Interesting interview yesterday with the top brass at Target in the Wall St. Journal. Target offers a text book case on how to build a brand and sustain growth via product enhancements and innovative marketing:
It keeps adding hot products, such as Smith & Hawken accessories, and is bringing in apparel by new designers from around the world. Target, which recently posted $59 billion in revenue, is about the size Wal-Mart was a decade ago, though sales at existing stores are rising at twice Wal-Mart’s rate.
Bob Ulrich, Chairman and CEO touched on how they landed on the idea of an upscale discount store:
As we pushed the parameters of the design and quality and trendiness of our merchandise, it eventually became more acceptable for more upscale people, not just in terms of income but taste level, to shop at Target. We created the whole trend of designers making products for discounters, starting with architect Michael Graves in 1999, who took his $135 teapot and recreated it for us for $35.
Ulrich also notes that innovation is not a moment in time or something you can deliver on one aisle:
These things keep evolving. You can’t just be unique in one category. You can’t be really mundane in small electrics if you’re trying to be innovative in textiles. You can’t be really forward in linens and beat down in shoes, so you have to start to get more consistency across the board.
Michael Francis, EVP of Marketing, describes how they keep fresh:
One way is through something we call The Big Idea contest. I challenge my team to solve a problem or see things a new way. We’ve done everything from what’s the next consumable product that we would like to repackage to what product in your pantry frustrates you the most. The winner gets a cash prize, recognition and sometimes we create the product or campaign.
One of the biggest barriers to innovation is fear of failure. Target’s President Gregg Steinhafel describes how his company consistently breaks down this barrier:
It’s important that we push the envelope and that we fail. I’ve described on my conference calls a number of merchandising initiatives where we pushed too far, too fast. Like domestics where we got a little out in front of ourselves with too high a thread count in sheets and too many top of bed products at high prices. We recognize that when we do fail, we make the course corrections and we don’t penalize the teams that have made these calculated risks.
The interview is well worth reading in its entirety and serves as a good reminder that innovation is rarely an accident. It takes an enlightened corporate culture in which ideas are celebrated, risk taking is rewarded and failure is forgiven. Continuous product improvement is a cornerstone of Marketing for Good. With every product enhancement comes the opportunity to help make someone’s life a little better (even if means simply saving them money) and the corresponding opportunity to create brilliant communications. Conversely, stale products rarely inspire fresh marketing. Kudos to Tar-jay for keeping it fresh.