Target Drive-Up Returns Shows It's Building the Next-Generation Mall
Recent news has Target adding drive-up returns to its set of same-day services. My initial reaction is "what"? How does this help them in the short-term?
Reality is, it's not.
Upon further consideration, Target is running a constant stream of experiments to become the modern mall, powered by a set of digital and omnichannel capabilities.
And in this mission, Target is unwavering in its ultimate mission to become the best platform for its brand partners. You might even call it a drive-up marketplace.
While the class "A" mall isn't going anywhere soon, what's happened in the past 5 years is that the brands that used to fill the center of "B" and "C" mall properties have instead partnered with Walmart, Target and other retail directly. There are at least a half dozen brands/retail you could name starting with Disney, Apple, Ulta.
The cynic in me says that Target's problems in the short term are unsolvable (i.e. Target isn't going to become a value brand), and these types of experiments could be distracting....
On the other hand, the fact that Target is willing to be misunderstood in this domain also says something positive about their management team - they are thinking about the long-term.
Drive-up returns on its own? Not transformational. However, as one of several ways to drive the frequency of shoppers into the parking lot? Yes, you want them to walk into the store, but the first step is in the parking lot.
It's like a funnel. What if you could sell them other products and digital services as part of that drive-up transaction? They have already started with Starbucks.
What kind of message can you sell your brand partners to working with Target? Target is persistent in targeting savvy, convenience-oriented, shoppers. Surround that with a best-in-class set of digital and physical capabilities, and you have the foundation of great modern retail.
I'll repeat it -- Target is building what the mall should have been 10 years ago. It may not be evident from the outside, but on the inside, I'm sure that Target views drive-up returns as another brick in the wall of its customer-focused future.
While each individual capability is essential, Target's real advantage is the culture and management patience required to build them.
