Target’s business is on fire.
The discount retailer’s shares rose an impressive 19% this year. Recent sales results have also topped Wall Street’s estimates.
Target made several important decisions to turn around business, according to Brian Yarbrough, consumer analyst at Edward Jones.
Yarbrough told Business Insider how the company was able to get customers back in stores.
1. Hiring a new CEO.
Target CEO Gregg Steinhafel resigned after a tumultuous reign that included the company’s massive data breach and botched Canadian expansion.
He was replaced by PepsiCo veteran Brian Cornell.
Since taking the helm in September, Cornell has successfully implemented a strategy that takes Target back to its roots.
“Bringing in the new CEO was the first step for Target,” Yarbrough said. “He has a creative new perspective and isn’t afraid to take risks.”
2. Changing up product.
In recent years, Target made the mistake of pushing consumer staples like toilet paper and laundry detergent.
“You aren’t going to beat Wal-Mart and Amazon in those categories,” Yarbrough said. “People don’t go to Target for cheap food.”
Under Cornell’s leadership, Target has started focusing on “cheap chic” home decor and apparel.
This strategy is more likely to attract Target’s demographic, according to Yarbrough.
3. Adopting a new plan in Canada.
Target has struggled to gain traction in Canada.
But that could change under Cornell, according to Yarbrough.
“Target Canada’s future can only get better,” Yarbrough said.
The company will either close underperforming stores, or implement a new strategy to drive profits.
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