In times when big chain retailers like Walmart, Krogers, Costco reported disappointing growth numbers, Target is one such discount retailer which managed to post strong sales figures.
In Q4, the company saw a strong 5.3% increase in comparable sales. Traffic grew a strong 4.5% year-over-year (y-o-y) and the average transaction amount increased 0.8% y-o-y.
Not just the offline bit, but even the company experienced growth in their digital sales as well. Company’s digital comparable sales grew 2.4% y-o-y, while store comparable sales grew a robust 2.9% y-o-y.
Phew !!!! – Those were some phenomenal growth numbers in a saturated retail market.
But how did Target manage to pull off these strong numbers when stores like target are struggling to even post flat sales numbers ?
There are many secret ingredients that helped Target outdo its competitors but few noteworthy steps are :
- Overhauled its business model with the expansion of small-format stores.
- Revamped its existing stores to make them more customer friendly
- Improved its supply chain and distribution
- Introduce new private labels and brands to attract more customer walk-ins
Now let’s see which all are the top 5 stores like Target that it managed to give a run for their money.
TOP 4 STORES LIKE TARGET
The first in the long list of stores like Target is “Walmart” – The retail giant which has been taking leaps and bounds to transform itself into a technology company.
With over 11,000+ stores and clubs operating under 55 different names in 27 countries, Walmart reported a revenue of $500 Billion in 2018.
Walmart has been able to achieve a proper mix of brick and mortar and online business model.
Not just this, a number of business strategy moves attributed to company’s growth and success and makes it a major competitor of Walmart.
- Adaptability to changing technology
- Offering accessibility of products to customers.
- Offering a wide range of brands and assortments under one roof.
- Superior customer experience.
- Being local
Among different stores like target, Walmart surely tops the list because of the aforementioned reasons.
Many must be unaware but yes Amazon is not just one of world’s biggest e-commerce player, it also has its own retail stores which are currently giving a tough fight to retail behemoth – Walmart.
Understanding the importance of brick and mortar model to win over the grocery market, Amazon acquired Whole foods two years back for a whopping $13.7 Billion !! Yes, that’s the amount Amazon paid to get a strong foothold in the grocery market.
This is not the end but just a beginning ! – Amazon has plans to go all guns blazing to grab the largest piece of the grocery market (pie). Amazon and Whole foods control 4% of the total grocery market (Walmart has 21%)
The company is expecting to drive growth from at least four different sources.
- Friction less checkout – Jeff Bezos wants to revamp the shopping experience and the major driver to help Bezos achieve this dream is Amazon Go. Amazon Go format will roll out to 3,000 locations by 2021, up from 10 today and 50 by the end of 2019.
- Amazon is planning to open a brand new grocery chain, distinct from Whole Foods – The new chain will cater to a boarder target market and will have a different range of products and lower price points.
- Expanding Whole Foods chain – Amazon will be looking to expand its acquired Whole Foods and open up more stores at different locations that would make the delivery of the product easy – Customer service is the name of the game
- New innovation – Amazon is not just regarded as a leading e-commerce company in the world but is also very well known for its technology prowess. Amazon Go, Amazon Fresh pick-up are just few pilot projects that Amazon went ahead which worked wonders for them and the company is counting more on such innovations to make it to the top of the game.
The next in the list of Stores like Target is Costco Worldwide. An American multinational corporation which operates a chain of membership only warehouse clubs.
As of 2015, Costco was the second largest retailer in the world after Walmart, and as of 2016, Costco was the world’s largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine.
Costco has always been a well-respected retailer, but in the world of “new retail” they were starting to fall behind in shopping convenience, in delivering a frictionless online shopping experience. By increasing the usability of online shopping as shown by the almost 40% increase in online sales they just reported, they are clearly coming up to fair value on that dimension.
Costco’s treasure-hunt, in-store sampling, place-to-buy gas physical store environment is what is making the customers visit the store again and again.
The last in the list of Stores like Target is Kroger. There is a reason as to why we chose this company, check out the factors that are going to drive Home Depot in 2019.
Private label: Since its inception, Kroger has been manufacturing its own food and today its portfolio represents 30.5% of all products sold. 83% of the Kroger shoppers prefer buying homegrown brands and the number is increasing.
Stores: Kroger has 2,764 stores worldwide and operates supermarkets, multi-department stores, warehouse clubs and convenience stores under 30 banners. Kroger’s banner mix ranges from catering to high-end urban markets (Mariano’s) to selling in non-food categories (Fred Meyer).
Experiential services: In addition to prepared meals and other now-essential offerings, Kroger’s diversity — in formats and nameplates — enables it to test eateries, cocktail bars, and live music. It operates its own Culinary Innovation Center and introduced a company-run restaurant, Kitchen 1883.
This concludes the article, do leave us a comment if you think there is any other brand that is worthy enough and fits the bill.
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