Target Corporation Digital Strategy Improvement

Executive Summary

This article evaluates the current marketing status of Target Corporation, then suggest strategies and makes recommendations for improving its digital strategy. The article begins with an evaluation of Target, generally. The company seems to be thriving but with room for improvement. It also faces stiff competition from traditional players like Walmart and modern players like Amazon. The fact that Target faces competition from varying retailers reflects the indecisiveness of its marketing strategy. To remedy the indecision, the instant article suggests that Target focuses less on traditional marketing and more on digital marketing. Recommendations include focusing on social media advertising through a combination of engine optimization (SEO) and incorporation of humor. This recommendation will increase sales and reduce costs contemporaneously thus increasing profits.

Competitive Environment Analysis

Target Corporation is a leading national retailer of fashionwear, groceries, and toys in America. As reflected in the SWOT analysis table above, the company has a powerful brand that is easily recognizable in the USA but not internationally. Further, the company, which predates the internet by over a quarter of a century, has a physical presence that is exponentially stronger than its online presence (Bhasin, 2018). However, the company also runs a modestly successful online store. Target presents itself as a combination of an upmarket yet discount store. This presentation has the advantage of fair prices but also a low-profit margin. Straddling the brick and mortar and online market contemporaneously means that Target attracts competition from brick and mortar giants such as Walmart and online players such as Amazon (Bolton & Shankar, 2018). However, Target has so far been able to hold its stead against the competition, although there is much room for improvement.

Key Digital Marketing Recommendations

The two main digital marketing recommendation for Target is to invest more in social media and embrace a relational and interactive online marketing strategy. The two recommendations supplement one another. With Target being over a century old, it still holds on to the traditional marketing approach of broadly disseminating information to the public and hoping that the right message gets to the right target. It is for this reason that Target still embraces traditional one-way marketing approaches such as TV, billboards, and magazine ads. First, Target should focus more on social media as it is an important source of information for commodity products such as fashion and toys (Larson & Draper, 2019). Placing its products and offers online will create a better exposure for the company.

Further, social media is exponentially cheaper as compared to traditional advertising platforms (Larson & Draper, 2019). The second recommendation involves a combination of interacting with the target market and using social media as an avenue f/.or marketing research. Target can respond to the comments its customers make on social media, thus creating interpersonal bonds with the client. It can also use such responses as data about its products and targeted market.

Key Strategies Going Forward

The first digital strategy going forward is to utilize different social media platforms such as Facebook, Twitter, Instagram, and YouTube. Target should ensure that each of the sites carries the same message but in a way that is relatable to the different audiences that frequent these platforms. Message coordination would ensure that the company does not send conflicting information about its products. However, the variation of delivery systems would ensure that Target reaches a wider audience. The second key strategy would be to incorporate humor in its social media campaigns. Target’s audience as a retailer is exponentially wide and even with the use of different platforms, its audience will still have differences in taste, age or preferences. Humor is an effective common ground that Target can use to draw the attention of its varying target audience (Djambaska, Petrovska & Bundalevska, 2016).

Expectations from the Recommendations

When Target limits traditional advertising, it will have increased funds to invest in social media advertising, mainly through Search engine optimization (SEO). SEO will increase the number of people who get to see Target ads (Larson & Draper, 2019). The second strategy of utilizing humor will then increase the clink-in rate since the humorous messages will be attractive to the target audience (Djambaska, Petrovska & Bundalevska, 2016). The increased exposure caused by these two factors will lead to higher rates of conversion and by extension higher sales for the company. Secondly, fast fashion is an important component of Target’s product base. In fast fashion, getting information to the customers about a product at the earliest possible time increases sales. The strategy of cultivating digital relationships with customers means that Target will be able to inform its loyal customers about new fashion merchandise. These relationships also increase the propensity for repeat business, thus rapidly increasing sales. Finally, effective digital marketing will improve Target’s capability to fend off its competitors, both online and in brick and mortar stores. The combination of the effects above will increase growth by more than 10% in the next five years.

Current Marketing and/or Digital Marketing Strategies versus Competitors

Target competes poorly with its main competitors Amazon and Walmart, respectively. Target straddles both traditional markets and the modern online retail market (Bolton & Shankar, 2018). Similarly, Target is also a straddles when it comes to its overall marketing strategy. The retailer presents itself as high-end and low priced contemporaneously. By comparison, Walmart has elected to focus on low-pricing and brick and mortar stores. On the other hand, Amazon focuses on relatively higher prices for high-end online retail including rapid delivery services. Finally, Walmart focuses on traditional marketing while Amazon focuses on digital marketing (Bolton & Shankar, 2018). The two competitors are exponentially different from one another but they have picked a lane and stuck to it with a relatively high rate of success. However, Target is straddling between digital technology and traditional marketing. Due to the indecision, Target has been less effective than its competition.

Proposed Changes

Target needs to pick a side, and based on the analysis above, the better option is digital marketing. Whereas the company can retain its high-end for low-cost outlook, it needs to abandon traditional marketing and focus on digital marketing. The proposal for digital marketing in this context is all-inclusive. For a start, Target should commence focusing on online retailing with a view of eventually converting its brick and mortar stores into a chain of warehouses. Current trends show that the future of commodities such as high fashion is in online retailing (Grewal & Motyka, 2018). Secondly, Target should abandon almost all forms of traditional advertising and shift to social media advertising using a relational approach (Larson & Draper, 2019).

Financial Implications of the Recommendation

The recommendations made hereinabove will have two main financial implications both of which are positive. First, the strategic changes will exponentially reduce the cost of marketing and advertising at Target (Larson & Draper, 2019). Abandoning traditional media such as TV and newspapers for social media costs much less for the company. Further, despite the lower cost, the company will have higher revenues which will result in higher profits. Therefore, the company stands to benefit financially from the proposed strategies.

Conclusion and Final Recommendations

Target is an over a century-old retailer that is still thriving despite major changes in its external environment. The company has gradually embraced some changes to adjust to the current market situation, including adopting limited digital marketing. However, the changes in the market have moved faster than Target has reacted, hence the need to speed up the digitization of its technology. To free revenues for digitization, Target should abandon its overly expensive traditional marketing platforms. In exchange, the company should focus on social media marketing. Specifically, the company should invest in SEO to increase ad exposure and humor to increase click to open rates. The increase in reaching out to the right audience with the right message on social media will exponentially increase sales in the company. Finally, Target should commence a long-term project of fully shifting to online retailing.

References

Bhasin, H. (2018, December 4). Marketing strategy of Target Corporation - Target Marketing strategy. Retrieved from https://www.marketing91.com/marketing-strategy-of-target-corporation/

Bolton, R. N., & Shankar, V. (2018). Emerging retailer pricing trends and practices. In  Handbook of research on retailing . Edward Elgar Publishing.

Djambaska, A., Petrovska, I., & Bundalevska, E. (2016). Is humor advertising always effective? Parameters for effective use of humor in advertising.  Journal of Management Research ,  8 (1), 1-19.

Grewal, D., Motyka, S., & Levy, M. (2018). The evolution and future of retailing and retailing education.  Journal of Marketing Education ,  40 (1), 85-93.

Larson, J., & Draper, S. (2019).  Internet marketing essentials: a comprehensive digital marketing textbook . Idaho Falls, Idaho: Stukent Inc.