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Target CEO says fancier in-store presentation is giving sales a major boost

Oct 27, 2015

For years, it seemed all Target (tgt) needed to do was bring in shoppers and put its trendy apparel and cool home items on racks and shelves and just ring up the sales.

But because of the Great Recession and increased competition from the likes of Bed Bath & Beyond on the home goods side, and from pretty much everyone on the apparel side, the discount retailer that pioneered "chic cheap" had to overhaul its approach to merchandising.

Enter former PepsiCo (pep) Brian Cornell, who took the reins last year with the mandate to end a Target slump that included two years of decreased in-store traffic. So far, the results have been promising, with comparable sales growing for three straight quarters.

While Target's tech investments—to compete with Amazon.com (amzn) and Walmart (wmt), among others—have grabbed headlines, the retailer under Cornell has made in-store presentation a major prong in its turnaround strategy. In other words, to put the "Tarzhay" back in Target, Cornell borrowed some moves from department stores.

"We realized we were making them [customers] work too hard," Cornell told the WWD Apparel and Retail CEO Summit in New York on Tuesday. "When you walked into our stores to browse, all you saw were a sea of racks or a string of search results. So we owed our customer a better presentation."

Last year, Target added consultants to its beauty sections, as well as mannequins to showcase clothing items and give customers ideas on how to put an outfit together, department store-style.

Cornell told the audience that sales of items worn by mannequins, which are now at 1,400 of Target's nearly 1,800 stores, have increased by 30%.

More recently, Target has been rolling out what it calls "home innovation" areas that showcase housewares in vignettes that help shoppers imagine how items would appear in an actual dining room or kitchen rather than placed unimaginatively on a shelf. By next month, those enhanced home areas will be at 262 Target stores. So far, Cornell said, items merchandised in that manner sell three to four times better than the average for the home category.

To build on this early success, Target is hiring 1,400 visual merchandising experts by the end of the year.

"There is an insatiable need to surprise our guests," Cornell said. "We had to elevate our assortment and the shopping experience."

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