Target's 'Brick and Mobile' two-app strategy rooted in solving problems

AUSTIN, Texas—Target (NYSE:TGT) is using mobile, not just as means to deliver discounts, but as a way to solve problems for its shoppers and create a more personalized experience that instills loyalty.

That was the message delivered by Target's VP of Product, Alan Wizemann, at RetailLoco, which was held in conjunction with SXSW Interactive. Sponsored by the Location Based Marketing Association, RetailLoco is a one-day event focused on mobile marketing.

Mobile is now critical to Target's growth. In fact, it's so critical that Target CEO Brian Cornell has dubbed the retailer's strategy "Brick and Mobile."

"Mobile is becoming increasingly important to all digital retailers, and given the profile of our guests, it's particularly important for Target, as mobile accounted for more than 40 percent of our digital orders in the fourth quarter," said Cornell during a conference call with analysts. "And notably on Black Friday, 10 percent of our iPhone app revenue was from guests purchasing on their phone while they were simultaneously shopping one of our stores."

To that end, Target is testing and evaluating a variety of mobile programs.

"Not one technology is going to be a solution for us," Wizemann said. However, the plethora of technologies are also a double-edged sword: "There are multiple technologies and integration to multiple apps. You get too much noise, too much static."

Rather than inundating shoppers with marketing messages, Target is choosing to focus on apps and features that solve problems for shoppers, preferably before the shopper realizes there is a problem, Wizemann said.

For Target, that means features that help shoppers navigate large stores, as well as time-saving devices such as organizational tools for creating lists. In-store pickup has proven to be a hit with shoppers—customers made more than 400,000 in-store pickups during the 2014 Black Friday week—and Target is currently testing curbside pickup at a handful of locations in California.
"Some of the testing around that data has been remarkably interesting, [particularly] around the speed point, but we're not sharing that yet," Wizemann said.
Target is testing "endless aisle" applications that will ultimately facilitate order fulfillment in stores and extend the product assortment to the retailer's smaller stores, including Target Express.

"As we move into smaller stores, we want to have the same journey for our guests, the same assortment," Wizemann said. "[Mobile] allows us to turn those screens into a more personalized experience. We can do some pretty amazing things with small-format stores with fulfillment methodologies."

Target currently has two apps: the flagship Target app and the Cartwheel app created to deliver discounts to shoppers in-store. Wizemann said the retailer has begun to integrate components of Cartwheel into the flagship app, but as in most mobile initiatives, Target's dilution of services into two apps may create problems that still need to be resolved.

"Both are leading in the app store from a retail standpoint," he said. "We are finding guests are either in one or the other."

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