Target Corporation (Target) operates as a general merchandise retailer selling products to its guests through its stores and digital channels.
The company operates as a single segment that includes all of its operations, which are designed to enable guests to purchase products seamlessly in stores or through its digital channels. Nearly all of its revenues are generated in the United States (U.S.). The vast majority of its long-lived assets are located within the U.S.
Strategy
Target delivers...
Target Corporation (Target) operates as a general merchandise retailer selling products to its guests through its stores and digital channels.
The company operates as a single segment that includes all of its operations, which are designed to enable guests to purchase products seamlessly in stores or through its digital channels. Nearly all of its revenues are generated in the United States (U.S.). The vast majority of its long-lived assets are located within the U.S.
Strategy
Target delivers on the company’s purpose of helping all families discover the joy of everyday life through its curated, multi-category assortment, outstanding value, and a team that’s centered on care for each other, its guests, and communities. The company’s stores, digital experience, fulfillment services, and loyalty ecosystem also play a critical role in differentiating Target and bringing its purpose to life.
The core elements of the company’s strategy include delighting with newness, style, and value by strengthening its owned brands portfolio, curating leading national brands, and expanding the breadth and depth of signature partnerships; delivering value by providing everyday low pricing and leveraging promotions and its loyalty ecosystem, Target Circle; opening new stores, updating existing stores, and enhancing its digital experience to reach more consumers and provide a reliably convenient, easy, and inspiring shopping experience; transforming its supply chain for increased efficiency, speed, capacity, and reliability across its network; beinging a favorite discovery destination by making it easy for consumers to discover Target’s products and experiences across different channels and touchpoints, including its stores, its mobile app and website, and social platforms; and expanding its capabilities, such as its Roundel advertising business, to leverage its assets and enhance the guest experience. The company’s strategy continues to leverage stores as fulfillment hubs, with stores fulfilling more than 96 percent of total sales.
Merchandise
The majority of the company’s stores offer a wide assortment of general merchandise and food. Most of the company’s stores larger than 170,000 square feet offer a variety of general merchandise and a full line of food items comparable to traditional supermarkets. The company’s digital channels include a wide merchandise and food assortment, including many items found in its stores, along with a complementary assortment sold by Target and third parties. The company manages its business across the six core merchandise categories.
A significant portion of the company’s sales is from national brand merchandise. Approximately one-third of the company’s Merchandise Sales come from its owned and exclusive brands, including, but not limited to, the brands listed below:
Owned Brands: A New Day, All in Motion, Art Class, Auden, Ava & Viv, Boots & Barkley, Brightroom, Bullseye's Playground, Casaluna, Cat & Jack, Cloud Island, Colsie, dealworthy, Embark, Everspring, Favorite Day, Figmint, Future Collective, Gigglescape, Good & Gather, Goodfellow & Co, Hearth & Hand with Magnolia, Heyday, Hyde & EEK! Boutique, JoyLab, Kindfull, Kona Sol, Made By Design, Market Pantry, Mondo Llama, More Than Magic, Opalhouse, Open Story, Original Use, Pillowfort, Project 62, Room Essentials, Shade & Shore, Smartly, Smith & Hawken, Sonia Kashuk, Spritz, Sun Squad, Threshold, Universal Thread, up & up, Wild Fable, Wondershop, and Xhilaration.
Exclusive Adult Beverage Brands: California Roots, Jingle & Mingle, SunPop, Casa Cantina, Photograph, The Collection, Headliner, Rosé Bae, and Wine Cube.
The company also sells merchandise through periodic exclusive design and creative partnerships, and shop-in-shop experiences, with partners, such as Apple, Disney, Levi's, and Ulta Beauty; and generates revenue from in-store amenities, such as Starbucks, Target Cafe, and Target Optical. CVS Pharmacy, Inc. (CVS) operates pharmacies and clinics in its stores under a perpetual operating agreement from which the company generates annual occupancy income.
The company’s global sourcing operations, which operate from offices in 12 countries around the world, are an important component of its business strategy. The company’s global sourcing team identifies, evaluates, and partners with suppliers and vendors from around the world to procure merchandise (most notably for its owned brands) and make it available to its guests through the company’s stores and digital channels.
Other Capabilities
The company generates revenue through a variety of other sources, including Roundel, which provides advertising services to vendors and other third parties; credit card profit sharing related to its Target Circle Card program; its third-party digital marketplace—Target Plus; membership fees; and others.
Customer Loyalty Programs
The company’s guests receive a 5 percent discount on nearly all purchases and receive free shipping at Target.com when they use their Target Debit Card, Target Credit Card, Target MasterCard, or RedCard Reloadable Account (collectively, RedCards). The company also seeks to drive customer loyalty and trip frequency through its Target Circle program which offers guests instant discounts and Target Circle Rewards redeemable on future purchases. In March 2024, the company announced changes to Target Circle, including the integration of Target Circle Card and the addition of a Target Circle 360 paid membership option. Among other benefits, Target Circle 360 members receive access to same-day delivery and the company’s fastest available shipping option with no additional markup or fees.
Distribution
Most merchandise is distributed to the company’s stores through its network of distribution centers. Common carriers ship merchandise to and from the company’s distribution centers. Vendors or third-party distributors ship certain food items and other merchandise directly to the company’s stores. Merchandise sold through its digital channels is distributed to its guests through guest pick-up at its stores, via common carriers (from stores, supply chain facilities, vendors, and third-party distributors), and same-day delivery via its wholly owned subsidiary, Shipt, Inc. (Shipt). The company’s stores fulfill the majority of the digitally originated sales. The company allows it to offer guests a suite of same-day fulfillment options, such as Order Pickup, Drive Up, and Shipt.
Intellectual Property
The company’s brand image is a critical element of its business strategy. The company’s principal trademarks, including Target, its ‘Expect More. Pay Less.’ brand promise, and its ‘Bullseye Design’, have been registered with the U.S. Patent and Trademark Office.
Geographic Information
Nearly all of the company’s revenues are generated within the U.S. The vast majority of the company’s property and equipment is located within the U.S.
History
Target Corporation was founded in 1902. The company was incorporated in Minnesota in 1902.