The various technologies that Target demonstrated included augmented reality, in-store price scanning, machine vision and artificial intelligence (AI)-powered, voice-controlled ordering, all of which are under development. The most compelling demo of all was a product scanner enhanced with augmented reality that will provide customers with pricing information and tell them whether a product is subject to a REDcard discount as well as whether it contains GMOs, gluten or other specific ingredients.

Notes from Our Target Store Visit

Target organized a visit to one of its stores in downtown Minneapolis in connection with its 2018 Financial Community Meeting this week. The Coresight Research team visited the following departments in the store:

1. Womenswear
2. Beauty
3. Home
4. Order pickup and returns desks
5. Sales associate technology display
6. Electronics
7. Menswear
8. Food

1) Target has refreshed its women’s private-label collection with several new brands (and more are on the way). The Target representative who guided our visit discussed how the company has changed its apparel displays from traditional clothing racks to more attractive modular displays.

Source: Coresight Research

The company’s new private-label women’s apparel brands include:

• Universal Thread (pictured above), whose tagline is “The denim collection that’s true to you.”
• A New Day, whose tagline is “Style that goes wherever you do.”
• JoyLab, with the tagline “For movement that’s always in motion.”

Management made it clear both during the store tour and in the investor meeting that more new private-label brands are in the pipeline. 2) The company has redesigned its beauty department to make products more appealing and accessible. In the beauty department, Target has begun offering free samples of beauty products in order to encourage its customers to experiment and try new items. Target has also done away with traditional rows of shelves in its beauty department, as it has in its home section and other sections, turning racks diagonally to create a different feeling.

Source: Coresight Research

3) Target has also redesigned its home section, which now offers an appealing, curated display of products. The home section features a curated selection of merchandise, which is aesthetically arranged with plenty of free space in between items.

Source: Coresight Research

4) Target has separated its order pickup and exchange desks to save customers time. In the past, Target customers using the buy-online, pick-up-in-store service and those making returns had to wait in regular checkout lines. To save customers time, Target has created separate desks for these services.

Source: Coresight Research

5) Sales associates are now empowered with handheld devices for checkout and placing online orders. Target sales associates now have handheld devices that they can use for checkout on the store floor or to place online orders on behalf of customers (e.g., when a specific size or color is not available in the store).

Source: Coresight Research

6) The breadth of Target’s electronics section rivals that of many specialty retailers. The company representative who was our host on the store tour said that sales of video games and smartphones have been strong, as have sales of connected-home items. The company’s updated electronics department rivals that of many specialty stores and features displays from major cellular carriers as well as wearable devices, TVs and much more.

Source: Coresight Research

7) Target is promoting its new Goodfellow & Co menswear brand. The company representative said that sales of menswear have been strong, as men are becoming more fashion conscious, and that Goodfellow & Co is Target’s new flagship menswear brand. The store also offers adaptive clothing, which is designed for disabled people to be able to put on and take off more easily.

Source: Coresight Research

8) The company has focused on its fresh-food section and has made it more visually appealing. Management mentioned at the investor meeting that the company has hired subject matter experts to manage the various departments in its stores and has put particular focus on fresh-food products.

Source: Company reports

Target Technology Preview

Target also demonstrated for analysts and investors some technologies it is working on, although, unfortunately, attendees were not allowed to take photos. These technologies include:

• A product scanner using augmented reality. This was the most compelling demo, and the scanner works as follows: When a customer holds a smartphone up to a product package, a window pops up with the price and an indicator if a discount is offered for REDcard holders. Users can also use the scanner to identify products with gluten, GMOs, excess sugar and other ingredients that they may be sensitive to.
• A shopping cart with an integrated price scanner. The cart includes an imaging device (not a standard barcode scanner) that customers can use to scan items as they place them in their cart.
• A machine-vision system that alerts employees to of out-of-stocks. This system uses machine-vision technology to alert employees when all units of a specific product category (e.g., apples) have been removed from the shelf.
• An augmented-reality furniture placement tool for mobile devices. Target’s 360-degree shoppable rooms enable customers to visualize its furniture in 3D and click on objects to obtain product information. The new tool enables the customer to use a mobile device to visually place Target’s furniture in her or her home.
• Google Voice ordering. This function enables customers to place orders by voice with a Google Home device. The Target representative said that support for Android and Apple’s Siri were under development.