News at Smith

The Rebranding of TargetExpress

Aug 07, 2015

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SMITH BRAIN TRUST -- Storefront signs that recently went up for the grand opening of TargetExpress near the University of Maryland will make a quick exit. The Minnesota-based retailer announced on Aug. 4, 2015, that it will call all of its stores just Target, regardless of size or format. This means the small Baltimore Avenue site across the street from campus, which dominates the ground floor of a new six-story student housing project, will carry the same name as the full-size Target about three miles away in Hyattsville, Md.

Nationwide, the policy change will affect nine TargetExpress stores currently operating or under construction. CityTarget stores, a larger version of the compact format, will also be renamed.

Smith School marketing professor Jie Zhang says the Target rebranding makes sense from at least one perspective. “Many retailers, including Target, are pursuing an omnichannel strategy that blurs the lines between online and traditional shopping,” she says. “They’re probably hoping to create a consumer perception that all Target stores, regardless of their format, can serve consumers’ needs.”

For the strategy to work, Target will need shoppers at its smaller stores to view the company website as an extension of store shelves. This will test the efficiency of Target fulfillment services.

If the UMD students who live above the new  store can go online and shop, and then walk downstairs the next day or within a few hours and pick up their orders, they might overlook the limited assortment on the physical shelves. “Some retailers even promise same-day pickup,” Zhang says. “The goal is to create connections among the different channels.”

Zhang says using a single store name and logo to support the omnichannel strategy has merit, but Target might be two steps ahead of the trend. "Maybe there will be a time five or 10 years down the road when the vast majority of consumers are comfortable with the click-and-collect model,” she says. "But I’m not sure we are there yet."

Until then, Zhang says, Target runs the risk of irritating or confusing shoppers who go to its smaller stores expecting a big-box experience. At less than 15,000 square feet, the Baltimore Avenue store is only one-tenth the size of the average Target. That’s big enough to stock basic groceries, health and beauty supplies, and other student needs. But someone looking for a selection of flat-screen televisions or children’s clothing will be disappointed.

Zhang says maintaining sub-brands for a chain’s different formats can help communicate these differences without hindering the establishment of an omnichannel perception. “It can be a companion strategy,” she says. “It can be something that Target or other retailers utilize above and beyond serving the needs of the surrounding clientele.”

Walmart, for example, uses variations of its main brand at Walmart Neighborhood Markets and Walmart Supercenters. This does not stop Walmart shoppers from going online and buying photographs and other products, and then picking up their orders at the closest stores.

“The potential benefit would be to clearly communicate differences between the store formats, and to more effectively communicate to shoppers that each of the stores is intended to serve a different market situation,” Zhang says.

World’s Smallest Targets

The store at 7501 Baltimore Ave. in College Park is the second-smallest site in Target’s chain.
Size* Location Grand Opening
1. 12,000 Berkeley, CA March 2015
2. 15,000 College Park, MD July 2015
3. 17,000 St. Paul, MN July 2015
3. 17,000 San Francisco, CA October 2015**
5. 18,000 San Francisco, CA March 2015
6. 19,000 South Park, CA October 2015**
7. 20,000 Minneapolis, MN July 2014
8. 23,000 Arlington, VA October 2015**
9. 24,000 Chicago, IL October 2015**
* Rounded to the nearest 1,000 square feet
** Projected opening

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The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.