Target CEO Cornell places big bet on technology

Talk about getting in front of the news. A week that ends with Walmart's high-profile shareholder meeting began with a flurry of reports from Target (NYSE:TGT), most of which were centered on technology.

Target CEO Brian Cornell's talk at Re/code's Code Conference last week was either coincidental or calculated, but the message was clear—Target is back, following a number of setbacks. Cornell's widely reported talk included topics such as the retailer's future adoption of Apple Pay, the importance of chip-and-PIN cards, competing with Amazon, and a possible delivery partnership with ridesharing app Uber.

He then went on Jim Cramer's CNBC show and described the rapid sellout of the Lilly Pulitzer line as "Black Friday in April." The retailer's hometown paper, the Star Tribune, is even proclaiming this week as "Christmas in June" because Target is offering free shipping on online orders.

All this happened while the media was preparing to ship off to Bentonville, Arkansas, for Walmart's shareholder meeting.

"I want to make sure our guests and our entire organization know how committed we are to digital," Cornell said at the conference. "We put up that 40 percent figure (Target's plan for digital growth in 2015) to show that we're all in. We're bringing in talent and great engineering to elevate the online experience."

Cornell would like to get Apple Pay into Target stores. However, a transition to secure chip-and-PIN credit card acceptance in time for the holidays is a higher priority, Re/code reported. The credit card industry is pushing the new EMV cards as chip-and-signature, but many prominent retailers, including Walmart, have been outspoken critics.

"Down the line we want to accept all the types of payments that our guests want," Cornell said. "But this decision was all about focus. It is a major undertaking to convert to chip-and-PIN, and I decided that we can't distract the team."

Cornell has discussed Apple Pay with Apple CEO Tim Cook. "Once we finish [chip-and-PIN], we'll be open-minded [about other payment systems]," Cornell said.

In an unexpected comment, Cornell gave Amazon credit for popularizing online shopping. "We almost need to say thank you to Amazon. They have taught the American consumer to shop online, but they don't own that relationship. Our most profitable and our most valuable guest is one who shops with us both online and in the store. Once (the guests) experience the store and recognize we can meet their needs online, that relationship really starts to grow."

Target is also open to partnering with Uber for delivering merchandise, the Minneapolis/St. Paul Business Journal reported.

In April, Target created a shopping event through a collaboration with well-known brand Lilly Pulitzer. The launch resulted in a quick sellout that crashed its website. "We had hundreds and hundreds of guests lined up all excited to get in there and shop that collection. Lilly was the 151st collaboration, and we've got more in the pipeline," Cornell said.

This week, Target.com is offering free shipping on all orders with no minimum purchase. The same promotion ran successfully in the fourth quarter, the Star Tribune reported.

When asked why the promotion started in June, spokesperson Eddie Baeb said, "Part of it, number one, is reinforcing our leadership in free shipping. With school winding down and the kickoff of summer, it seemed like this was a good time to do this for our guests."

This Target promotion comes shortly after Walmart announced a pilot program similar to Amazon Prime that will charge $50 a year for unlimited free shipping, the Star Tribune reported.

For more:
-See this Target Bullseye newsletter article
-See this Re/code article
-See this Minneapolis/St. Paul Business Journal article
-See this CNBC article
-See this StarTribune article

Related stories:
Target to roll out RFID price tags this year
Target's $19 million breach settlement with MasterCard falls through
Target makes $1B bet on digital
Target: Mobile is 40% of all digital orders
Target broke digital records this holiday

 

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.