 |
|
|
|||||
For its first six decades in business, Target sat on the sidelines when a new U.S. president entered office. But on January 10, ahead of Donald Trumps return to the White House, the big-box retailer broke with tradition and donated $1 million to the Trump Inaugural Committee. Two weeks later, the corporate giant offered the new administration a different kind of gift: It announced that it was pulling back on its diversity, equity, and inclusion commitments, eliminating programs designed to increase its Black workforce and the number of Black-owned brands on its shelves. The backlash was swift. Rallied by civil rights leaders like Jamal Bryant and Al Sharpton, customers began boycotting Targets stores. This is the same retailer, after all, that had mobilized to support the Black community in the aftermath of George Floyds murder, which took place 10 minutes from its headquarters. Within a year of that tragedy, the company had committed to spending $2 billion with Black-owned businesses and adding products from more than 500 Black-owned brands to its shelves by the end of 2025. Now even the web page that tracked these commitments has disappeared. Many saw Targets abrupt capitulation to the Trump administration as a sign that it had never really believed in social justice in the first place. For months now, consumers have been registering their unhappiness by staying clear of Target. Since late January, weekly foot traffic across Targets fleet of nearly 2,000 stores has been down between 3.8% and 7.7% compared to last year, according to Placer.ai, which tracks people’s locations based on their mobile data. Target’s stock has plunged around 40% over the past year. The company is also facing the consequences of Trump’s trade war. Even a 30% tariff on China means that the 30% of products from Target-owned brands that are still produced in that country will be much more expensive. And then there are the innumerable goods from other brandsand other countriesimpacted by Trumps so-called reciprocal tariffs. Theres no question that Target is dealing with a barrage of setbacks this year, but the retailers troubles date back even further. (Target turned down Fast Companys request for an interview, but responded to questions via email.) After explosive sales growth in 2021 and 2022, the company has been flatlining: Net sales dropped $1.7 billion, or 1.6%, in 2023. Last year, they declined as well, though comparative year-to-year sales were up about 1% (2023 was a 53-week year). Target was projecting 1% growth for this yearbefore the tariffs were announced. Meanwhile, CEO Brian Cornells 2024 pay, which is tied to the companys performance, dropped to $9.9 milliona 45% decline from the previous year. It wasn’t so long ago that Target had a reputation for providing a delightful shopping experience, with tidy, brightly lit stores and shelves stocked with well-designed products at affordable prices. Under Cornell, who became chief executive in 2014, the company built up a portfolio of more than 45 private-label brands, which are now worth more than $31 billion in annual sales. The retailer also became the exclusive launch partner to dozens of pioneering direct-to-consumer brands, helping to cultivate the retailer’s Tarzhay mystique. But that charm has been fading due to a series of missteps that the company made coming out of the pandemic. For one, it overestimated demand and bought too much inventory, which weighed on profits. (The company’s operating income dropped by more than 50% in 2022. And though it’s recovered ground in recent years, operating income was still down 38% last year from its 2021 high.) As the company wrestled with this excess inventory, the store experience seem to degrade: Customers started complaining about messy, disorganized aisles and long checkout lines. More recently, Target’s reliance on selling discretionary products, which make up 50% of its business and most of its owned brands, has held it back at a time when consumers are feeling the pinch of inflation. Target remains one of the biggest legacy brands on the American retail landscape, generating $106.6 billion in revenue last year. The question now is whether it can pull itself back from the brink, or whether its best days are over. [Photo: Smith Collection/Gado/Getty Images] How Shopping at Target Stopped Being Fun The weekend before Easter, Target dropped a limited-edition collaboration with Kate Spade. Collabs like these were once highly anticipated affairs that drove shoppers into stores. A decade ago, shoppers mobbed stores to get their hands on items from Target’s Lilly Pulitzer and Missoni collections. But on the morning of the Kate Spade drop, only a handful of women showed up at my large store in the Boston suburbs. When the doors opened at 7 a.m., customers found employees still unpacking Kate Spade merchandise from cardboard boxes and putting it on shelves. Fifteen minutes later, as shoppers got impatient, a manager said they could just go through the boxes themselves to fish for the bracelets and purses they had come to buygiving the whole experience more of a bargain-basement vibe than a partnership with a beloved, high-end designer. The problems continued from there. While the store has a dozen changing rooms, only one was unlocked. Customers tried to find an employee to open up the other stalls, but nobody was available. Some shoppers just gave up on their quest, abandoning piles of clothes on the floor. Target says the Kate Spade collab resulted in the companys largest launch day for a limited-time collection in the past decade. Even so, Placer.ais data shows that there was a 4.7% drop in foot traffic at Target stores compared to the previous year during the week of the collections launch. Shopping experiences like mine seem to have become increasingly common at Target, according to our own reporting and reporting from The Wall Street Journal and Vox. “The stores are disorganized, product is never where its supposed to be, and I’ve seen expired product on shelveswhich is the worst thing you can do as a retailerand there’s no one you can even complain to,” says Sucharita Kodali, principal analyst at Forrester, who specializes in retail. “These are serious executional problems.” This decline of the in-store experience didn’t happen overnight. For years, Target stood out from low-cost competitors like Walmart and Costco by offering a more pleasant shopping experience than their warehouse-like, no-frills ambience. But things began to devolve in the wake of the pandemic. During the COVID-19 lockdowns, many retailers saw an enormous boost in online sales as consumers used their stimulus checks to shop. Target’s sales exploded by $15 billion, or 20%, in 2020 as it sold customers garden furniture and decor for their home upgrades, and sweatpants for their homebound lifestyle. But consumers’ shopping behavior shifted quickly when society opened back up, a change that caught Target by surprise, according to Mickey Chadha, a retail analyst and vice president at Moody’s. To head off supply chain issues during the pandemic, Target had placed advance orders for products that people would want while stuck at home. But when lockdowns were lifted, suddenly it had a lot of inventory that it couldn’t sell,” Chadha says. “It would take them a long time to recover from that decline in profitability.” Soon after, customers started voicing concerns about messy shelves and long checkout lines. A year ago, Fast Company spoke with Target customers and employees who complained the retailer was understaffing stores. A student at Illinois Wesleyan University wrote an op-ed in her college paper describing how she has found empty shelves and trash on the floors of her local store, and urging college students to take their business elsewhere. Redditors vented that Targets grocery and bakery sections were out of stock, and inventory was often misplaced. Target also put many products behind plexiglass in 2023 in response to a wave of organized retail theft. “Target’s strategy used to be to wow customers with their assortment of exciting, higher-end items in store,” says Nicole DeHoratius, professor of professional practice at Columbia Business School who studies retail operations and supply chains. “But if you can’t touch and feel the products, or even read the packaging, why would you even go to the store?” DeHoratius points out that a poor in-store experience is likely to drive customers to shop online. But this presents another problem for Target since its e-commerce operations are still just a fraction the size of Amazons and Walmarts. For several years Target has invested $3 billion to $5 billion annually to speed up its online deliveries. It’s also partnered with Shopify to bring more brands into Target Plus, its third-party marketplace. These efforts have been working: Targets digital sales now make up nearly 20% of its overall business, generating $20 billion in revenue. But Walmarts e-commerce sales, which reached $100 billion in 2024, are growing roughly twice as fast as Targets. And Walmart continues to invest in its delivery infrastructure. In February, it announced that it was offering same-day delivery service to 93% of U.S. households (Target reaches 75% through its delivery service, Shipt). Walmart followed up with news in April that it has redesigned its approach to shipping and could now serve an additional 12 million households. “Walmart’s online shopping experience is more sophisticated,” says DeHoratius. “If a Walmart customer doesn’t shop in store, [it] can capture that sale online, but Target is unable to do that.” [Source Photo: Zoshua Colah/Unsplash] Choosing essential groceries over affordable luxuries Target is working through its operational issues. A year ago, in an acknowledgment of customer frustrations with the slow checkout process, Target said it would open more checkout lines and launch express self-checkout with limits of 10 or fewer items. But a bigger issue for the company is that its unique value propositionof offering better-designed products at good pricesmay no longer resonate with American consumers. The Kate Spade collaboration was part of Target’s 25-year-long strategy of partnering with high-end designers, from architect Michael Graves to fashion designer Proenza Schouler, to create more accessible versions of their products. Target has also invested heavily in its more than 45 in-house brands across the fashion, home, and beauty categories. Many of these lines closely mimic the aesthetic of other popular brands. (Auden underwear is a cheaper alternative to ThirdLove; Open Story luggage is similar to Away’s minimalist suitcases.) “Target’s cachet was that they offered good products at a decent price,” says Chadha, the VP at Moody’s. “Their private-label strategy was very successful because you could only get those products at Target, and their margins were very high.” Target’s appeal to middle-class consumers was that they could visit a store to buy essentials like toilet paper and dish soap while also browsing for affordable luxuries. This led to the “Target effect” of stopping at the store to buy a few basics, and leaving with $100 worth of products you didn’t know you needed. But over the past four years, consumers have consistently felt worried about the economy. And in this environment, they are less eager to spend on discretionary purchases. This gives Walmart yet another advantage. For one thing, Walmart’s entire brand centers on offering low prices. (Since 2007, Walmarts motto has been Save money. Live better.) Walmart is also continuing to expand its grocery offerings, which now make up roughly 65% of the store, and is currently building five new high-tech distribution centers for perishable products. “In an inflationary time, consumers shift from discretionary to nondiscretionary products, which basically means food and essentials,” says Chadha. “Walmart has gained market share because of its food offerings. But it has also improved its own in-house brands, which means customers pick up a few other things on their grocery run.” Targets competitors are, indeed, finding more success with their in-house brands. Costcos Kirkland brand now generates more revenue than Nike, and Walmart’s new private-label grocery brand, Bettergoods, is one of the country’s fastest-growing. (Target’s ultra-cheap Dealworthy brand, launched last year to compete with Amazon and Costco, is also growing quickly.) Though grocery currently makes up 23% of Target’s selection, the company is starting to move that needle. Target generated $23.8 billion from food and beverage in 2024, up $9 billion from five years ago. To keep up with this growing demand, its opened three new food distribution centers over the past two years, bringing its total to eight. Its opening yet another in 2026. [Source Photo: Justin Sullivan/Getty Images] Then Came the Boycott Target was already on shaky ground as 2025 dawned. And then Trump took office. For years, Target had positioned itself as a progressive company, supporting Pride month with rainbow merchandise and running commercials celebrating Black joy for Black History Month. Chadha points out that Target’s social justice stance made sense because it generally aligned with the company’s customer demographics. Walmart tends to have very large-footprint stores in rural locations that are more right-leaning; Target, conversely, tends to have smaller stores in more left-leaning urban areas. “Geography matters,” says Chadha. “Targets stores are in places that generally skew blue.” Target took a particularly bold stance in support of the Black Lives Matter movement in 2020. In addition to its commitment to buy inventory from Black-owned businesses, Target vowed to increase its Black workforce by 20% over three years, to donate $100 million to support Black-led nonprofits, and to offer scholarships to students at historically Black colleges and universities (HBCUs). The directive came from the top. In an interview with the Economic Club of Chicago a year after George Floyds murder, Cornell said the killing had compelled him to rethink his leadership at Target. I recognize that its time to take it to another level, and that as CEOs, we have to be the companys head of diversity and inclusion, he said. But when Trump took office in January of this year, his administration took aim at DEI, saying it would draw up a list of private companies that could be investigated for “illegal DEI discrimination.” Target abruptly announced it was pulling back on all of its DEI initiatives. Target was far from alone in capitulating: Dozens of companies, including Amazon, PepsiCo, and Walmart, quickly eliminated DEI programs. But Target’s reversal was more painful, says Jamal Bryant, the Atlanta-based pastor who helped kick-start the Target boycott. To Bryant, it revealed how superficial and performative Target’s promises to the Black community had been. “We’ve never asked Target for a handout; we were looking for a handshake,” he says. “And for Target to withdraw that hand so suddenly was disappointing.” On February 2, Bryant used his pulpit at New Birth Missionary Baptist Church in Stonecrest, Georgia, to urge people to fast from shopping at Target during Lent, the 40-day period before Easter. He wasn’t sure whether the boycott would have any impact. But according to Placer.ai, foot traffic to Target across all stores has been down by at least 4% every week of the boycott compared to last year. Meanwhile, Costco and Walmart were seeing increases in foot traffic. “I was shocked,” Bryant says. “You have to understand, this is the largest boycott by Black people since the Montgomery Bus boycott.” For weeks, Target didnt acknowledge the boycott. But days before Easter, Cornell sat down with Bryant and Reverand Al Sharpton, who had also supported the boycott. The civil rights leaders asked Target to restore its internal DEI efforts, eposit $250 million into Black-owned banks, establish new partnerships with HBCUs, and renew its commitment to invest $2 billion in Black-owned businesses. Cornell committed only to the last issue, so Bryant says the boycott is still on. (The week of April 28, Targets foot traffic was down 5% compared to last year, according to Placer.ai.) The question is whether there’s any way for Target to bounce back from these many intersecting crises. The analysts I spoke with believe there is still time for Target to turn things around. For one thing, Target is a very big company; it has the resources to invest in fixing its operational problems and making inroads with the communities it has alienated. It wouldnt be the first big retailer to rebound. Just a decade ago, Walmart’s stock plunged amid worries that it couldn’t keep pace with Amazon. But Walmart managed to beef up its e-commerce operations and is in a much stronger position today. Kodali, the analyst at Forrester, acknowledges that Target is at a low point, but she believes it can recover. “Retail is cyclical,” she says. “Target has lost its mojo, but it is not irreparably damaged. It needs to refresh its store experience, its technology, its employee training programs, but it can make a comeback. Target is too big to fail.” She says that 30% tariffs on Chinese goodsif that rate stickscould actually help Target, along with other value retailers. “The tariffs will affect inflation more than lower sales for any mass merchant,” she says. As long as Target can improve its shopping experience, it could be a destination for what she calls “essential goods.” Last week, Cornell sent around an email to staff acknowledging the “tough few months” Target has faced this year. “There’s been a lot coming at usmacro challenges in the environment,” he wrote, “but also headlines, social media and conversations that may have left you wondering: Where does Target stand? What’s true? What’s not?” He noted that “silence” from the highest levels of the company have exacerbated this uncertainly. Cornell has yet to speak publicly about the company’s DEI rollback, and his message to employees didn’t mention it either. “I want to be very clear,” he wrote. “We are still the Target you know and believe in.” Whether he was stating a fact or an aspiration, however, remains to be seen.
Category:
E-Commerce
Common personal care and beauty products like lotions, soaps, shampoos, eyeliner, and even eyelash glue can contain formaldehyde or preservatives that release formaldehydea known carcinogen that has been linked to cancer. And Black and Latina women could be at particular risk. Formaldehyde is a preservative (its a key ingredient of embalming fluid) and so its sometimes added to beauty products as a way to extend their shelf life and inhibit the growth of bacteria or mold. Formaldehyde-releasing preservatives are seen as an alternative to formaldehyde, but these chemical compounds do the same thing: they extend shelf life while slowly releasing formaldehyde into the product over time (just how much depends on multiple factors, but studies suggest longer storage times and higher temperatures lead to more formaldehyde released). That formaldehyde could then be absorbed by the skin, and even though the amount may be small, experts say low levels of formaldehyde still pose health risks. Personal care products are often used frequently, so repeated exposures could add up. These chemicals have already been found in hair-straightening products, which are predominantly used by Black women. A new study, recently published in the journal Environmental Science & Technology Letters, found that this risk extends beyond chemical hair relaxers to all sorts of beauty products: lotions, shower gels, face creams, shampoo and conditioners, hair oils, eyeliner, eyelash glue, and so on. In that study, researchers asked a group of Black and Latina women in Los Angeles about their use of personal care products over a week. More than half reported using items that contain formaldehyde-releasing preservativesand many of those products are ones that the participants used daily, or multiple times in a week. Finding formaldehyde in beauty products For the study, 64 Black and Latina women were tasked with tracking all of their beauty product use, logging the information in an app developed by the Silent Spring Institute, a research organization focused on the environmental causes of breast cancer. (Silent Spring chemists authored the study, and it was part of a larger research effort between Silent Spring, Occidental College Black Women for Wellness, and Columbia University.) That app also asked them to take a photo of each ingredient label, which allowed the researchers to analyze the ingredient lists for formaldehyde and formaldehyde-releasing preservatives. Formaldehyde-releasing preservatives often go by complex chemical names like 1,3-dimethylol-5,5-dimethylhydantoin, also called DMDM hydantoin or DMDMH, meaning they dont actually appear as formaldehyde on ingredient lists. Fifty-three percent of participants said they used at least one product with formaldehyde releasers on its ingredient label, and DMDMH was the most common. Of the items that contained any formaldehyde-releasing preservatives, DMDMH was in 47% of skincare and 58% of hair products. The fact that these toxic chemicals are in so many products highlights the health risks women face, particularly Black and Latina women. One woman in the study used three products with formaldehyde-releasing preservatives: a leave-in conditioner, rinse-off conditioner, and a body wash. Some women used these products multiple times a day, like hand soap or lotion. Over a five day period, 20 study participants used lotions with formaldehyde-releasing preservatives for a total of 76 times. One eyelash glue even specifically listed formaldehyde as an ingredient. The preservatives were also found in hair gels, oils, curl creams, and edge controls, predominantly used by Black women. The study didnt list specific brands or product names containing formaldehyde-releasing preservatives, though it did note that 12 such lotions were from Bath & Body Works. While this study does not specify which of body lotions its participants were using, we rigorously test formulas for all our personal care and home fragrance products, including FRPs to meet regulatory and safety standards, a Bath & Body Works spokesperson said in a statement. Protecting consumers from formaldehyde releasers Formaldehyde exposure is linked to adverse health effects, including increased risk of multiple types of cancer. Researchers say theres been a growing concern about formaldehyde-releasing preservatives, and how personal care products that contain them could pose a risk to women’s health, particularly Black and Latina women. Previous studies have connected the use of hair relaxers to an increased risk of uterine cancer in Black women. Others say these formaldehyde-releasing chemicals arent a concern. Unilever, for example, has a web page about how it doesn’t use formaldehyde as an ingredient but does use formaldehyde donors like DMDMH. It says they’re safe to use, per the U.S. Cosmetic Ingredient Review Expert Panel and Europes Scientific Community on Consumer Safety. Still, in Europe, products with formaldehyde are more regulated. The European Union has banned formaldehyde in cosmetics, and requires any cosmetics with formaldehyde releasers above a 0.001% concentration to have a warning label. The U.S. currently doesn’t ban formaldehyde in cosmetics (a federal ban on formaldehyde and formaldehyde releasers in chemical hair straighteners was considered back in 2023, and is currently stalled after President Donald Trump paused all federal regulations). At least 10 states, including California and Oregon, have enacted or considered laws to regulate formaldehyde in cosmeticseither by banning it, or requiring warning labels for formaldehyde releasers. There has been a drop in products containing formaldehyde in California after the state’s Safe Cosmetics Program began in 2007, but experts say even beyond warning labels, banning formaldehyde releasers completely across the country would be the best-case scenario to reduce risks. The researchers suggest people avoid products containing DMDMH. Silent Spring has resources for how people can avoid formaldehyde releasers, including by noting the other chemical names for such preservatives that may appear on ingredient lists. Black Women for Wellness also has resources for consumers concerned about chemical exposure. Were trying to do the right thing, Janette Robinson Flint, executive director of Black Women for Wellness, says in a statement. But there needs to be more government oversight. We shouldnt have to be chemists to figure out what kinds of products will make us sick.
Category:
E-Commerce
In large organizations, HR usually has a process for documenting concerns about employees effectiveness that can be used either to help fix those problemsor to provide a basis for later termination. One of the central records used for this purpose is the dreaded performance improvement plan, or PIP. If you get called in to see your supervisor and get hit with a PIP, youre likely to experience a range of emotions. Understanding your emotional reaction and how to cope with it is an important part of moving forward successfully. Lets consider a range of emotions you might be experiencing and what you should do: Feeling Grief One possibility is that the PIP comes out of the blue. You may be thinking that work is going fine and you suddenly find out that there are concerns. Because work is often an important part of both your identity and your ability to maintain your life and lifestyle, it represents a tear in the fabric of your life story. And that will trigger a grief process. The five stages of grief described by Elisabeth Kübler-Ross (denial, anger, bargaining, depression, and acceptance) dont necessarily have to happen in that order, but you should recognize that they may accompany the news that you are struggling in your job. You have to resist the urge to act on the basis of these emotions. If you get angry, you should not lash out at your bosses or the organization in email or on social media. If you feel like bargaining, take a beat, and avoid making promises that you will regret later. Instead, give yourself a few days to reflect on the situation. Were you dismissing warning signs about your performance? Are there elements of your job that you have been ignoring? Do you think the organization is looking for a way to show you the exit? After that reflection, schedule a meeting with your supervisor to talk over the situation. In preparation for that session, make a realistic plan for how you will address issues discussed in your PIP. Develop a list of questions you have about the path forward. Wait to schedule that meeting for a time when you feel that you can really hear the answers to your questions. Feeling Relief Perhaps surprisingly, you may find that the PIP brings with it a feeling of relief. You may have been struggling to complete your job responsibilities. Perhaps you feel that youre in over your head. You might even hate your job, but were soldiering on by inertia. If the PIP brings a feeling of relief, it’s probably time to look for a new job. The feelings youre having are helping you see that you can have a more fulfilling work life by changing paths. Make a list of the things you really like about your job, as well as those you dont. Think about the characteristics of a job that would be appealing. Consider talking with your supervisor or someone in HR about alternative paths. Often, your supervisor wants you to be successfuleven if that success means that you should be working elsewhere. They may have great suggestions about a role that would best suit your talents. Feeling Clarity Sometimesparticularly early in your careeryou have a nagging sense that there is something wrong at work. Youre doing your work as well as you can, but feel like youre missing something. You may have the sense that everyone else is working from a different version of the script than you are. In this case, the PIP may actually help to clarify what is going wrong. This can happen when you have a supervisor who is not good at providing regular feedback and coaching. In this situation, you can really dive into the PIP (after taking a day or two to see this as an opportunity, rather than a punishment). Sit down with your supervisor and other team members and talk about the elements of your performance that have raised concern. Ask about training and classes you can take to improve your performance. Find a peer who is good at these tasks and ask for some mentorship. The people who emerge most strongly from a PIP are those who embrace the opportunity for growth and lean into the chance to improve skills. As this process moves forward, talk with your supervisor about how to get more timely feedback on your performance. This conversation is likely to help you improve, and may also provide some feedback to your supervisor that can lead to their growth as well.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||