“We’ve also launched meal solutions, which is a meal in a bag for under $15,” Gomez says. “They’re great recipes like sesame teriyaki chicken stir-fry. They’re really good, and they’re really easy to make. But what our guests are saying with Good & Gather is they love newness.”
The retailer plans to launch hundreds of new Good & Gather items this fall.
“My favorite one is a frozen flatbread with arugula and prosciutto, that comes with a balsamic vinegar to drizzle on top once it’s baked,” he said. “We’re going to continue to bring new items under the Good & Gather brand, as there’s a lot of runway for our owned brands as we work to meet guests’ evolving needs.”
Good & Gather joins other new owned brands such as the indulgence-oriented Favorite Day (items priced under $15) and Kindfull, a pet product line. Favorite Day has more than 700 items, while Kindfull features more than 50 items. Gomez says that the company is launching dozens of new items this fall under the Favorite Day brand.
“We have an outstanding food scientist and recipe development team, as well as packaging, marketing and sourcing teams,” Gomez said. “And when these products launch, they are, to me, the epitome of Tar-zhay. They’re delicious, they’re on trend, and they’re incredibly affordable.”
Of course, providing an elevated grocery experience requires specialized team members to merchandise the retailer’s food and beverage departments, and that’s why the company has brought in a growing squad of what it calls food and beverage coordinators.
These employees “are a game-changer for Target,” Gomez says. “They bring food and beverage expertise. But even more than that, they bring food and beverage passion. Many of them oversee a handful of stores and they partner closely with that store, helping them understand how to manage and grow a food and beverage business, while elevating our standards and meeting guest need. They bring a tremendous amount of expertise to our guests and the teams they lead.”
In September, the retailer, which has about 350,000 employees who are trained to provide an elevated service experience, said that it plans to hire more than 100,000 seasonal workers for the holidays and give employees more hours. Target, which raised its starting wage to $15 an hour last year, is also offering employees debt-free college tuition programs, among other benefits.
Target’s strategic thinking led the company to invest in omnichannel optimization long before COVID-19, and that strategy has paid off in spades over the past year. Target was ready when the pandemic hit and e-commerce demand accelerated, with the majority of its food and beverage assortment available via several contactless pickup services.
“Prior to the pandemic, we were making investments in our same-day services,” Gomez observes. “When the pandemic hit, we were set up to deliver on our guests’ needs to create a safe and easy shopping experience.”
In August, the retailer said that its Q2 sales grew 9.5% to $25.2 billion, while comps increased 8.9% and digital comps jumped 10%, building on record growth of 195% last year. Target’s digital channel is led by same-day services such as Order Pickup, Drive Up and Target-owned Shipt, which Target reported during its Q2 2021 earnings to have grown 55% this year, on top of more than 270% in Q2 2020. Target specifically credited Drive Up with double-digit growth in its fresh categories in the second quarter. This spring, Target expanded its same-day service assortment to include adult beverage items at more than 1,200 of its stores across the country.
“We’re winning in digital because we don’t force our guests to shop on Target’s terms; instead, Target serves guests on their terms,” Gomez says. “There’s no minimum order requirement, no arbitrary pickup times, and when you click ‘I’m here in the parking lot,’ we’ll see you in two minutes or less — it’s that easy.” Target’s online investments haven’t come at the expense of physical stores, however, which remain an integral part of the retailer’s strategy. In fact, Target says that digital engagement drives more engagement in stores, providing more opportunities to surprise, delight and inspire guests.
“That frictionless experience is why we continue to grow our digital business,” Gomez said. “Even as guests are shopping instore more often, we continue to see guests use our same-day services in record numbers. And we’ll continue to expand on those fulfillment options to help our guests do their Target run safely and easily, however they choose to shop.”
Following a pandemic pause on store openings last year, the company still managed to remodel more than 130 stores and open 30 new stores in 2020. This year, Target aims to complete about 140 remodels and open as many as 40 new stores. After experimenting over the years with large and small formats, the retailer has adopted a more localized strategy, ranging from a planned 132,000-square-foot store in Yonkers, N.Y., to a planned 12,000-square-foot store in Ann Arbor, Mich. To add capacity to Target’s fulfillment operation and further scale its stores-as-hubs model, the company opened two new distribution centers this year and has signed leases for four more “sortation” centers. These facilities collect online orders from local stores various times a day and sort them into efficient routes for carrier delivery. This pulls the sorting activity out of store back rooms so it can be consolidated more efficiently at one facility, giving store teams more time and space to fulfill additional orders, while reducing the load on external carriers. This process increases store fulfillment capacity and speeds delivery to guests, making it pivotal to the Target value proposition.
“We recognize there’s plenty of work in front of us,” Gomez admits. “We’re definitely in the midst of this journey, but our food and beverage business has a ton of momentum right now, and our team is not resting on our laurels. We are committed to rewarding the trust our guests have placed in us by raising the bar on ourselves, so that we can deliver an experience that only gets better and better.”