Shares of Target have seen a significant decline, dropping approximately 67% since their peak in late 2021, with a 35% decrease occurring just this year. On Wednesday, the stock hit a 52-week low, closing at $86.08, down nearly 3%. In light of these challenges, new CEO Brian Fiddelke has prioritized revitalizing Target’s brand and enhancing customers’ shopping experiences both online and in-store.
To initiate meaningful change, Fiddelke emphasized his commitment to strengthening the company’s reputation for stylish, well-designed merchandise. This comes on the heels of Target announcing its most substantial layoffs in a decade, cutting 1,800 corporate jobs. In a bid to reinvigorate its fashion offerings, the company has been sending designers to various events for inspiration, while also refining its online fulfillment strategy to better allocate employees for customer assistance.
During a recent call discussing fiscal third-quarter results, Fiddelke shared that Target is leveraging technology to enhance its product offerings. The company introduced Target Trend Brain, an AI-driven tool designed to help designers spot trending colors and styles, along with synthetic audience models to gauge potential customer responses to new products before they launch.
Target is also adapting to evolving shopping habits by developing a new integration with OpenAI, which will allow customers to shop directly through ChatGPT. Set to launch in beta next week, this feature will enable users to make multiple purchases in a single transaction, grocery shop, and select their preferred delivery methods, including curbside pickup. Future developments will also include personalized shopping recommendations for users.
Despite these innovations, Target faced challenges in retaining customer engagement. The latest quarter reported a 2.2% decrease in store and website traffic, along with a 0.5% drop in average transaction amounts. Comparable sales, an important industry measure, fell by 2.7%. Interestingly, digital sales rose by 2.4%, largely attributed to a remarkable 35% growth in same-day deliveries. This is the third consecutive quarter that comparable sales have declined, highlighting the pressing need for Target to adapt its strategies to improve customer retention and drive sales.
While the company is facing hurdles, the initiatives led by Fiddelke exemplify a proactive strategy aimed at transforming the business to align with modern shopping trends, making it a potentially optimistic outlook for the retailer’s future.