Hardware Retailing

MAY 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://hardwareretailing.epubxp.com/i/815244

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Page 99 of 224

May 2017 | HARDWARE RETAILING 93 Opportunities O • Positive Image: Maintaining its philanthropic efforts and becoming a leader in areas such as gender-neutral bathrooms and fitting rooms give Target a mostly positive reputation as a socially conscious company. • Winning With Innovation: Target's early partnership with Amazon to develop its e-commerce store positions the company as an innovator online. • Small Stores: If Target can make small store formats work, then the company will have the opportunity to expand into upscale urban communities with dense populations and high incomes. Small stores extend the retailer's reach into areas where Super Targets won't fit. • Strategic Partnerships: Enhancing partnerships with other respected companies, such as CVS and Starbucks, allows Target to focus on growing its primary retail business while also making its stores destinations for more than general merchandise shopping. • Celebrity Excitement: Target has generated excitement among shoppers with unique fashion lines developed by celebrity designers. The company has the opportunity to continue building on its track record of forging relationships with famous personalities. • A Changing Retail Landscape: The shuttering of J.C. Penney, Sears, Kmart and other competitor locations provides opportunities for Target to continue improving the customer experience at its stores. Target could appeal to more shoppers and fill holes opening in the retail marketplace. Threats T • Competitive Powerhouses: Amazon and Walmart are massive, with extensive supply chains, efficient sourcing and reputations for selling nearly every product imaginable at the lowest prices. Amazon's growth and convenience make many products difficult for traditional retailers to sell. • Shop-Local Initiatives: Growing consumer interest in supporting locally owned businesses could weaken the appeal of the publicly traded big box. • Data Breaches: Target's 2013 data breach burned customers, and more breaches could weaken the retailer's relationship with shoppers and incur high legal costs. Large companies continue to appeal to hackers. • Political Controversy: Taking political stances on issues such as transgender rights inspires shopper boycotts, which could harm sales. • High Overhead Costs: Target's forays into expensive, high-rent urban markets with small stores may backfire if the stores don't quickly become profitable. • Rapid Changes: Extensive changes within Target, such as employee layoffs, discarded tech projects and sold businesses, could prove to be symptoms of company instability if they don't result in sales growth. • The Economy: If the economy becomes more sluggish or appears unstable, then customers could react by cutting their spending and turning to retailers with reputations for lower prices.

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