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Target's Three-Step Strategy for Fighting Amazon and Walmart Paying Off





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Target has been fighting two wars recently. One against Amazon online, and another against brick and mortar gorilla, Walmart.

And it's winning.

"Target has every reason to be failing right now," says equity analyst John Zolidis. "The company is up against a trend away from shopping in stores. & Nbsp; . & nbsp; The weather is always bad. & nbsp; Yet, Target is reporting items that exceed those of most other retailers. & nbsp; The company is reporting a positive inflection in margins. & nbsp; It is beating analyst estimates and its outlook appears secure. "

 

That's music in the hears of Wall Street Bulls that have sent Target's higher, ahead of Amazon's and Walmart's YTD.

Target Beats Walmart and Amazon

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How did Target do it? With a three-step strategy, which aligns the company's capabilities and resources with its corporate goals in the new retail landscape.

First, it's positioning. Target has narrowed its market focus to its core customers – young families, according to Zolidis. "Target is not trying to be all things to all people," he says. Like Walmart, that is, which has expanded the scope of its product offerings to match Amazon.

"Rather, TGT is focusing on its core customers, which are young families," he continues. “Target's strategy is to offer an assortment that is tailored to this group's needs, at low price, and differentiated and augmented by a broad selection of private label goods, especially in discretionary apparel and home categories.”

Company Total Revenues Operating Margin Qtrly Revenue Growth Number of Stores
Target $ 76.2B 5.67% 5.00% 1,844
Walmart $ 515.64 B 4.25 1% 4769
Amazon $ 241.55B 6.17 17 500 *

* Whole Foods
Source: Finance.yahoo .com 5/30/2019

Second, it's investing in technology and major improvements to raise capabilities to provide better services. " Target is benefiting from its $ 550-million acquisition of a grocery delivery startup Shipt Inc. in 2017, "says Haris Anwar, Senior Analyst at global financial markets platform Investing.com . “The retailer is now offering consumers the option to order online and pick up in store.”

Then there is the streamline of its brick and mortar operations, and large remodeling. "When it comes to brick-and-mortar operations, Target is benefiting from an improved supply chain, its efforts to smartly remodel stores and create new brands," adds Anwar. The retailer has also been quick to grab the customers of some big brands that failed to survive in this cut-throat environment, such as Toys “R” Us. ”

Third, it's innovation – Target has launched new product lines. “Target has also been successful in making a difference when it comes to fashion,” adds Anwar. “It has launched new brands for intimates, sleepwear and household essentials, and plans to add another label for beach and pool products. These initiatives are making the retailer standout when compared to Walmart. "

Zolidis is bullish for Target's future. "Post 1QFY19, we think Target's outperformance on the top line is harder to ignore," he says. “Meanwhile, margins are inflecting positively, reflecting the company's multiple years of investment and positioning.

Gallery: Women Investors Of The 2019 Midas List

As for the company's shares, they are cheap.

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Target has been fighting two recently. One against Amazon's online giant, and another against brick and mortar gorilla, Walmart

And it's winning

"Target has every reason to be failing right now," says equity analyst John Zolidis. “The company is up against a trend away from shopping in stores. Its largest competitors are spending aggressively to take share. The weather is always bad. Yet, Target is reporting comps that exceed those of most other retailers. The company is reporting a positive inflection in margins.

That's music in the hears of Wall Street Bulls who have sent Target's shares higher, ahead of Amazon's and Walmart's YTD.

Target Beats Walmart and Amazon

How did Target do it? With a three-step strategy, which aligns the company's capabilities and resources with its corporate goals in the new retail landscape.

First, it's positioning. Target has narrowed its market focus to its core customers – young families, according to Zolidis. "Target is not trying to be all things to all people," he says. Like Walmart, that is, which has expanded the scope of its product offerings to match Amazon.

"Rather, TGT is focusing on its core customers, which are young families," he continues. "Target's strategy is to offer an assortment that is tailored to this group's needs, at low price, and differentiated and augmented by a broad selection of private label goods, especially in the discretionary apparel and home categories."

Company Total Revenues Operating Margin Qtrly Revenue Growth Number of Stores
Target $ 76.2B 5.67% 5.00% 1,844

Walmart
$ 515.64 B 4.25 1% 4769

Amazon
$ 241.55B 6.17 17 500 *

* Whole Foods
Source: Finance.yahoo .com 5/30/2019

Second, it's investing in technology and major improvements to raise capabilities to provide better services. "Target is benefiting from its $ 550-million acquisition of a grocery delivery startup Shipt Inc. in 2017," says Haris Anwar, Senior Analyst at global financial markets platform Investing.com. "The retailer is now offering consumers the option to order online and pick up in store. ”

Then there's the streamline of its brick and mortar operations, and large remodeling.” When it comes to brick-and-mortar operations, the target is benefiting from an improved supply chain, its efforts to smartly remodel stores and create new brands, ”says Anwar. The retailer has also been quick to grab the customers of some big brands that failed to survive in this cut-throat environment, such as Toys“ R ”Us.”

Third, it's "Target has also been successful in making a difference when it comes to fashion," adds Anwar. "It has launched new brands for intimates, sleepwear and household essentials, and plans to add new products. call for beach and pool products. "Zolidis is bullish for Target's future." Post 1QFY19, we think Target's outperformance on the top line is harder to ignore, "he says." Meanwhile, marginal are inflecting positively, reflecting the company's multiple years of investment and positioning, while finding the target is really well. ”

As for the company's shares, they are cheap. 19659077] Gallery: Women Investors Of The 2019 Midas List

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