Mobile Payments, Digital Push Means Gains in Target’s First Quarter
Target brought out word on its first quarter earnings just a couple days ago, and the news turned out to be quite good.
That’s rare enough in a retailing environment challenged by hesitant shoppers and the constant threat of online retailers, but what’s perhaps more unexpected is just what drove Target’s numbers up: a major push into digital initiatives.
Normally, the first quarter for any business can be tough. It means several bad months for a company like Target; bad weather, bad roads, and not very many reasons to shop all come together. That time between January to, roughly, April or so when the Easter shopping—and as “The Simpsons” once put it in a fashion that still makes me laugh, the Mom-Dad-Grad Gift Corridor—starts to kick in can be painful for businesses.
Target, however, actually increased sales 2.8 percent as compared to the same time in 2014, with e-commerce sales turning in a 37.8 percent boost.
There was also a push made from a less-than-digital endeavor as Target’s signature categories sections made up a growth of double the company average. That’s all good news, and Target—in a show of good common sense—is planning to stick with the winner, so to speak. It’s planning to put a particular focus on its mobile app, and even give some interconnection to those users shopping in the store as well.
Target’s vice president of enterprise strategy, Jamil Ghani, offered up some comment around Target’s near-term future plans back at the end of the fourth quarter, saying “Mobile experience needs to make commerce as easy as possible.” Ghani carried on, noting that the “bricks-and-mobile” strategy, as he called it, was representing four times the number of store visits per year over previous years.
There’s quite a bit of value in combining mobile with brick-and-mortar operations. Brick-and-mortar has one particular advantage that no amount of mobile shopping can counter: immediacy. Sure, that might change if Amazon gets its way with delivery drones, and even then it won’t work on items weighing much more than a couple DVDs.
But for right now, mobile and online shopping can provide the ability to buy anything right now. If you want to take it home, however, you’re buying from a brick-and-mortar outlet or you’re waiting a few days to a week or so for shipping.
That’s an opportunity that brick-and-mortar stores need to capitalize on in order to get the best results; online shopping is often done to get access to better prices and more types of products. But brick-and-mortar can give you a product right now, and that’s a selling point. Target’s demonstrating how the two concepts can work together, and options like ship-to-store can be particularly helpful here.
Still, it’s clear that Target’s had a lot of luck when it comes to digital efforts, efforts that other businesses will likely want to replicate. Turning the otherwise sluggish first quarter into a gain is no small feat, and it’s one that might give Target better results in the months to come.