In an attempt to attract more customers and drum up sales in the face of fewer visitors and just so-so grocery sales, Target turned to innovation, creating prototype stores of the future and launching a super-secret project “Goldfish” that aimed on disrupting the retail landscape as we knew it. Those efforts are no more.
The Minneapolis Star Tribune, citing sources familiar with the matter, reports that Target is redirecting its focus away from innovation development and toward its current business.
The change of direction comes after sales and traffic failed to reach anticipated levels at the retailer during the holiday season, putting it on track to report negative sales for the fiscal year.
In response, the company believes it should focus on its core business operations, the sources say.
To do that, the retailer has in recent weeks killed its mysterious codename-shrouded startup project “Goldfish,” which launched in March 2016 with the idea of “disrupting the way people shop.”
Goldfish was the brainchild of West Stringfellow, who doesn’t just have a name straight out of a freshman fiction writing seminar, but was also one of Target’s three resident entrepreneurs. The group had been tasked with making sure the retailer remains vital in an increasingly tech-savvy market.
The sources also tell the Tribune that Target has scaled back or shelved several other projects from its innovation team.
For example, the company reportedly abandoned its so-called “store of the future” prototype that relied on robots and other tech-savvy features.
While Target didn’t comment on the innovation cuts specifically, it did note it was making some strategic changes.
“At Target, we regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources,” Dustee Jenkins, Target’s senior vice president of communications, tells the Star Tribune. “We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities.”
Although Target says it is still sees innovation as a “tremendous opportunity,” analysts say the shift in focus isn’t surprising.
“I do think they have to innovate,” Brian Yarbrough, an analyst with Edward Jones, tells the Star Tribune. “But their bread and butter is still brick-and-mortar retail stores. They have to get that right and find ways to drive more traffic to the stores.”
by Ashlee Kieler via Consumerist