Target Corporation (NYSE:TGT) reported that it is introducing its Open House Store on July 10, 2015 so as to make a strong entry into the growing Internet of Things business. The 3,500 square foot space based in San Francisco will sell more than 35 connected home equipments such as smart doorbell, a smart door lock, a Sonos music player and many more. Target Corporation intends to attract the next wave of customers with the new store.
The expert comments
Casey Carl, who is the Chief Strategy and Innovation Officer, said that they have been dependent on market expansion, services and product as means of growth. Although these are doing well, Target Corporation has to be working on other fronts to diversify portfolio. It will also make the portfolio far stronger as a business model, failing which the company’s performance can suffer from all and any competition over time.
The objective
The launch of the new store in San Francisco comes at a time when Target Corporation is working hard to boost declining sales and compete with Amazon.com, Inc. (NASDAQ:AMZN). For the purpose, the company has constantly been working on diversifying the product range that it offers to customers. The new Open House is commenced to get an edge over other competitors including Wal-Mart Stores, Inc. (NYSE:WMT). With the new project, the company shifts its focus on the Internet of Things that Carl stated as ‘impending megatrend offering a multi-trillion-dollar opportunity.’
The competition
Wal-Mart and Target Corporation (NYSE:TGT) were relative late-comer firms enter e-commerce industry, each company only getting serious in the last few years. Due to their late interest, the two companies lost their market share to other online retailers including Amazon. While both still need to make a lot of efforts to catch up with Amazon, each records nearly 3% of revenue through digital commerce. In March, Target announced that it would spend nearly $1 billion in this fiscal to scale up its digital capabilities.
