Target’s winning formula includes not only its product assortment and size, but the community it has created, one that includes its workforce, said Christina Hennington, the retailer’s executive vice president and chief growth officer.
“We really value our team. We think that the team is the secret sauce that builds our culture and that contributes to the growth that we have delivered in our business,” Hennington said. “Investing back into our team is not only the right thing to do, it is the smart thing to do to stay ahead in a competitive environment. Every time we invest back in our team, they deliver for our guests. And when we deliver for our guests, that delivers for our business and our shareholders.
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“So this is a smart investment,” she continued. “It is what continues to fuel us. Regardless of industry size or scale, I think the businesses that will be successful in the 2020s will be the ones that are fully aligned when it comes to how people fit into their plans and put in the work needed to back up words with meaningful action. Because ultimately, strategy and culture are linked. They reinforce each other. The how and why of your work is just as important as the what. At Target, putting action behind our values has meant doubling down on our commitment to our team.”
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Some of those commitments include last year’s minimum wage increase to $15 an hour, employee college tuition assistance, six rounds of staff bonuses in the last 18 months, additional mental health and childcare benefits amid the pandemic and an extra $2 an hour for employees who work select hours during this year’s peak holiday season.
These added perks have been established “to help our team deal with the immense levels of stress the pandemic added to their professional and personal lives,” Hennington explained. “All of this was about helping our teams be at their best. And because our team members were taken care of, they could focus on taking care of our guests.”
So far, the plan seems to be working. While competitors throughout multiple industries are struggling to hire this holiday season because of a tight labor market, a representative for Target said the company is experiencing reduced turnover this year. In addition, “Target receives millions of applications each year and continues to hire significantly to meet the needs of guests,” the representative said.
And there have been just as many Target shoppers this year. Thanks in part to its status as an essential retailer, the firm was able to remain open for business during the height of pandemic lockdowns. This helped Target capture even more market share, in both essentials as well as discretionary categories, including home, apparel and electronics.
In the most recent quarter, Target logged $1.8 billion in profits with strength across all categories as small and big brands alike — many that once competed for space in department stores to help them scale — are now vying for space in Target’s world. The mass-merchant retailer also said earlier this year that it would invest $4 billion annually to continue to grow its ecosystem. Year-over-year, shares of Target, which closed up 0.01 percent to $260.44 apiece Thursday, are up about 64.1 percent as a result.
This is precisely why WWD has honored Target with WWD’s Best-Performing Retailer, Large Cap, award.
“Culture exists in any company,” Hennington said. “It exists and it is a matter of harnessing it for the power of what you’re trying to do with your organization. It’s causal, not correlated.
“Culture is very important at Target,” she continued. “I don’t think about it as a buy-in, because that almost feels like you’re selling something. And we’re not. When you empower people to make a difference, that’s what they do. This is who we are when we’re at our best. And we use culture as a screening mechanism for who we bring on to Target. That doesn’t mean that everyone has to be cookie-cutter. We value diversity and a broad set of experiences. But there are certain values that are non-negotiable. And they are reflected in our culture. And we also use culture as a way to celebrate examples of that and reward and recognize behaviors that we expect of our teams. That becomes an entity onto its own.”
The chief growth officer added that another piece of Target’s success is communicating its goals to the consumer.
“A level of transparency to the consumer matters,” she said. “They care about the culture and values of companies, as well. If we lead with a level of authenticity, values and transparency, that usually comes through.”
Some examples included Target’s increased attention to diversity and inclusion. In response to the police murder of George Floyd in Minneapolis (home to Target headquarters), the company said it would increase its representation of Black team members by 20 percent by 2023. In addition, earlier this year the big-box retailer said it would spend more than $2 billion with Black-owned businesses by 2025. That includes adding products from more than 500 Black-owned businesses across the assortment and partnering with more Black-owned firms, such as marketing agencies, construction companies, suppliers and maintenance facilities, among others.
Target has also laid out long-term sustainability plans, such as designing 100 percent of its owned brands with regenerative, recycled or sustainably sourced materials by 2040, and contributing zero waste to landfills in the U.S. by 2030.
“It’s a dynamic environment. But the consumers’ expectations continue to rise,” Hennington said. “You have to break down the goals into meaningful chunks, into meaningful near-term goals that we then hold ourselves accountable to delivering against and communicating our progress. That’s how we’re going to get there and that’s obviously how our guest is going to stay aware of where Target is going. So investing in people who are able to problem solve and have empathy and consideration for people in a dynamic and really volatile world right now, is just smart.”