The Coronavirus pandemic is accelerating the retail apocalypse and increasing consumers' reliance on a few giants. Companies like Walmart and Target are uniquely well-positioned to weather the storm, and even thrive in the thunder. The massive corporations function as one-stop-shops for everything you could ever need— hand sanitizer, a rotisserie chicken, sweatpants, cat litter, new sheets, you name it. But with declining foot traffic and Amazon's dominance over e-commerce, traditional retailers need to rethink their digital sales strategies.
đź’Ž Data Digs
Some retailers are practically giving away inventory as customers slow down on spending, but not Target. America's eighth biggest retail corporation has actually been cutting down on discounts.
The average discount dropped 18.53% over the last four months of quarantine. Meanwhile, the product count on Target's website increased by 1.94% from 78.1K to 79.6K, with the average price dipping 5.6% from $45.70 to $43.14. Target seems to be shifting toward a lower overall price point in order to compete in the e-commerce space and attract a wider range of online shoppers.
The retailer is setting itself up to be a consumer favorite by the time fall rolls around. Target recently announced it will join Walmart in shutting its doors on Thanksgiving and will be "stretching out the savings" during October. Stores will offer over 20,000 items for curbside pickup and delivery leading up to the holidays.
⚔️ Big Picture
- Target is lowering its average price point, but cutting discounts.
- The retail giant is ramping up its digital operations with a growing product inventory.
- Target's first quarter comparable sales grew 10.8%. In-store comparable sales increased 0.9%, while digital comparable sales grew 141%.
- Same-day services (Order Pick Up, Drive Up and Shipt) surged 278%.
- As traditional retail businesses move online during the pandemic, Amazon will face its first significant competition in years.
⚡ Get Ahead
Target shoppers are used to filling up their carts with little regard for cross-company price comparison, lured by bright lighting and aisles of options. That addictive impulse to overbuy is a well-documented trend, coined the "Target Effect" and memed to infinity. The retailer will have to make up for the loss of in-store experience and customer "hauls."
The renewed focus on e-commerce and lower overall pricing might prove to be successful for big retailers like Target. In the game of online shopping, consumers can compare savings with just a few clicks, so the lower the price point the better.
This strategy is also replicable for smaller businesses. Because of the giant push towards e-commerce, the industry has rushed forward years in a matter of weeks. There are now a myriad of tools like Shopify and Privy to help bring your business online and not just survive, but thrive in a world where no one is walking into stores.