Target CEO has message customers will love

Target has long positioned itself as a stylish, affordable alternative to big-box rivals. But in recent years, that reputation has taken a major hit. 

Slowing sales, shifting consumer behavior, and internal missteps have weighed on Target’s performance — and shaken confidence among shoppers and investors alike.

The numbers tell a lot of the story. In its most recent earnings report, Target posted a 1.5% drop in quarterly revenue to $30.5 billion, while comparable sales fell 2.5% during the critical holiday quarter.

That financial strain has coincided with a more intangible challenge: a loss of connection with the company’s core customers. 

New CEO Michael Fiddelke has acknowledged that the company has struggled to clearly define its identity, contributing to declining trust among shoppers. 

“We weren’t clear enough about who we are as a company,” Fiddelke said during his first town hall, as reported by Reuters.

Against that backdrop, Fiddelke is now laying out a path forward to regain customers’ trust.

Target CEO shares a message customers will welcome

Fiddelke knows that as CEO of Target, he has his work cut out for him. But it seems he’s ready to embrace that challenge and understands what needs to be done for the company to clean up its act. 

“While we have real work to do, we are clear on who we are, our unique place in retail and in the hearts of our guests,” Fiddelke said. 

He also laid out four priorities the company intends to focus on in the near term:

• Better merchandising that merges design, style, and value 
• An improved guest experience
• Stronger technology
• An investment in employees to strengthen the company’s team and communities

“We’re committed to earning your trust and making every visit feel worth it,” Fiddelke specifically promised Target customers. But whether he’s able to uphold that commitment remains to be seen.

What Target needs to do to turn things around

If Target wants to regain its footing, it will need to translate Fiddelke’s strategy into tangible improvements that customers can see and feel.

First, execution in stores will be critical. Fiddelke has already signaled investments in store experience, including staffing and layout improvements. That’s a necessary move, since in recent years, customers have complained about messy aisles and disorganization.

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Target’s merchandising also needs to deliver at a time when consumers are spending their money more cautiously. 

Target’s ability to blend affordability with trendy products has historically been one of its biggest advantages. Reestablishing that balance, especially in discretionary categories like apparel and home goods, will be essential.

But most importantly, Target needs to rebuild trust among consumers. And that goes beyond cleaning up stores and improving inventory. 

The good news is that Target isn’t starting from scratch. It still has strong brand recognition, a large store footprint, and a loyal (albeit smaller than previous) customer base. But it also has to accept that its reputation has soured.

As retail expert Neil Saunders said, “Target is not a terrible retailer. But its days as the poster child of the retail sector have long since faded. A relative lack of newness in stores, a somewhat muddled position when it comes to price and value, and inconsistent execution are all damaging growth.”

So clearly, there are some big hurdles to jump. But if the company is able to bring Fiddelke’s plans to life, there’s a good chance it will win customers over and prove that its best days aren’t behind it.

Maurie Backman owns shares of Target.

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