Target Corporation Digital Strategy Improvement Project

Executive Summary 

The instant project seeks to improve the digital strategy of Target Corporation by recommending tangible, operative, and cost-effective strategic alterations. Target is doing well as a company and has managed to establish one of the most powerful brands in US retail. However, the company faces stiff competition from both traditional brick and mortar stores and a threat of replacement from online stores. This project paper begins with an evaluation of Target, generally but with an emphasis on digital marketing, including through SWOT analysis. Based on the analysis, the company seems to be thriving, but it can do better. Target also faces stiff competition from traditional brick and mortar players like Walmart and modern online and digital marketing experts like Amazon. The fact that Target faces competition from varying retailers reflects the indecisiveness and indeterminacy in its marketing strategy generally and more particularly regarding digital marketing. Digital marketing is the future of retail and should not play a supplementary role in a traditional marketing stratagem. 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. The company should also use social media to control its online narrative by pushing positive information and countering any negative publicity. These recommendations will increase sales and reduce costs contemporaneously, thus increasing profits and providing an early return for the investment the company makes.

Competitive Environment Analysis 

Strengths  A pricing strategy that attracts customers.  Ample physical presence through over a thousand stores.  Wide assortment of merchandise  A powerful and easily recognizable brand.	Weaknesses  Weak digital strategy and poor online presence.  Low-profit margins due to an attractive pricing strategy.  Limited international presence.  Costly advertising strategy based on a traditional approach.
Opportunities  Opportunity for online retail expansion  Opportunity for online marketing expansion  Expanding in the international market.	Threats  Competition by powerful players both online and in brick and mortar stores.  Rising labor costs.  Risk of replacement by online retailers.

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 (Sims, 2018; Bolton & Shankar, 2018). However, Target has so far been able to hold its stead against the competition, although there is much room for improvement.

What the SWOT Analysis Says about Digital Marketing 

According to the SWOT analysis above, Target is not doing well regarding digital marketing. All the strengths that have made Target a successful retailer, such as brand name, physical presence, and pricing, have no connection to the company’s digital strategy. On the other hand, among its main weaknesses is a limited presence online, more so on social media. Further, the company’s primary opportunities include room for expansion into the online market. Finally, Target faces the real threat of replacement by online retailers who focus on digital marketing. The primary revenue stream for Target Corporation is retailing, yet according to Grewal, Motyka & Levy (2018), the future of retailing is in online platforms. Therefore, for Target adjusting to capitalize on digital marketing goes beyond improvement as it involves the survival of the company itself. Target is currently thriving due to brand power that it has built for over a century and under a different marketing dispensation. Without proper investment in digital marketing, brand power will gradually peter away.

Key Digital Marketing Recommendations 

The first 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.

The second main recommendation is seeking to constantly control the narrative about the company on the internet, generally, more so on social media. The fact that social media is cheap, easily accessible, and relational can also be a disadvantage. A single disenchanted or malicious social media enforcer can mutilate the reputation of a company within a short time (Dahl, 2018). Similarly, a malicious or misconceived rumor can also wreck the reputation of even a brand as powerful as Target. Finally, organizations make mistakes leading to genuine negative publicity. It has taken Target over a century to build its reputation painstakingly. The modern digital world carries an active risk of losing brand power through online-propagated negative publicity. Target should invest in seeking to alleviate such an eventuality. For a start, Target should have a team that carefully scans social media platforms for negative information about potentially troublesome topics. The team should then seek to control the narrative in order to minimize the potential damage caused by negative publicity (Dahl, 2018). In instances where negative publicity comes from mistakes within the company, seeking to transparently solve the problem can transform the potential crisis into a positive public relations event.

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 (Dahl, 2018). 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. Since Target is a retailer, its target market is exponentially wide and varied. A single narrative cannot effectively communicate with the varied potential target market. For example, the younger generation may be easier to reach through the flamboyance common on Instagram, while the older generation might be easier to reach through the more serious Twitter platform. Similarly, YouTube may be a good avenue for advertising children’s toys. The use of different avenues will communicate the same message to different audiences in ways that are relatable to those specific audiences (Dahl, 2018).

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). Humor would especially be suitable in the recommendation in the segment above regarding the control of the narrative that would potentially jeopardize the company’s reputation. Ordinarily, Target would need to compete for the attention of the target audience with the entity driving the false narrative. Through humor, Target can win over the audience then introduce a new favorable twist to the negative publicity. Further, in cases where the negative publicity comes from a mistake in the part of the company, self-deprecating humor can change the narrative and limit damage to the brand.

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 et al., 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 (Dahl, 2018). 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 (Sims, 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 

From a financial perspective, the totality of the recommendations made herein has positive implications for the company in terms of expenditure, outcomes, and return on investment. First, a digital marketing strategy is overall more cost-effective than an analog marketing strategy that utilizes traditional media such as TV, billboard, and paper-based mailing lists (Larson & Draper, 2019). Reducing the use of traditional media such as TV, billboards, and newspapers will limit costs for the company. Such monies can be invested in the new online marketing campaign. However, online marketing, including social media, also carries costs. The costs include hiring human talent for the development and implementation of a unique and effective social media marketing plan. Further, strategies such as search engine optimization (SEO) and paid promotions of some social media platforms cost money (Dahl, 2018). Target will still need to make a substantive investment in the new move to enhance its digital marketing. However, the advantages of social media marketing, as outlined above, will increase the efficacy of ads through higher rates of audience buy-in and conversion. These higher rates will ensure a return on investment for the company within five years or less. 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, Target needs 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.

Final Recommendations 

The company should gradually by definitively adopt a fully digitalized marketing strategy.

Digitalization should include abandoning traditional advertising platforms for the internet generally and, more specifically, social media.

Social media ads should run on different platforms targeting varying audiences.

Target should invest in search engine optimization (SEO) in search engines and paid promotions on social media.

Target should seek to develop interpersonal relationships with its customers on social media and utilize humor in its ad campaigns.

Target should develop strategies to control narratives about the company on social media.

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.

Dahl, S. (2018).  Social media marketing: Theories and applications . Thousand Oaks, California: Sage.

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.

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.

Sims, S. (2018). Acquisitions: Walmart vs Amazon. Finance Undergraduate Honors Theses. 46 . Sam M. Walton College of Business.