Dive Brief:

• Target is beginning to check off a major item on its to-do list: upgrading stores. The retailer unveiled photos of its store updates last week as part of its promise in March to invest $4 billion annually in remodels, new stores and improvements in online fulfillment.
• In 2021, Target is giving 150 locations a "major glow-up," according to a press release. The updates include modern fixtures, enhanced experiences and the latest updates in health and safety protocols (such as contactless bathroom fixtures and hand sanitizing stations).
• The latest remodeled stores are part of the 800 locations that Target has upgraded over the last four years since Target began planning its brick-and-mortar revamp, the retailer said.

Dive Insight:

Target has centered most of its business around its physical location in recent years.

Throughout the pandemic, Target has been using its brick-and-mortar assets to fulfill orders and provide contactless fulfillment options. In fiscal year 2020, Target's sales through same-day services — such as Order Pick Up, Drive Up and Shipt — have grown by 235%. 

In its latest updates, Target plans to expand and upgrade its Guest Services, Order Pickup and Drive Up areas in an attempt to make them more convenient — a strategy Target Board Chairman and CEO Brian Cornell considered instrumental to building customer loyalty and trust, he said during a call with investors and analysts in March.

At select locations, Target has also begun to incorporate its "shop in shop" experiences in partnership with brands like Ulta, Apple and Disney. 

Target introduced the idea of opening 25 toy shops within stores in partnership with Disney in 2019. Late last year, Ulta partnered with the retailer to open 100 shop-in-shops in Target stores. Then in February, the retailer announced it would roll out mini Apple shops within 17 Target locations. 

The merchandising strategy of opening dedicated shops for other brands and retailers is reminiscent of department stores, from whom Target and other big-box retailers have stolen market share for years.

"The tactic for the company appears to be one of taking a forensic look at certain categories and plotting ways to engineer growth – something it has so far done with the Apple and Ulta partnerships in electronics and beauty, respectively," Neil Saunders, managing director of GlobalData, said in emailed comments regarding Target's fourth quarter results.