Target is one of the top discount retailers whose primary source of revenue comes through providing competitively priced products to consumers. Mark has a vast customer base in the US. The main competitors of Target are Wal-Mart and Costco Wholesale. Businesses like Target do not directly manufacture or produce consumer goods, and their job is to obtain these products from contractors and manufacturers at low prices. The industry in which Target operates is currently experiencing a lot of pressure due to the comparative price model that Amazon is running.
Target and other similar natured department stores like Walmart and Costco offer customers an array of consumer goods, and to do this, they have deployed complex inventory management. Their main advantage comes from providing these goods to consumers at competitive prices. For this, Target is dependent on staple products like clothes, household goods, and food.
The sales of Target are greatly affected by the disposable income of its customers. The overall strength of the economy is also interlinked with the retail sales of a target as well as their profitability. Any predictions of their future growth and expansion are solely based upon their constant competition in the market through highly competitive conditions. These factors force retailers like Target to think actively and create workable strategies to keep their market share and possibly increase it.
Usually, Target attracts those customers who have considerably higher incomes. It focuses on the fact that it provides high-quality products at competitive and low prices.
The direct competitor of Target is Costco. Furthermore, Target is also trying to compete against Costco competitors like Walmart by making itself available to low-income households as well. The future of Target largely depends on creating a link to the customers, keeping margins with high profits, and benefiting from the existing economic conditions. That is why businesses like Target must promote products that promote sales and motivate consumers to shop at their franchises.
One of the best strategies to increase growth, sales, and profitability is to open new stores. Target went through many expansions, where it opened new stores throughout the US. Many of these stores provide food, which is one of the leading factors to encourage sales. The competition in the market is so intense that retail competitors often reduce their margin just so that they can retain customers and see a long-term view. Even though a margin reduction strategy may increase the price competitiveness, it still brings lesser profits to the company and its investors.
The company emphasized the delivery operations of Target in December 2019 with the announcement of acquiring Ship, the online delivery service. The Ship is a beneficial tool for Target since it has allowed Target to conduct online sales as well. Today their online sales account for a considerable part of Target’s overall sales. Furthermore, the company is continuously deploying inventory management systems to make sure it receives a higher profit margin.
Costco offers a lower range of brands as compared to Target and Walmart. However, it is focusing on improving its supply chain efficiency.