Target Corporation

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Target Corporation
Type	Public (NYSE: TGT)
Founded	1902 (Minneapolis, MN)
Headquarters	Minneapolis, Minnesota, USA
Key people	Bob Ulrich, chairman and chief executive officer
Industry	Retail
Products	Clothing, footwear, bedding, home decor, housewares, furniture, lawn and garden, jewelry, beauty products, electronics, sporting goods, and pet products.
Revenue	$59.490 billion USD (2006)[2]
Net income	$2.787 billion USD (2006)[2]
Employees	352,000[1]
Slogan	Expect More. Pay Less.
Website	www.target.com (Online store) www.targetcorp.com (Corporate)

Target Corporation (NYSE: TGT), originally known as the Dayton Dry Goods Co., is a retailing company that was founded in Minneapolis, Minnesota in 1902. In 1962, the first Target store was opened in Roseville, Minnesota. It is the sixth-largest retailer (by sales revenue) in the United States behind Wal-Mart, The Home Depot, Kroger, Sears Holdings Corporation and Costco,^[3] and is ranked 29th on the 2006 Fortune 500. It operates its retailing business exclusively in the United States. It sells more gift cards than any other retailer in the United States and is also the third-largest seller of music in the United States.^[4]

[edit] History

[edit] Dayton's

Main article: Dayton's

The company's roots were founded when George Dayton founded Dayton's department store in Minneapolis, Minnesota. In 1902, George Dayton constructed a six-story building in downtown Minneapolis and convinced R.S. Goodfellow Company to move its Goodfellows department store into it. The store's owner, Reuben Simon Goodfellow, retired and sold his interest in the store to George Dayton.^[5] In 1903, the store changed its name to the Dayton Dry Goods Company, and it changed its name again to the Dayton Company in 1910. In the 1950s, it acquired the Portland, Oregon based Lipmans department store company and operated it as a separate division.^[6] In 1956, the Dayton Company opened Southdale, the world's first fully-enclosed two-level shopping center in Edina, Minnesota, a suburb of Minneapolis.^[7] The Dayton Company also became a retail chain by opening its second Dayton's store in Southdale.

[edit] The founding of Target

Target's original bullseye logo from 1962 until 1968.

In 1962, the Dayton Company, using a concept developed by John F. Geisse, entered discount merchandising by opening its first Target discount store in Roseville, Minnesota, a suburb north of Saint Paul. The name "Target" originated from Dayton's publicity director, Stewart K. Widdess, and was intended to prevent consumers from associating the new discount store chain with the department store. The new chain ended its first year with four units, all in the Minneapolis area. The chain lost money in its initial years; however, in 1965 the chain reported its first gain with sales reaching $39 million USD, allowing a fifth store to open in Minneapolis. In 1966, Bruce Dayton launched the B. Dalton Bookseller specialty chain, which became the largest hardcover bookseller in the United States.^[5] The chain was named after the founder, but with the y in Dayton replaced with an l. Target Stores expanded outside of Minneapolis by opening two stores in Denver, Colorado, and sales exceeded $60 million USD. In 1967, the Dayton Corporation was established and it went public with its first offering of common stock, and it opened two more Target stores in Minnesota resulting in a total of nine units.^[8]

In 1968, Target changed its bullseye logo to the one currently in use, and expanded into St. Louis, Missouri with two new units. That year, the chain experienced a transition phase: Target's president and cofounder, Douglas J. Dayton, went back to the parent Dayton Corporation and was succeeded by William A. Hodder, and senior vice president and cofounder John Geisse left the company. He was later hired by St. Louis-based May Department Stores, where he founded the Venture Stores chain.^[8] Target Stores ended the year with 11 units and $130 million USD in sales. In 1969, it acquired the Lechmere electronics and appliances chain that operated in New England, and expanded the Target chain into Texas and Oklahoma with six new units and its first distribution center in Fridley, Minnesota.^[9] The Dayton Company also merged with the Detroit-based J.L. Hudson company that year, to become the Dayton-Hudson Corporation consisting of Target and five major department store chains: Dayton's, Diamonds of Phoenix, Arizona, Hudson's, John A. Brown of Oklahoma City, Oklahoma, and Lipmans. In 1970, the Target chain added seven new units, including two units in Wisconsin, and the 24 unit chain reached $200 million USD in sales.^[8] That year, Dayton-Hudson also acquired the Team Electronics specialty chain that was headed by Stephen L. Pistner.^[10]

[edit] Turnaround

Target logo used from 1968 until 2004

In 1971, it acquired sixteen stores from the Arlan's department store chain in Colorado, Iowa, and Oklahoma. That year, two of those units reopened as Target stores, and in 1972 the other fourteen were reopened to make a total of 46 units. This caused the chain to experience another major transition phase: It reported its first decrease in profits since its initial years, as a result of the chain's rapid expansion and the top executives' lack of experience in discount retailing. Its loss in operational revenue was due to overstocking and carrying goods over multiple years regardless of inventory and storage costs. By then, Dayton Hudson considered selling off the Target chain. In 1973, Stephen Pistner, who had already revived Team Electronics and would later do the same to Montgomery Ward and Ames, was named chief executive officer of the Target chain, and Kenneth A. Macke was named the chain's senior vice president. The new management saved the chain by marking down merchandise to clean out its overstock and by allowing only one new unit to open that year. In 1975, it opened two stores, reaching 49 units in nine states and $511 million USD in sales. That year, the Target discount chain became the company's top revenue producer.^[8]

In 1976, Target opened four new units and reached $600 million USD in sales. That year, Kenneth Macke was promoted to president and chief executive officer of the chain. In 1977, the chain opened seven new units, and Stephen Pistner became president of Dayton Hudson, with Kenneth Macke succeeding him as chairman and chief executive officer of the Target chain. The senior vice president of Dayton Hudson, Bruce G. All-bright, moved to the Target chain and succeeded Kenneth Macke as president. In 1978, the company acquired Mervyn's and became the 7th largest retailer in the United States. The Target chain opened eight new stores that year, including its first shopping mall anchor store in Grand Forks, North Dakota. In 1979, it opened 13 new units to a total of 80 Target stores in 11 states and $1.12 billion USD in sales.^[8][11] In 1980, it sold its Lipmans department store chain of six units to Marshall Field's, which rebranded the stores as Frederick & Nelson.^[6] That year, the Target chain opened 17 new units, including expansions into Tennessee and Kansas. It also acquired the Ayr-Way discount retail chain of 40 stores and one distribution center from Indianapolis-based L.S. Ayres & Company, which it reopened in 1981 as Target stores. That year, Stephen Pistner left the parent company to join Montgomery Ward, and Kenneth Macke succeeded him as president of Dayton Hudson.^[12] Floyd Hall succeeded Kenneth Macke as chairman and chief executive officer of the Target chain. Bruce All-bright left the company to work for Woolworth, where he was named chairman and chief executive officer of Woolco. Bob Ulrich also became president and chief executive officer of Diamond's Department Stores in 1981.^[13] In addition to the Ayr-Way acquisition, the Target Stores chain expanded by opening 14 new stores and a third distribution center in Little Rock, Arkansas to a total of 151 units and $2.05 billion USD in sales.^[8]

[edit] West and east coast expansion

Former Richway store in College Park, Georgia that was converted to a Target store in 1989, and replaced in 1995 with another Target in Fayetteville, Georgia. Such acquisitions of existing retail property allowed Target to expand into different regions of the United States.

Since the launch of the Target chain to this point, it had focused its expansion in the Central United States. In 1982, it expanded into the West Coast of the United States by acquiring 33 FedMart stores in Arizona, California, and Texas and opening a fourth distribution center in Los Angeles.^[14] That year, Bruce All-bright returned to the Target chain as its vice chairman and chief administrative officer, and the chain expanded to 167 units and $2.41 billion USD in sales. The 33 units acquired from FedMart were reopened as Target stores in 1983. Also in 1983, it founded the Plums off-price apparel specialty store chain with four units in the Los Angeles area, with an intended audience of middle-to-upper income women.

In 1984, it sold its Plums chain to Ross Stores after only 11 months of operation, and it sold its Diamond's and John A. Brown department store chains to Dillard's.^[15][16][17] Meanwhile, the Target chain added nine new units to a total of 215 stores and $3.55 billion in sales. Floyd Hall left the company and Bruce All-bright succeeded him as chairman and chief executive officer of the Target chain. In May 1984, Bob Ulrich became president of the Dayton Hudson Department Store Division, and in December 1984 became president of Target Stores.^[13]

In late 1986, the company acquired 50 Gemco stores from Lucky Stores in California, allowing its Target chain to become the dominant retailer in Southern California as the chain grew to a total of 246 units. It also opened a fifth distribution center in Pueblo, Colorado. Dayton-Hudson sold the B. Dalton Bookseller chain of several hundred units to Barnes & Noble.^[5] In 1987, the acquired Gemco units reopened as Target stores, and the chain expanded into Michigan and Nevada, including six new stores in Detroit, Michigan to compete directly against Detroit-based Kmart, leading to a total of 317 units in 24 states and $5.3 billion USD in sales. Bruce All-bright became president of Dayton Hudson, and Bob Ulrich succeeded him as chairman and chief executive officer of the Target store chain.^[13] In 1988, the Target chain expanded into the Northwestern United States by opening eight units in Washington and three in Oregon, to a total of 341 units in 27 states. It also opened a distribution center in Sacramento, California and replaced the existing distribution center in Indianapolis, Indiana from the Ayr-Way acquisition with a new one.^[8]

In 1989, it expanded by 60 units, especially in the Southeastern United States where it entered Florida, Georgia, North Carolina, and South Carolina to a total of 399 units in 30 states with $7.51 billion in sales.^[8] This included an acquisition of 31 more stores from Federated Department Stores' Gold Circle and Richway chains in Florida, Georgia, and North Carolina, which were later reopened as Target stores.^[14] It also sold its Lechmere chain that year to a group of investors including Berkshire Partners, a leveraged buy-out firm based in Boston, Massachusetts, eight Lechmere executives, and two local shopping mall executives.^[9]

In 1990, it acquired Marshall Field's from BATUS Inc. and the Target chain opened its first Target Greatland general merchandise superstore in Apple Valley, Minnesota. In 1991, the Target chain had opened 43 Target Greatland units, and sales reached $9.01 billion USD. In 1992, it created a short-lived chain of apparel specialty stores called Everyday Hero with two stores in Minneapolis.^[14] They attempted to compete against other apparel specialty stores such as GAP by offering private label apparel such as its Merona brand. In 1994, Kenneth Macke left the company, and Bob Ulrich succeeded him as the new chairman of Dayton-Hudson.^[10]

In 1995, the Target chain opened its first SuperTarget hypermarket in Omaha, Nebraska. Its store count increased to 670 with $15.7 billion USD in sales, and in 1996 to 736 units with $17.8 billion USD in sales.^[18] In 1997, both of the Everyday Hero stores were closed.^[19] Target's store count rose to 796 units, and sales rose to $20.2 billion USD.^[18] In 1998, it acquired Greenspring Company's multi-catalog direct marketing unit, the Rivertown Trading Company, from Minnesota Communications Group, and it acquired the Associated Merchandising Corporation, an apparel supplier.^[20][21] Target Stores grew to 851 units and $23.0 billion USD in sales.^[18] In 1999, it acquired Fedco and its ten stores in a move to expand its SuperTarget operation into Southern California. It reopened six of these stores under the Target brand and sold the other four locations to Wal-Mart, Home Depot, and the Ontario Police Department, and its store count rose to 912 units in 44 states with sales reaching $26.0 billion USD.^[22][11][18] On September 7, 1999, it relaunched its Target.com website as an e-commerce site and as part of its discount retail division. The site initially offered merchandise that differentiated its stores from its competitors, such as its Michael Graves brand.^[23]

[edit] Target Corporation

The Target logo, 2004–present

In January 2000, Dayton Hudson Corporation changed its name to Target Corporation and its ticker symbol to TGT; by then, between 75 percent and 80 percent of the corporation's total sales and earnings came from Target Stores while the other four chains—Dayton's, Hudson's, Marshall Field's, and Mervyns—were used to fuel the growth of the discount chain, which expanded to 977 stores in 46 states and sales reached $29.7 billion USD by the end of the year.^[11] It also separated its e-commerce operations from its retailing division, and combined it with its Rivertown Trading unit into a stand-alone subsidiary called target.direct.^[24] In 2001, it announced that its Dayton's and Hudson's stores would operate under the Marshall Field's brand, which was the most recognizable name in the Department Stores Division. Target Stores expanded into Maine, reaching 1053 units in 47 states and $33.0 billion USD in sales.^[18][25] In 2002, it expanded to 1147 units and sales reached $37.4 billion USD, and in 2003 it reached 1225 units and $42.0 billion USD in sales.^[11]

On March 10, 2004, Target Corporation announced it had hired Goldman Sachs Group to analyze options for selling its Marshall Field's and Mervyns chains of department stores. Three months later, on June 9, 2004, Target Corporation announced its sale of the Marshall Field's chain and several Mervyns stores to St. Louis, Missouri-based May Department Stores Company, which became effective July 31, 2004. On July 21, 2004, it announced the sale of Mervyns to an investment consortium including Sun Capital Partners, Inc., Cerberus Capital Management, L.P., Lubert-Adler/ Klaff and Partners, L.P., which was finalized September 2. After the 2004 sale of Marshall Field's and Mervyns divisions, target.direct became known as Target.com.^{[citation needed]} Target Stores expanded to 1308 units and reached $46.8 billion USD in sales. In 2005, it reached 1397 units and $52.6 billion USD in sales, and in 2006 it expanded to 1488 units and sales reached $59.4 billion USD.^[11][2]

[edit] Subsidiaries

Target Corporation headquarters in the Nicollet Mall shopping district of Minneapolis, Minnesota.

Target Corporation headquarters with Target Light System, created by 3M.[26]

Today, Target Corporation has its headquarters on Nicollet Mall in Minneapolis, near the site of the original Goodfellows store. It operates its main retail subsidiary, Target Stores, under the banner of 'Target'. The company owns several other subsidiaries, which include:

• Target Financial Services (TFS): issues Target's credit cards, known as the Target REDcard, consisting of the Target VISA and the Target Card (formerly the Target Guest Card), issued through Target National Bank (formerly Retailers National Bank) for consumers and through Target Bank for businesses. Target Financial Services also oversees GiftCard balances (see GiftCards section below).
• Target Sourcing Services/The Associated Merchandising Corporation (TSS/AMC): This global sourcing organization locates merchandise from around the world for Target and helps import the merchandise to the United States. Such merchandise include garments, furniture, bedding, and towels. TSS/AMC has 27 full-service offices, 48 quality-control offices, and seven commissionaires located throughout the world. TSS/AMC employs 1,200 people. Its engineers are responsible for evaluating the factories that do business with Target Corporation for quality, as well as labor rights and transshipment issues.^[27] It was acquired by Target Corporation in 1998, and was founded in 1916, previously owned by the clients it served.^[28] It also acts as a buying office for Saks Incorporated, Bloomingdale's, Stage Stores Inc., TJ Maxx, and Marshalls.^[21] The Target Sourcing Services division locates merchandise exclusively for Target Stores and Target.com.
• Target Commercial Interiors: provides design-services and furniture for office space. Currently, Target Commercial Interiors has an unusually high market share of Fortune 500/1000 business customers, and are expanding to attract small to medium sized businesses, as well as home offices. This subsidiary has six showrooms in Illinois, Minnesota, and Wisconsin, including a first-of-its-kind retail concept store and showroom in Bloomington, Minnesota that opened on June 23, 2005.
• Target Brands: owns and oversees the company's private label products, including the grocery brands Archer Farms and Market Pantry, Sutton & Dodge, their premium meat line, and the electronics brand Trutech. In addition, Bullseye Dog is a trademark, and the Bullseye Design and 'Target' are registered trademarks of Target Brands.
• Target.com: owns and oversees the company's e-commerce initiatives, such as the Target.com domain. Founded in early 2000 as target.direct, it was formed by separating the company's existing e-commerce operations from its retailing division, and combining it with its Rivertown Trading direct marketing unit into a stand-alone subsidiary.^[24] In 2002, target.direct and Amazon.com's subsidiary Amazon Enterprise Solutions created a partnership where Amazon.com would provide order fulfillment and guest services for Target.com in exchange for fixed and variable fees. This electronic commerce relationship between target.direct and Amazon Enterprise Solutions will last until August 2010.^[29][30] After the company sold Marshall Field's and Mervyns in 2004, target.direct became Target.com.

[edit] Target Stores

Target Corporation's main retailing subsidiary, Target Stores, is a United States discount retail chain consisting of 1,502 stores (as of January 4, 2007).^[1][11] It has units in all states except for Alaska, Hawaii, and Vermont, operating under the mastheads of Target, Target Greatland, and SuperTarget. The chain was founded by Douglas J. Dayton and John Geisse, and the first Target store "T-1" opened on May 1, 1962 in Roseville, Minnesota.^[8] That store was closed and demolished on January 8, 2005, to make room for a SuperTarget, which opened on October 9 of the same year.^[31] Target Corporation has aggressive plans to have 2,000 stores open by the year 2010,^[32] including expanding to Alaska and Hawaii.^[33][34]

Target's retail operations are limited to the United States. The Australian retail chain of the same name is not related to Target Corporation.

[edit] Target

The exterior of a typical Target discount department store.

Target is a chain of discount department stores that are about 95,000 to 135,000 square feet (12,000 m²) and carry hardlines ("regular" products and goods), softlines (clothing), and a limited amount of groceries, usually non-perishable. Specifically, Target stores carry clothing, shoes, jewelry, health and beauty products, electronics, compact discs, DVDs, bedding, kitchen supplies, sporting goods, toys, pet supplies, automotive supplies, hardware supplies, and food. They also carry seasonal merchandise such as patio furniture during the summer and Christmas decorations during November and December. Many stores may also have one-hour photo processing, a portrait studio, an optical store, a pharmacy, and a garden center. Stores opened and re-modeled in 2004 or later also include the expanded snack bar that is featured in Target Greatland locations. These generally include a Starbucks Coffee shop, a Pizza Hut Express, and a Taco Bell Express in addition to Target's Food Avenue. It has also been reported that Cold Stone Creamery and Target have signed a deal to test in-store ice cream shops in four stores.^[35]

The first few Target stores included leased supermarkets in addition to general merchandise, which during the time was a common practice by discount retailers as they attempted to offer a one-stop shopping experience to customers. Douglas Dayton stated in 1967 that "we believe that the discount-grocery store is a necessary ingredient in what we offer the customer. After all, food sales are about 40% of all department store-type merchandise sales, so the two kinds of stores go hand-in-hand and are what people think of when they think of a discount store." However, by the end of the decade, Target started moving away from this general merchandise and leased supermarket practice. In 1969, Target opened its first store consisting of only general merchandise.^[14]

In the past, the one-hour photo processing labs were not owned by Target, but by Qualex, a subsidiary of Eastman Kodak and were staffed by employees of Qualex, not Target. However, in June 2005, Target spokeswoman Brie Heath announced that Target Corporation will replace the Qualex photo labs with their own labs running Kodak equipment, and will staff them with Target employees. Unlike the previous Qualex labs, all photo processing is done "in house", including next-day, digital, and Kodak Perfect Touch processing, although a few labs have been replaced with "send-out" only service with a self-service Kodak Picture Maker kiosk. A select number of "test" stores are running with Fujifilm equipment instead of Kodak.^[36] Target has also partnered with Yahoo! Photos for online photo services, including ordering prints online for one-hour store pickup.

[edit] Target Greatland

The exterior of a typical Target Greatland in Mount Laurel, New Jersey. Unlike smaller Target stores, Target Greatlands feature double entrances.

Target Greatland is a chain of general merchandise superstores that are about 150,000 square feet (14,000 m²). They carry a larger selection of general merchandise than a basic Target store; however, they do not have a full-line of groceries like meat, bakery, deli, produce and dairy. Throughout 2005, the company reorganized the sales floor, allowing them to double the grocery space they had before. Prominent features include double entrances on single level stores along with an expanded snack bar. The snack bar may include a Pizza Hut Express, Taco Bell Express, and/or a Starbucks. The construction of new Target Greatland stores have been phased out in favor of building SuperTarget prototypes or regular Target prototypes with more square footage.

The first Target Greatland opened in Apple Valley, Minnesota in 1990, and has since been remodeled and expanded, becoming a SuperTarget. The last Target Greatland opened in 2006 and is located in Staten Island, New York City.

[edit] SuperTarget

The exterior of a typical SuperTarget in Salt Lake City, Utah. Shown is the merchandise loading lane between the double entrances on the front of the building.

SuperTarget logo, 2006-present.

SuperTarget is a chain of hypermarkets that are about 175,000 square ft. (16,000 m²). Like Target Greatland, SuperTarget features double entrances on one story stores; some also have between the double entrances a merchandise loading lane as a prominent feature of the building. The store logo often spells "Super" in green cursive, but recently, newer ones are signed in red block letters that match the Target font. They carry everything a Target or a Target Greatland does as well as a grocery store. Many SuperTargets may also feature a Starbucks Coffee shop, a Pizza Hut Express, a Taco Bell Express, Jamba Juice, a pharmacy, a portrait studio, a one-hour photo processing lab, an optical store, or a Wells Fargo Bank. Unlike many other hypermarkets in the United States (such as Wal-Mart Supercenters and Meijer), SuperTargets are not continuously open.

In the past, some SuperTargets featured an E*TRADE trading station instead of a Wells Fargo Bank. However, in June 2003, E*TRADE decided to remove all E*TRADE branches from their SuperTarget locations^[37] without advance notice. This sudden move was not initiated by Target Corporation. Mitchell Caplan, E*TRADE's CEO, said that "We were not able to make it into a profitable distribution channel...[w]e're better off exiting." E*TRADE also sent a letter of notification to their customers informing them about this change.

The first SuperTarget opened in Omaha, Nebraska in 1995, and the second SuperTarget opened in Lawrence, Kansas later that same year.^[38] As of January 4, 2007, Target operated 182 SuperTarget stores in 21 U.S. states.^[1][11]

[edit] Urban stores

The exterior of a two-story urban Target discount department store in Abington, Pennsylvania.

While many Target stores share a fairly common big-box store layout, the company has been known to be flexible with its designs. For example, the urban Target store located on Nicollet Mall opened on October 10, 2001, only two blocks away from the site of the 1902 Goodfellows store, a few blocks away from the Target Center arena, and located within Target's downtown Minneapolis world headquarters complex. This particular Target store features a three-story glass entrance and a design that sets it apart from suburban Target stores. This urban store alone cost Target Corporation $16.3 million USD and the city of Minneapolis $59.9 million USD to develop.^[39] More urban locations are found at the Atlantic Terminal Mall Target Store in Brooklyn, New York City, New York and the Sepulveda Boulevard Target Store in the Van Nuys district of Los Angeles. These locations exemplify the need for multi-story stores with small footprints in heavily trafficked areas.^[40]

The average urban multi-level Target location is of a fairly simple architecture such as the location in Abington, Pennsylvania (pictured), they may also be attached to a mall such as the location in Springfield in Fairfax County, Virginia (see photo). Where required by law, local custom, or decided by the company to drive visibility and sales, they may have elaborate architecture such as the aforementioned Nicollet Mall location or the Gateway Center in West Hollywood, California.^[41] A controversial two story Target store is under construction in Oak Lawn, Illinois, just outside the city limits of Chicago. To face the parking shortage in this area, the store is being built above a parking garage, similar to stores in Chicago's South Loop and Rogers Park neighborhoods. A multi level Target store is also being considered for Westfield Downtown Plaza in Sacramento, California as part of that shopping center's revitalization effort. There is also a two-level store in University Heights, Ohio just outside of Cleveland.

These unique multi-level locations may feature many oddities that set it apart from a standard Target location. Although these locations are not Target Greatland or SuperTarget locations, they still feature multiple entrances, usually on different levels. Checkout lanes may be located in one central area and service two exits and/or there may be satellite locations to serve additional exits. Transferring between levels in the store with shopping carts is accomplished via elevators and a specialized escalator, called a Vermaport. Freight elevators are used to transfer product between floors and stock rooms which may be located on its own floor above or below the store or share floor space with the selling floor on the same level. Stores without parking lots (Atlantic Terminal, West Hollywood) and stores connected to malls feature shopping carts with locking wheels. As the shopping cart exits the store into the mall area or into city sidewalks, one wheel on it will lock and render the cart unusable.

This concept has also been used to convert Target stores from former Montgomery Ward and Younkers stores.^[42]

[edit] Distribution centers

As of January 4, 2007, Target Corporation operated 25 distribution centers across the United States.^[1] Target opened two new distribution centers in 2006 (Rialto, CA and DeKalb, IL) to support the growth of its stores. With the exception of vendor supplied items, such as greeting cards and soda, these distribution centers ship items directly to Target stores. Also, unlike Wal-Mart, Target's grocery selection does not come from their own distribution centers, but from the companies that Target has partnered up with. For example, the produce carried in SuperTargets comes from Supervalu distribution centers.^[5]

The retail chain's first distribution center opened in Fridley, Minnesota in 1969. It included a computerized distribution system and was known as the Northern Distribution Center. During this time, the chain consisted of seventeen stores after having expanded into Oklahoma and Texas.^[8]

On August 9, 2004, Target announced to their suppliers that they were going to perform a trial on the effects of radio frequency identification on the efficiency of supply chain management in the Dallas/Fort Worth Metroplex. This trial involved one Target distribution center and ten nearby Target stores. Here, RFID tags would be placed on the bar codes of pallets and cartons to track the goods from the suppliers to the distribution center, and from the distribution center to the stores.^[43]

[edit] Differentiation

Target Corporation competes directly against other discount retailers, mainly Wal-Mart and Kmart. Since its founding in 1962, it has intended to differentiate its stores from its competitors by offering what it believes is more upscale, trend-forward merchandise at low cost, as opposed to the traditional concept of focusing on low-priced goods. Douglas J. Dayton, one of the Dayton brothers, explained John Geisse's concept:

As a result, Target stores tend to attract younger and more educated and affluent customers than its competitors. Currently, the median Target shopper is 41 years old, which is the youngest of all major discount retailers that Target competes directly against. The median household income of Target's customer base is roughly $58,000 USD. Roughly eighty percent of Target customers are female, and about 43 percent have children at home. About eighty percent have attended college and 43 percent have completed college.^[1][11]

Typical interior of a Target store

Target refers to itself as a "discount department store" instead of just a discount store.^{[citation needed]} Target stores do not play ambient music, commonly known as elevator music and often distributed by Muzak. However, several Target stores feature a Starbucks, and those that do play music only in the Starbucks centers. It also does not promote items or services through its public address system. Target designs its stores to be more attractive than Wal-Mart by having wider aisles, drop ceilings, a more attractive presentation of merchandise and generally cleaner fixtures. In addition, special attention is given to the design of the store environment: graphics reinforce Target's advertising imagery and shelves are dressed with contemporary signage, backdrops and liners, often printed on inexpensive material such as paper, corrugated and foam boards. Some stores—particularly those around international airports—have a bullseye painted on the roof that can be seen from above: The Rosemont, Illinois, Target store next to O'Hare International Airport is one such unit that has a bullseye painted on its roof.^[44]

Some of Target's fans jokingly refer to a Target store as "Tar-zhay" or Targé (Tar-jé) (IPA: [tɑɹˈʒeɪ]), as though it were a French word, a reference to its more upscale image compared to its competitors. This trend is incorrectly believed to have been started by Oprah Winfrey, when she used the French pronunciation to refer to the store on her television show. The pronunciation has been traced back to 1962, the year the first Target store opened. This pronunciation has also led some people to incorrectly believe that the company is French-owned.^[5]

Target calls its customers "guests", its employees "team members", and its supervisors "team leaders." It derived this practice in 1989 from The Walt Disney Company.^[5] Target, unlike many of its competitors, offers not only 401(k) plans to its team members, but also offers personal pension plans.

Target stores do not sell firearms. In the early 1990s, they stopped selling toy guns that looked realistic and limited its toy gun selection to ones that were brightly colored and oddly shaped. They do not sell tobacco products and have not sold cigarettes since 1996.^[45] Unlike Wal-Mart, they sell "explicit" CDs and "racy" magazines such as Maxim and FHM.

Target has many exclusive deals with various designers, including Isaac Mizrahi, Michael Graves, Mossimo Giannulli, Fiorucci, Liz Lange, and Luella Bartley, among others. Target, after hiring architect Michael Graves to design the scaffolding used to renovate the Washington Monument and contributing $6 million USD to the restoration plan, introduced its first designer line of products in 1999, the Michael Graves Collection of housewares and home decor products.^[46] Wal-Mart and Kmart have followed Target's lead by signing exclusive designers to their stores as well. Target also partners with well-established national brands to create exclusive collections for its stores. Recently, Sony created a line of electronics under the Sony LIV name geared towards women. The collection included a CD player that resembled a purse, and a CD player that was equipped to be mounted under the kitchen counter. Another example of this is Target having an exclusive deal with Food Network for selling DVDs of TV shows featuring popular chefs such as Rachael Ray, Alton Brown, and Paula Deen. In July 2006, Target started selling two-tone pink edition Apple iPods through a partnership with Colorware. Sometimes manufacturers will create red-colored items, exclusively for Target. In 2002, Nintendo produced a red special edition variant of the Game Boy Advance, which featured the Target logo above the screen.^[47]

[edit] GiftCards

The Target GiftCard is the retailing division's stored-value card or gift card. Target sells more gift cards than any other retailer in the world.^{[citation needed]} The unique designs of their cards contribute to their higher sales. Past and current designs include "scratch and sniff" (such as peppermint during the Christmas season), glow in the dark, LED light-up, a gift card on the side of a bubble blower, a gift card that can function as a CD-ROM, and even a giftcard that allows the sender to record a voice message. A current environmentally friendly giftcard is made from bioplastic manufactured from corn.^[48] Target rolled out a new MP3 Player giftcard for the 2006 holiday season. It holds 12 songs and must be purchased with an initial value of at least $50.

Many of these design ideas are not used by any other retailer in the United States. It is noted that some of these unique design ideas are patented, and these patents are assigned to the Target Brands subsidiary. For example, some such Target GiftCard designs feature a wooden front side. On May 24, 2005, the United States Patent and Trademark Office granted US patent D505,450 for the "ornamental design for a credit or stored value card with wood layer" to inventors Amy L. Lauer and John D. Mayhew.^[49] US patent 7004398, for the "stored-value card assembly including a stored-value card, an edible product, and a wrapper", was granted to Michael R. Francis and Barry C. Brooks on February 28, 2006.^[50] Both of these patents have been assigned to Target Brands, Inc.

[edit] ClearRx

Main article: ClearRx

In 2005, Target introduced a major revision of prescription bottles, which it calls the ClearRx system. The redesigned bottles are color coded, flattened-out and turned upside down providing more room for the label. This system was based on the patent^[51] by student Deborah Adler and was named one of Time Magazine's Most Amazing Inventions of 2005.^[52]

[edit] Philanthropy

Target Corporation is consistently ranked as one of the most philanthropic companies in the country. According to a November 2005 Forbes article, it ranked as the highest cash giving company in America in percentage of income given (2.1%).^[53] Target donates around five percent of their pre-tax operating profit; it gives over $3 million a week (up from $2 million in years prior) to the communities in which it operates. It also gives a percentage of charges from its Target Visa to schools designated by the cardholders. To date, Target has given over $150 million to schools across the United States through this program. Target Corporation's corporate by-laws state that it must give 5% of its pre-tax profits to charity.^{[citation needed]}

Further evidence of Target's philanthropy can be found in Memphis, Tennessee's Target House complex, a long-term housing solution for families of patients at the city's St. Jude Children's Research Hospital. The corporation led the way with more than $27 million in donations, which made 96 fully-furnished apartments available for families needing to stay at St. Jude over 90 days.

Target has a standard no-solicitation rule at its properties, as it seeks to provide a "distraction-free shopping experience for its guests." Exemptions to this policy were previously made for the Salvation Army red kettles and bell-ringers outside Target stores during the holidays through Christmas. Though, in 2004 Target asked the organization to explore alternate methods to partner with Target.

In addition to donating to local Salvation Army chapters through its grant program and annually to the United Way of America (the Salvation Army is a member of the United Way coalition). In 2005, Target Corporation and the Salvation Army^[54] created a joint effort called "The Target/Salvation Army Wish List," where online shoppers could donate goods to the organization for Hurricane victims by buying them directly from Target.com between November 25, 2005 and January 25, 2006. In 2006, they created another joint effort called "The Target/Salvation Army Angel Giving Tree,"^[55] which is an online version of the Salvation Army's Angel Tree program;^[56] in addition to donating proceeds made from the sales of limited edition Harvey Lewis angel ornaments within Target Corporation's stores. During the Thanksgiving holiday of 2006, Target and the Salvation Army partnered together with magician David Blaine to send several families on a shopping spree the morning of Black Friday. The challenge held that of Blaine could successfully work his way out of a spinning gyroscope by the morning of Black Friday, then several families would receive 500 dollar shopping certificates. The challenge was completed successfully by David Blaine.^{[citation needed]}

During disasters, Target Corporation is a major benefactor for relief efforts. Target provided monetary and product donations during the September 11th terrorist attacks on the U.S.; it also donated money for relief efforts for the tsunami in South Asia. Most recently, Target donated $1.5 million (U.S.) to the American Red Cross in the aftermath of Hurricane Katrina in 2005. It also allowed its store properties in the affected area to be used as command centers for relief organizations. It also donated supplies such as water and bug spray. Besides these major disasters, Target also regularly lends its support to disasters that are not as well known or only affect a regional area.

[edit] Target Forensic Services

In 2006, The Washington Post revealed that Target is operating two sophisticated criminal forensics laboratories, one at their headquarters, the other in Las Vegas, NV.^[57] Originally, the lab was created as an internal need for the company to investigate instances of theft and fraud and other criminal actions that occurred on its own properties. Eventually, the company began offering pro bono services to law enforcement agencies across the country. Target's Forensic Services has assisted agencies at all levels of government, including Federal agencies such as the United States Secret Service, Bureau of Alcohol, Tobacco and Firearms and the Federal Bureau of Investigation. The labs have become such a popular resource for law enforcement that Target has had to restrict the cases it assists in to only violent felonies.^[58][59]

[edit] Criticism

Like many other large businesses and corporations, Target Corporation faces criticism; because of Target's smaller size in comparison to Wal-Mart, Target often escapes such criticism. In addition, many people may overlook Target's practices because of its successful marketing to differentiate itself as being more upscale than other discount retailers and because of its generosity in donating money. Practices that cause some concern include: lack of a living wage certification, lack of labor unions, and its contribution to urban sprawl.^[60] Liza Featherstone, contributing editor to the "The Nation" magazine and author of Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart, stated the following in an inverview.

In 2002, the company was alerted to sporting caps and shorts having the number "88" embroidered on them. This number has been used by known white supremacist groups as slang for "Heil Hitler." A customer informed the company of the offensive merchandise. Target did not make a public apology until the Southern Poverty Law Center echoed its concern. Target pulled the merchandise from its stores and issued a public apology statement.^[62]

In 2004 much negative publicity was generated from the company's decision to no longer allow exception for the Salvation Army to collect donations at its stores (see Philanthropy section above).

In 2005 Planned Parenthood protested Target policy involving a conscience clause that allows pharmacists to refuse to dispense the emergency contraceptive, Plan B Levonorgestrel, based on religious beliefs as long as the employee ensures that the prescription is filled by another pharmacist in a timely manner. Defenders of Target applaud the company for upholding the employee's freedom of conscience, while others feel this policy fails to uphold the pharmacist's duty of care.^[63]

In November 2005, the American Family Association criticized Target Corporation and other retailers for not using the word "Christmas" in its holiday advertising. Target Corporation responded by introducing words like "Christmas" and "Hannukah" on its website and in-store signage, and by showing holiday ads with the phrase "Merry Christmas" in them.^[64][65]

In 2007, Chris Serres (a staff writer at the Star Tribune) found that Target employees wearing the hijab scarf at the E. Lake Street, Mineapolis location refused to touch pork products. This was a journalistic investigation based on reports from other sources.^[66] Target's immediate response avoided the religious concerns and focused on the importance of speed to their business model.^[67] From their initial statement it's unclear if they are claiming that allowing their employees to defer to a another team member would be a unreasonable accommodation under the Civil Rights Act of 1964.

[edit] Diversity

Target defines diversity inclusively as individuality. They state this individuality may include a wide spectrum of attributes such as personal style, age, race, gender, ethnicity, sexual orientation, language, physical ability, religion, family, citizenship status, socio-economic circumstances, education and life experiences.^[68]

The Target employee diversity program is called "The Power of One". It specifically seeks to work with vendors and contractors that are minority-owned or owned by women.^[69]

It is has long extended domestic partner benefits to straight, gay, and lesbian employees. It has received an 86 on the Human Rights Campaign Corporate Equality Index Score.^[70] In addition, Target Corporation was named one of the "100 Best Companies for Working Mothers" in 2004 by Working Mother magazine.

Despite Target's stated commitment to diversity, the National Association for the Advancement of Colored People has repeatedly given Target failing grades on its annual Economic Reciprocity Initiative report card, a measure of the company's "commitment to the African-American citizenry". In 2003 and 2005, the NAACP has rated Target an "F" on this report; in 2004, Target was rated a "D-".^[71][72][73] In 2006 when Target was asked why they didn't participate in the survey again,^[74] a representative explained "Target views diversity as being inclusive of all people from all different backgrounds, not just one group."^[75]

[edit] Major sponsorships

The Target Chip Ganassi Racing IndyCar visiting Purdue University.

Target owns the naming rights to the Target Center in Minneapolis. It also sponsors the NASCAR and IndyCar racing teams of Chip Ganassi Racing. In the 2005 NASCAR season, the #41 Chip Ganassi Target car was driven by Casey Mears; for the 2006 season, rookie Reed Sorenson took over the #41 when Mears moved to a different Chip Ganassi car on the same team.

Target Corporation is also a major sponsor of the annual Minneapolis Aquatennial. It hosts the Target Fireworks Show on barges over the Detroit River, between Detroit, MI, and Windsor,ON,Canada. It is the largest annual fireworks show west of the Mississippi River, and the fourth largest annual fireworks show in the United States.

Target also sponsors the Museum of Modern Art in Manhattan, New York. It hosts Target Free Friday Nights, providing to all visitors free admission to the museum during Fridays after 4 p.m. A similar Target-sponsored program at the Los Angeles County Museum of Art called "Free after Five" provides free admission in the evening throughout the week. Tuesdays are free at the Museum of Contemporary Art in Chicago, Illinois, courtesy of Target. In its hometown of Minneapolis, Target sponsors the Target Free Thursday Nights at the Walker Art Center, where admission is free after 4 p.m.

Target is the founding sponsor of the Weekend America radio program.

Target often supports major awards shows such as the Oscars, Emmys, Grammys, and the Golden Globes.

[edit] See also

• Bullseye (Bull Terrier)
• Career Opportunities (film)
• National Federation of the Blind v. Target Corporation

[edit] Notes and references

[edit] External links

• Target.com E-commerce website
  • Target Corporation Corporate website
  • The Associated Merchandising Corporation