Target's Strategic Approach to Engaging Hispanic Demographics and Technology Trends

1. Target Case Study Group B: Nawal Harris, Megan Osborne & Cristina Villarreal

2. Introduction • Target’s Origin • From the Dayton Dry Goods Company which was founded in 1902 by George Draper Dayton. • First Target store • Roseville, Minnesota • Original Business Goals • Excel in terms of price, product offerings, customer service, community involvement, value and the consumer shopping experience. • Target is leader in strategically creating methods to grow their business • In 1988, Target redeveloped technological efforts of their UPC bar codes. • The company became the first mass merchandiser to introduce UPC scanning at Target stores and distribution centers. • Target has continuously a leader in cultivating community efforts • Has began to capture its latest target demographic, the Hispanic female. • Target has expanded its Hispanic grocery assortment, healthcare and entertainment departments in the Houston, Dallas, San Antonio, San Diego and New York markets.

3. Changing Demographics • By 2050, 1/3 of Americans will be from Latin American descent • Increase in Hispanics, highest purchasing power nationwide • Improving education levels, technological skill and a narrowing average household income gap • Median age: 28 years old • In the range of new homebuyers • In the next decade Latinos will represent a large portion of residential purchasing, as well as groceries, clothing and electronics • The Millenial Generation • Born between 1980 and 2000 • Largest generation in history • Extreme buying power • Texting, social media and all things internet

4. Economic Power Is Shifting • Hispanic women pursuing independence and personal achievement • Challenging household dynamic • 86% are making purchasing decisions • Needs reflect those of large families and include products such as many food categories, oral hygiene products, bottled water, laundry detergent and paper products • More connected to technology • Use to stay connected and maintain culture

5. Current SWOT Analysis

6. 2012 Sales Growth By Department

7. What’s Missing? • Increase in usage of technology within Hispanic Demographic • Smartphones • 28% of Hispanics are more likely to own a smartphone than non-Hispanics • Deficiency in mobile marketing • U.S. companies are not doing enough to make mobile apps accessible

8. Gender Male 22 respondents21% Female 81 respondents 79% Age18-25 37 responses 36%26-35 30 responses 29%36-45 17 responses 17%46-55 14 responses 14%56-over 5 responses 5% Education High School/ GED 9 responses 9% Some College 33 responses 32% 2-year College 19 responses 18% 4-year college 29 responses 28% Masters 13 responses 13% Ethnicity White 23 responses 22% African American 24 responses 23% Hispanic/ Latino 46 responses 45% Asian/Pacific Islander 7 responses 7% Other 3 responses 3% Employment Status Student 26 responses 25% Unemployed 7 responses 7% Employed 71 responses 69% Other 5 responses 5% Annual Income Under $25,000 35 responses 34% $25,001 - $49,999 29 responses 28% $50,000 -$74,999 23 responses 22% $75,000 - $99,000 7 responses 7% $100,000 and over 9 responses 9% Basic Demographics for Primary Data Marital Status Single 51 responses 50% Married 39 responses 38% Divorced 11 responses 11% Widowed 2 response 2% Number of Children None 54 responses 52% One 25 responses 24% Two 11 responses 11% Three 4 responses 4% Four or more 9 responses 9% Total number of responses: 103

9. What do you find most attractive about Target? Price 15 responses 15% Product Selection 59 responses 58% Customer Service 5 response 5% Location 5 response 5% Atmosphere 18 responses 18% How may times a month do you shop online? Once a day 13 responses 13% Once a week 31 responses 30% Once a month 45 responses 44% Never 14 responses 14% How many times a month do you use your smartphone to shop online? Once a day 17 responses 17% Once a week 16 responses 16% Once a month 35 responses 34% Never 34 responses 33% How do you compare the value Target provides against their competitors? Competitors are better 23 responses 23% Same as competitors 29 responses 28% Provide better value 50 responses 49% Do you follow Target on social media websites such as Facebook or Twitter? Yes 23 responses 22% No 80 responses 78% As a consumer, what compels you to follow a retailer on social media? Contests 8 responses 8% New product announcements 19 responses 19% Fashion tips & trends 28 responses 27% Deals & Discounts 66 responses 65% Don’t follow any 24 responses 24% Survey Questions Would you consider using a bilingual mobile app? Yes 47 responses 46% No 56 responses 54% Were you aware Target had a mobile app? Yes 46 responses 67% No 23 responses 33% • Target • Social media • Online shopping • App awareness Approximately how many game apps have you downloaded on your mobile phone in the past year? 010 responses 14% 1-541 responses 59% 6-10 12 responses 17% 10+ 6 responses 9% If your preferred language is not English, would you be more interested in using an app that was in your preferred language? Yes 29responses 42% No 2 responses 3% Prefer English 38 responses 55% Would you be more interested in a company’s mobile app if there was a game that allowed you to earn discounts? Yes 47 responses 66% No 24 responses 34% Total number of responses: 103

10. Making Target’s App Multilingual • Focus on Spanish • Increase brand recognition and loyalty among Hispanic market

11. Inclusion of a Game • 2012 Hispanic Mobile Consumer Trends Study • 504 respondents stated that 48.3% of apps purchased were games • Ipsos Public Affairs Survey • 76% of 10,000 surveyed said saving money was at least somewhat important • Almost half though saving money was very important and actively searched for discounts daily • Game will be included in existing app for mobile coupons, Cartwheel by Target • Option of connecting to Facebook

13. Game Format • Name: Archer, reminiscent of private label brand Archer Farms • Object: Shoot arrows through produce and household items to conquer levels • Levels include 5-10 individual games

14. Game Format • After each game: choice of 3 coupons, coupon goes to Cartwheel list • Assures discount is relative to shopper preferences

15. Game Format • After each level: shoppers gain a badge and another spot on their Cartwheel • Game will be modelled after popular games among female Millennial generation: Angry Birds, Candy Crush Saga, Plants vs. Zombies

16. Promotion • Social networking & in-store promotions • Promoted on Facebook • Catalina promotions • Coupons are highly sought after, ensures shoppers will see the promotion • Contests among sales associates • Motivation for employees to market

17. Post Solution SWOT Analysis