Brick and mortar retail stores have long been threatened by the steady juggernaut of online sales and the ease of shopping from your couch. Recently, however, two large retail mainstays have experienced promising turnarounds in part through thoughtful remodels that emphasize pop-ups, partnerships, and flexibility.
After a slew of ongoing struggles leading to poor earnings reports, in Q1 of this year Target announced a $5 billion investment to open 30 new stores and remodel over 130 locations. So far it seems as if the investment is starting to pay off, although CEO Michael Fiddelke acknowledged the brand's recent turnaround is still in its early stages. "We will not confuse this progress with potential," he said.
The driving factors behind Target's quarterly increase of net sales by 6.7%? Axios reports that the brand has focused on returning to its roots, doubling down on "style, design, and value" and investing in new store designs and remodels.
Most interestingly, Target has been keeping a finger on the pulse of trendy drop culture, a marketing strategy where brands meter out the release of limited-edition products at specific times and locations. The retail giant has successfully partnered with brands like Roller Rabbit and Pokémon to generate sales buzz for must-have items available at their locations for a short window.
Executives reported that they expect net sales growth of 4%, a 2% increase over previous projections. They plan to remain flexible around future opportunities but are also scoping "its largest food reset in more than a decade," plus extensive investment in overhauling its home business and in debuting Target Beauty Studios.
Another Minnesota-based retail mainstay has been making headlines with its savvy growth plans. Best Buy's soon-to-be CEO Jason Bonfig boldly asserted last month that the electronics seller is "not just a retailer anymore" and plans to transform the brand into a retail media, advertising, and technology company.
Its path to success? Growing its marketplace of third-party sellers and expanding non-electronics categories such as collectibles. Best Buy intends to support smaller markets with a more curated assortment of products by opening "medium- and small-format locations" throughout the country.
The biggest surprise for the brand, however, is its partnership with IKEA. Announced last November, select Best Buy stores in Texas and Florida will feature IKEA "shop-in-shop" kitchen and laundry planning studios. Shoppers are able to browse a 1,000 square feet space and consult with IKEA staff on kitchen and laundry room designs. The best part? They can consider Best Buy's selection of appliances right there in the same spot. The IKEA studios have been planned across at least 10 locations, with at least six already open for business.
Bonfig announced a strategic consolidation of empty spaces to transform them into experiential activations like Meta virtual reality experiences, AI device testing, and outdoors merchandise from Yardbird, a Best Buy subsidiary.
Target and Best Buy could have gone the way of Sears and Circuit City, dying a slow death as they failed to adapt to the rapidly shifting retail landscape impacted by the proliferation of online shopping. But the two brands have shown that they're unafraid to conduct small experiments and test new formats that align with shifting shopping trends.
Obviously, there's a big risk in completely reinventing yourself in a desperate attempt to reclaim relevance in a time when there's more ways to shop than ever and consumers are becoming more value-focused amidst rising inflation, higher gas prices, and the increased cost of everyday goods.
Best Buy and Target's answer is to focus on strategic investments, electing instead to float a trial balloon of segmented partnerships, pop-ups, experiential activations, and departmental redesigns while keeping their core business focus stable. This approach avoids overwhelming customers with a complete, jarring brand overhaul, instead surprising and delighting people with curated store sections that stand out and drive foot traffic.
A nationwide rollout of departmental overhauls can seem daunting, but the most successful retailers know that in today's highly competitive and fragmented shopping environment, you have to adapt to cultural trends that can make a big impact and cut through divided attention spans with a solution that stands out. We've worked on many department refreshes, burning the midnight oil to install fixtures, place gorgeous millwork, refresh signage and decor, and affix graphics that pop. And every single time we've finished a job, our client looks at the end result and thinks, "Why didn't we do this sooner?"
Take a page out of the Target and Best Buy playbook and consider a strategic refresh of areas within your retail space. Whether you're considering a partnership pop-up, testing an experiential activation, or simply need to overhaul a section of your store that feels dated and out of place, we can be your Proxy to get everything installed quickly and seamlessly. Contact us to learn more about how we can bring your revitalization to life!