Just imagine if you were a product manager for Target stores. You would be responsible for the success of a brand that has over 1,800 stores sprinkled throughout suburban areas everywhere. However, you would have recently bumped into some problems. Sales at your stores have just taken a dip for the first time in a couple of years. It’s starting to look like you need to take some steps to change things up and get more people to come to your stores if you want your product manager resume to keep looking good. What are you going to have to do as a product manager to get things back on track?
The Challenges Of Being Target
One of the biggest challenges that retail stores like Target are facing is that they need to find ways to appeal to shoppers. More and more of the shoppers that they want to appeal to are made up of millennials. These are the very same shoppers who are now spending their time buying more things online instead of heading out to shopping at a store. Attempting to compete with e-tailers is not something that traditional bricks-and-mortar have been very good at in the past.
Target only has to take a look at their biggest competitor, Walmart, to get a good understanding of what won’t work for them. In just the past year, Walmart has shuttered 100 novel smaller stores that they had created recently in order to attempt to boost traffic. Instead, Walmart has decided to focus more on their very large SuperCenters and Neighborhood Markets which are grocery stores. Walmart had decided to open the stores that they have now shut in suburban and rural locations. This may have been one of the reasons why they ended up not appealing to new customers.
One of the things that the Target product managers need to realize is that in order for one of Target’s new stores to be successful, they are going to have to sell the right mix of items. The right mix consists of selling everyday essentials that cause people to come to your store on a regular basis. Additionally, you want to sell high-end merchandise which is where you’ll end up turning a profit and cause your customers to come and look over your selection. What this means is that the target product managers are going to have to make sure that no matter what they end up doing, they will have to sell enough high margin items like clothes to make any new store profitable.
Target’s New Plan For Success
So what can the Target product managers do to help their firm start to grow again? What the product managers have decided to do is to go small. Target is going to be opening smaller stores in key locations: dense urban areas and college towns. The stores that Target currently operates are located in suburban areas and as of late they have been experiencing declining foot traffic and sales. The new stores that Target will be opening will be much smaller than their existing stores are: in some cases less than 15% of the size of an existing Target store.
The thinking behind the new stores that that the Target product managers are planning on opening is that they will be able to customize what is in the store in order to cater to the tastes of the people who will be shopping at the store. Target believes that it has become very good at opening its large format stores. Now what they are going to have to do is to rethink everything when it come so the new format smaller stores. An average Target store currently occupies 145,000 square feet. The newer stores are planned to occupy less than 50,000 square feet. Target will be looking to take over locations that were once occupied by grocery stores and neighborhood retailers.
The Target product managers have great plans for their new format stores. Not only do they want to sell things like existing Target stores do, but they also want to use these new sites to allow their customers to use the new stores as a pick-up location for online orders. The thought is that this will allow their customers to no longer have to be home in order to receive a package from either UPS or FedEx. The people who study the retail market space have some concerns. They believe that Walmart has a better distribution system than Target does and so they wonder how Target will go about keeping their new stores stocked. The thinking is that with their smaller footprint, the new format stores will have limited space in their backrooms and will therefore require more frequent resupplies.
What All Of This Means For You
The Target product managers have a real problem on their hands. Fewer people are visiting their stores and spending less when they do come. This means that the firm’s profits are starting to take a dive and pressure is starting to mount on the product mangaers to look at their product manager job description and come up with new ways to create more revenue. Something has got to change.
Target knows who they want to come and shop at their stores. The millennials are starting to make up more and more of their target customer base, but they are not visiting the stores. Instead, they are shopping online. Target needs to avoid making the same mistakes that Walmart has. Instead, what the Target product managers are planning on doing is opening new smaller footprint stores. These stores are going to be located in dense urban areas and in college towns. The new stores will be smaller: perhaps only 15% of the size of a current Target store. Target is going to be facing some new challenges with these new format stores. One of the biggest will be how best to keep them fully stocked.
The Target product managers find themselves in a difficult spot. Their existing product development definition is no longer working and so they need to do something different. The idea of opening more stores that are smaller but which are targeted towards the customers that they serve is novel. The Target product managers are going to have to be careful and make sure that each store is stocked with the right products. Additionally, they will have to find a way to solve the challenge of making sure that they can supply each store with what they need when they need it.
Question For You: What is the best way for the Target product managers to determine what to stock in each store to best meet the needs of its unique set of customers?
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What We’ll Be Talking About Next Time
How about a quick show of hands: who uses Microsoft Office every day? Hmm, I believe that I see just about everyone’s hands in the air. Let’s face it, outside of the Microsoft Windows operating system, Microsoft Office is just about the most popular piece of software out there. Sure, there are some competitors such as Google Office and Libra Office; however, the biggest share of the market is owned by Microsoft and has been for roughly the past 30 years or so. So why are the Microsoft product managers so slow to make improvements to Microsoft Office?