Target (NYSE:TGT) hopes to regain Merchandising Authority – the company all set to achieve the goal

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By Hanson So on August 21, 2014 Company, Consumer Staples

On Wednesday morning, John Mulligan, Targets (NYSE:TGT) CFO bombarded attacked the company’s Q2 earnings with his questions. The earnings showed its share of strengths and weaknesses.

The projection of results that Target (NYSE:TGT) had on August 5 were matched. Its quarterly sales remained flat with positive results only in the quarter’s last six weeks. There was an increase of 30 percent in digital sales and 60 percent in mobile visits compared to last year.

The comparable sales of the company depends a heap on both mobile and digital. However, store traffic is still down; having said that it has somewhat improved as compared to its fourth quarter back in the year 2013.

Mulligan stated that according to Target (NYSE:TGT)’s internal metrics customers have almost forgotten about the data breach mishap. Whatever mistrust is still there has no impact on the store’s business and will eventually be forgotten.

Second quarter sales of Target (NYSE:TGT) in Canada increased by 63 percent; these sales results were below what the company had been expecting. Mulligan states that Target (NYSE:TGT) still needs work before guests may be called back to stores.

Many of the Canadian customers were not able to buy the exclusive items that they were looking for in Target (NYSE:TGT) stores. This was the same issue with U.S. stores. The company is countering this problem by strengthening the overall supply-chain in order to gain an improved stock position after which it will re-strategize and launch its marketing promotion.

The Canadian store associated did not looking at the empty shelves; therefore some rearranging was done to fill the shelves; however when new shipment arrived the major problem was to find space to place the new merchandise. So the company is working to re-institute corporate standards in stores.

Target (NYSE:TGT) is keen on fixing its corporate standards for both its U.S. and Canadian stores.

‘Old Target’ was well known for its ‘’Merchandising Authority’’ as it processed and offered the latest trends. ‘’recent Target’’ has not been so lucky because customers feel they need to go to outlets like H&M for apparels and West Elm to purchase home goods.

All eyes were on the company when Mulligan stated that Target (NYSE:TGT) lost the ‘’Merchandising Authority’’ that it once had. He added that steps will be taken to make sure that it regains this loss, but it will take some time. This however will take time as new product launches take a time period of six-nine months.

Target (NYSE:TGT) aims at creating a hype in the market for its products that go both in physical stores as well as on their website. The company started with re-designing its baby products after which it plans to deal with its apparels.

Promotions will definitely increase in Q4 but the environment is a challenging one with competitors on the rise; retailers are spending insane amounts of money of promotion. However, the best shot that Target has in 2015 is by regaining its Merchandising Authority title, which might bring back its in-store traffic and increase the online store’s popularity.

To regain the throne Target will have think about innovative products and separate itself from the crown of its competitors.