputation so opposition is not the same. Target does not always open Super Targets so does not have the same space requirement as Wal-Mart. Target’s strategy is not just low price, but is more of a differentiated strategy focusing on fashion at affordable prices. Therefore, the threat to local businesses in not the same. Brand image makes a difference.
The reason may be partly to do with the discount image Wal-Mart has vs. what Target calls ‘differentiated’, but it has largely to do with employee benefits and morale, which, according to union officials, are not in the best interests of workers. Target, as someone put it, has a softer image. The bulk of Wal-Mart’s customers (low income families) are probably the same people that make up the worker’s unions that are adamantly opposed to Wal-Mart in NYC. This goes back to a parallel discussion here on the largest retail trends as enumerated by Sir Terry Leahy of TESCO; retailers can no longer assume that price value is the largest driver of business in commoditized markets; people still place a lot of importance on corporate image and business values.
Oh Please. Class and culture are the last taboos. The Brookings Institute has schooled us that major metros are increasingly reserved for the affluent. Manhattan is a perfect case in point. The plain fact is that admitting Wal-Mart means admitting a low rent, fly-over state discounter into the nascent Shangri-La that is Manhattan. This is only the first skirmish in the battle for the new Geography of Wealth, which will dictate retail in the future.
Target’s competitive advantage is that it is not number one. It’s second. Even though Target’s lobbying is exemplary and PR is solid, Target would be the target if it were a $300 billion retail super power such as Wal-Mart. Human beings like to support the underdog, the “we try harder.” That’s why the Red Sox are so compelling to so many. That’s why David and Goliath is such a riveting tale.
When you shop at Target, it is easy to see that the many subtle things that make it a better shopping experience than Wal-Mart. Their aisles are wider. The service seems better. The merchandise assortments seem more complete. Their private label merchandise seems more relevant and better displayed. Their signs are brighter and clearer. And yes, don’t I notice a little more lift in the step of their associates?
The word “chic” is mentioned so many times you would think Target invented it. It’s just a nice way to say Wal-Mart customers are considered mostly a blue collar and Target is trying to move above that in some way. What’s really going on is that Target is creating a younger following. Wal-Mart–the next generations. It’s similar to the Pepsi promotion of the 80s and should be just as successful in the long term. That’s why a store in Manhattan has no rush date. When the consumer’s in the right area of NY have been properly conditioned to TNG, then Target should strike.
As a stockholder for decades in both companies, when one passes a parking lot at any time for Wal-Mart or observes active checkout counters, both are busy. Not so many times at Target, and this is confirmed when you look at average sales per store. While Target does a good job with cheap chic, it simply does not generate sales per square foot or overall store sales anywhere near those of Wal-Mart.
If Target goes into Manhattan, its higher retails than Wal-Mart will be even higher.
Are there not already 2 Kmart stores in “chic” Manhattan? When the right location becomes available, Target will grab it. Who knows, it just might be one of those Kmarts or heaven forbid–Lord & Taylor.
When it comes to how employees are treated (wages, benefits, working conditions) Wal-Mart and Target are on par with one another. If Wal-Mart is encountering resistance moving into Manhattan than the same should be true for Target. If it isn’t, one has to ask why?
Jim Hogan of Target hit the nail on the head when he said it will take time to find the right Manhattan location at the right price. Manhattan real estate is at a historical high. New York City zoning allows high square footage retailers very few locations. Getting a variance can take 2 years and often fails, regardless of controversy. Manhattan has ultra-high operating costs, which will make a conventional Target store low- or no-profit. There are 2 ways Target can rationalize a Manhattan location: (1) using zone pricing to get much higher margins that will pay for the excessive operating costs and (2) charge the location’s losses to the cost of raising Target’s profile in the investment community. It’s unlikely the latter is worthwhile, since Target already has a high profile among investors. Consider JC Penney and Nordstrom: they aren’t in Manhattan either, for the same reasons.
In general, Target seems to have a much softer image than that of Wal-Mart. Wal-Mart is known for its high intensity growth plans and shrewd business practices. While I think there is an argument for the fact that there is nothing wrong with this intensity (especially in the eyes of the shareholders), Wal-Mart has taken this one step too far.
Target’s reputation is somewhat softer, especially when it comes to issues such as employee happiness and overall flexibility within the community. In this case, I think New Yorkers may be rewarding that flexibility.
Rumor has it that Target is giving Wal-Mart a real run for their money. Target products are marketed to be of higher quality, while still maintaining a reputation for lower prices. This is just the next step in the trend.
The moral of the story: treat your customers AND your employees with respect as part of a long-term success plan.
Target has done a much better job with PR and marketing themselves as “cheap chic.” However, in the end, Target has Wal-Mart to thank for Target’s positive public perception. As long as Wal-Mart continues to be a perfect target for every special interest group to focus on it leaves Target in the clear. There is no incentive for any group to go after Target when they can go after Wal-Mart and receive more media focus and attention.
I agree with Mark. Wal-Mart has deflected attention from Target. The leader is always the target and Wal-Mart has paved the roads in many areas for Target to follow. Number two is not always a bad position to be in and in this case, probably a preferable place. Target has done a great job of learning from Wal-Mart’s mistakes. New York will be a challenge and an interesting case study to follow.
By its sheer size, Wal-Mart is (ironically) a bigger “target” than Target…for union opponents, government regulators, the press and so on. But it goes beyond the issue of sales volume and clout. Target has done a consistent job for many years cultivating brand differentiation based on “affordable chic.” Its positioning relies on trend and value for mid-market shoppers, not the “lowest common denominator” approach to price and store experience that one associates with Wal-Mart.
While Wal-Mart is trying hard to break out of this box, it has struggled to reposition itself as quickly as expected. Meanwhile, Target has for many years turned a community-friendly face to the markets where it operates, grounded in its longstanding donation of 5% of its pretax profits to charity. Opening a Target store in Manhattan won’t be easy, but its presence is likely to be welcomed there.
Target’s image separates them from Wal-Mart. That is why Target will fit better in New York. As a mother of a daughter previously employed by both companies, I don’t think Wal-Mart fits into the New York lifestyle. Target can improve upon their image to work with New Yorkers. Wal-Mart does not have the patience to work with the sophisticated look/style of most New Yorkers.
And, considering all the information we see and hear about both companies, only one of them can guarantee you they will not close their doors in ten years or less. The last thing any city or state wants is another empty store front.
From the discussion above, it sounds like a modified version of Target–one that exploits the brand’s strengths in cheap chic–would find an audience in the city.
I could also see Target adding to that mix with its Archer Farms private-label specialty foods, frozen and otherwise, which I think are, in some SKUs, every bit as good as Trader Joe’s.
But in general, Target certainly has it all over Wal-Mart. It has long known how to merchandise better. And this past weekend I had an experience that crossed the line from customer satisfaction into customer delight–leading me to believe Target really is treating its people significantly better.
(In contrast, I also witnessed an episode within the Wal-Mart corporation where a supervisor in a department actually used the it’s-not-my-fault excuse on a customer.)
So whether or not Target can make the numbers work, it’s easy to see why the community would be much more receptive to the brand than it would be to a Wal-Mart.
Wal-Mart has the edge in managing logistics, Target has the edge in managing P/R: that these (largely self-serving) “predictions” receive such coverage is proof of that.
As for the costs of operating in Manhattan, let’s not get too carried away…as noted, Kmart already has 2 stores there (one of them, perhaps ironically, in the basement of the former Wanamakers).
It might be “trendy” to have a NYC address or two, and it is the biggest retail market in the country, but given the politics, the high costs of real estate and operating expenses, why should W-M really care? A good store in Evansville, Indiana will probably generate more gross profits any day of the week and there are thousands just like it.
W-M can simply open stores around the blue collar towns and counties and they’ll get plenty of business.
Target has done a remarkable job, but they have struggled mightily with their SuperTarget and the food presentation.
I am home based in the St. Louis market where I am observing a similar development in an upscale suburb. Wal-Mart has been met with resistance but a Target store is being developed close by where homes are large and spacious and incomes are far higher than the regional or national average. Why Target but not Wal-Mart in Manhattan? Well, frankly I believe that Wal-Mart would be a gargantuan success in Manhattan for any number of reasons; however, Target’s acceptance is probably more likely because of the different image that Target has created over the past ten years or so. Target has defined itself as being trendy and more chic than Wal-Mart but more importantly, Target is perceived that way. Wal-Mart has successfully connected with a different message that works phenomenally well. I’m a huge fan of both retail chains because they both have done an exceptional job and both are here to stay for a very long time because they both operate from disciplined strategies that work, and work well.
It’s cheap chic when we buy from Target; plain chic when we oppose Wal-Mart.
If either operator wants a toehold in Manhattan it should look hard at the existing Kmart in mid-town. That multi-level store plunges two stories below 34th Street and Penn Station with no–that’s right zero–parking. Shoppers buy what they can carry home on the subway or taxi. It may wear the same logo, but it’s a different business model than the suburban stores with their vast parking lots full of SUVs.
New Yorkers are not so snobbish that they reject “cheap chic” altogether. The multi-story H&M store on Fifth Avenue in Rockefeller Center is a case in point. But it’s relatively easy to carry clothes home on the bus.
Target will think this through before they act and may only want to be able to put a store in Manhattan. I think this is another great image move for Target, to be known as the gentle giant. A nonthreatening, true partner with its customers. Wal-Mart will always be the villain which is what Target needs to be the hero. You could not write a better script. In the end, Target gets the girl and lives happily ever after in Manhattan.
The End
Target simply does not carry the same baggage as Wal-Mart. Part of this is due to Target’s highly effective merchandising and marketing efforts, and part is due to the missteps of Wal-Mart in the marketplace.
Target will succeed where Wal-Mart cannot, simply by offering a competitive alternative (yes, cheap chic) to the chaos of the Wal-Mart experience.
Mark Hunter is absolutely right about “cheap chic” being the key: Target has a higher chance of success in Manhattan because, like H&M and some others, they represent a knowing wink for New Yorkers–looking great while getting a bargain. Where Target has to watch it–they don’t have the same fast moving trends as an H&M nor the kind of “event driven fashion” that H&M has created with Stella McCartney or Madonna. Their supply chain doesn’t really support such treasure hunts and it fights with the reality that they’re a discounter and need to sell a whole lot of less glamorous stuff (toothpaste and laundry detergent) to be successful. That being said, a lot of New Yorkers should welcome the opportunity to buy those staples at Target instead of at Duane Reade or their local D’Agostinos. What will Target have to balance? Snob appeal–they need to keep their Manhattan store to the highest standards. If they start to feel like a typical discounter they’ll struggle. Snob appeal is what separates their brand from Wal-Mart so preserving their differentiation in look, feel and attitude is critical.
Cheap chic says it all. In the fast world of New York, chic certainly can open a few more doors. Target has managed to make itself into an ‘upscale’ discounter. People are proud to shop there and they have differentiated themselves from Wal-Mart, which has a contentious relationship with communities. Target does not seem to encounter the same issues.
New York is a challenging market operationally. Expensive real estate, difficult zoning and challenging employment issues…they are wise to take their time and do it right.
It’s quite simple: Target in Manhattan just works. Target fits the personality and “psycho-graphics” of the hip NYC crowd better than Wal-Mart ever will. It works because Target’s differentiation is in the merchandise branded with the likes of Michael Graves, Rachel Ashwell, Mossimo Gianalli, Issac Mizrahi, Thomas O’Brien and others. It works because Target has reached the “Tipping Point” and beyond. It works because the customer, sorry I mean “guest,” experience far outweighs that of Wal-Mart.
Target’s platform–merchandising, messaging, the feel, the look, experience–just works for the NYC consumer.
I’m disappointed that the focus is on the “Cheap Chic” aspect of this discussion, since Wal-Mart’s obstacle was not the desire to enter the market, but the inability to enter the market due to pressure from community leaders.
Target if and when it finds the right locale should perform in a STELLAR fashion in Manhattan. Inexpensive fairly swank and sophisticated merchandise in the mecca of swank and sophistication!!! A true no-brainer! The New Yorkers will undoubtedly appreciate the offerings and empty the stores.
Also – the public understanding and “vision” of Target is so different than the maligned WM, and the comparison with H&M is a good one, as well as the mention of “fly over state status” of WM.
And, in your own mind — think of the stores themselves — can anyone REALLY envision a WM supercenter in Manhattan? I am sorry but I can not — but look at the Kmarts that ARE in Manhattan — utilizing multi levels even! Something I have NO DOUBT that Target can adjust to if necessary!
Target will be there — it is a matter of time, and they should do very well.
And — by the way — I hope that Lord and Taylor is ALWAYS—- Lord and Taylor!! A unique and WONDERFUL store that truly seems to be rising and a choice that more than ever, we need to preserve so that we STILL have a choice! I wish Ms. Elfers and her team the very best!
The multi-level Target in Atlanta’s uptown shopping district along Peachtree in Buckhead is always crowded. It has a parking garage and sits right across the street from Saks Fifth Avenue and Nordstrom at posh Phipps Plaza. Not only does it cater to urbanites in Atlanta’s most fashionable zip codes, but to thousands of people who pour uptown to shop and work daily. It has even come to be a type of attraction in its own right; people in the suburbs drag their out-of-down guests there to “experience” the “two story Target” with their “interesting escalators for buggies.” Another case in point is that this is not a Super Target either. Just a regular Target stretched across two floors to fit in an urban blueprint. Will such a concept work in New York? Of course!