CMO interview: Turning around Target
- 08 November, 2018 07:37
It’s been two-and-a-half years since Wesfarmers appointed Kmart turnaround champion, Guy Russo, to institute a transformation of ailing sister department store chain, Target, and restore the 92-year brand to its former glory.
While he’s the first to admit Target has a long way to go, marketing director, Kenton Elliot, is proud of the brand and customer-led turnaround to date. Having returned to Melbourne from a stint in Europe and appointed marketing chief just a few months before Russo stepped in, Elliot was under no illusions the task at hand was anything but transformation. Russo’s ability to balance commercials and culture is key to implementing such successful change, he says.
“In order to make such change happen, the first step has been getting the right team and processes in place internally, then gaining clarity on what must be done to get the strategy right,” Elliot tells CMO. “The first part under Guy’s leadership was getting clear on who we are and what we need to do for Target. Then it’s been about putting in place the people and process to deliver against that.”
To this end, Elliot has been working to build the talent pool, team, insights, strategy and creative excellence that put marketing and the customer at the forefront of organisational decision-making.
“It’s about moving marketing from the back to front of the bus in a customer-led way,” he says. “That’s been the challenge we’ve embarked on over the last two-and-a-half years. You need customers at the front and to be able to combine both insight and data to empower great business decisions across the organisation.
“It starts with great insights, which then allow you to create great products, which then allows you to better meet customers’ needs. That’s the journey for Target. This takes time, and you only get that with the support of the CEO and leadership team, driving that agenda.”
Helping Elliot achieve this ambition is the fact that customers insights, from online and store to support, are under his jurisdiction. His team is also responsible for designing product and packaging.
“You make sure insight and customer data supports the decisions upfront and are being put into planning process across design and buyers to create better product,” he explains. “It takes time to put that into place. We’re lucky we have lots of data; it’s now about turning that into action and empowering people to make decisions that allow us to get better product. This then informs our communications approach.”
Defining the customer
What hasn’t changed in 92 years is Target’s core customer: Mum. What Target needed to get back to, however, was products on shelves delivering against that.
“The journey we’re on is ensuring our people are clear on who mum is and what she needs. That’s also about being clear at every touchpoint along the way. So as we create our communications strategy, touchpoints and better customer experiences, everything joins up,” Elliot continues. “The heart of our strategy is making customer experiences easier through all touchpoints.”
To do this, Elliot is striving to deliver clarity on who she is and what she wants using data. As well as insights from the ongoing flybuys customer loyalty program, Target is tapping and uniting a range of information sources to activate a stronger and unified view of the customer in each touchpoint, along with the pain points arising from brand engagement physically and digitally.
“We know working with the right insights and data that you can come out with great products that help her at every level. That is also about using the broad network we have across the country, and prioritising developments online, to make life easier for her,” Elliot explains.
“You have to break things down into single digestible insights the team can use to process and make decisions with confidence. We’re well down the path of a good understanding of our customer journey and the pain points and how we make those bits of data inform better decisions.”
Target is investing in resources and technology to help achieve this. “That’s still evolving as we understand how to use information to empower the right decisions,” Elliot says.
What is clear is the strategy. At Target, this is about putting the customer at the heart of creating quality fashion.
“We’re also focused on ROI versus return on effort, and making sure we’re only spending money on ROI and breaking down projects that will help fix problems short-term, but also improve things long-term,” Elliot says.
The emphasis is on the customer journey, and a core priority for Elliot has been making both online and in-store easy for mum to see and feel products. One way has been through customer research and experiential studies, such as eye-tracking in several stores, to better understand what mum is looking at and the most effective points of communication.
“That’s enabled us to stop doing certain elements that are not effective as she’s not looking at them, and invest more money in areas such as visual merchandising, mannequins and better packaging, which are more effective ways to communicate the product and benefit you’d get,” Elliot says.
Another way insight is being used is in email communications. With EDMs for example, Target is increasingly localising content based on a customer’s history, featuring localised imagery and information on how to find products in-store.
“That proves a much more successful way of driving the right content to consumers at the right time, and we’ve seen good uplift in sales as a result,” Elliot says.
Data insights are equally vital in getting teams internally to shift their thinking and embrace the wider business change.
“You have to use facts to help people move on. That’s been part of the journey for the last two-and-a-half years – getting the customer data to win the hearts and minds of the team and help them refocus on making the right business decisions confidently,” Elliot says. “If we can win the hearts and minds of the teams internally, we’ll win the hearts and minds of customers and gain preference across the country.”
Building alliances and collaboration
Marketing’s cross-functional alliances have evolved in line with the broader turnaround effort. One important step Elliot says he’s made was getting the marketing strategy on the office wall.
“We’re transparent and open about our strategy, our target customer, and how we create great products for mum when she wants them and at price she wants to pay and quality she expects,” he says. “That has enabled us to build great engagement across all parts of the business, whether it’s HR, financial, operations, designing or buyers.
“Everyone in the business needs to live and breathe the strategy and understand who our customer is so we’re designing and creating great products for them.”
To ensure product and execution is consistent, meanwhile, marketing has formed a ‘Design Council’ over the past 18 months, incorporating all heads of design creating products, plus heads of creative, brand and CX.
“The council decides on product design, as well as the execution through the line through every touchpoint,” Elliot says. “That consistency will enable us to have a much more consistent execution whatever the touchpoint. Mum needs to see a consistent framework across Target. That’s an important step change we’re making across the business.”
Elliot says he’s also evolved his function’s talent mix to bring in better skills and capabilities internally, as well as improve culture in a way that favours collaboration.
“While you’ll have natural tensions across different functions, that tension needs to be built on strong values to get the best outcomes,” he comments.
Up next: How this is transforming Target's marketing and advertising executions
It’s this consistency in strategy Elliot believes has led to stronger and clearer briefs and given Target’s lead agency, AJF, more freedom to do better work.
Starting with winter/fall in May, marketing and online creative has had a more fashion-led approach showcasing the quality of product, style and way it comes together, he says. The latest example is Target’s new ‘Play Wild’ kids campaign, which celebrates product and is based on a ‘getting back to nature trend’ product range designed by its Design Council.
Shot in the Redwoods in the Otways, the campaign, which kicked off on 16 September, celebrates kids running wild to create their own magical world and individual look. It’s running across TV, cinema, online and social media and features the Skrillex track, ‘Bangarang’.
“Identifying and articulating those trends allows us to develop a set of communications that help us celebrate the product in more engaging ways,” Elliot says. “The results of the campaigns combined have been really positive for us, and helped us understand that communications code.
“We have the full support from the leadership team to build brand preference for Target as a quality fashion retailer. We’re lucky as we have a brand that’s well known, with great products starting to come through enabling us to tell much better stories.
“Our womens activewear campaign [launched in August and including TV, online, social and gym advertising] has also shown when you get great product and you combine it with great creative advertising, it works.”
Supporting this is a broad media mix focus aimed at driving mass reach. “We need to get consistent product with brilliant marketing that re-engages our customers to come back,” Elliot adds. “It’s also about getting the store network right so it makes it easy for mum when she walks in the door.”
It’s this approach Elliot believes will help Target retain relevance in the face of Amazon’s Australian market expansion. “Our focus is on getting great product and what we can control. And that is getting our designers to create great products that meet mum’s needs,” he says.
“We’re really focused on embracing the change and building one customer voice across the business. The second thing is making sure my team has the right processes and creative freedom to do better work. If we get these two things right, the commercial [success] will follow.”
What’s clear from the financials is there’s still a way to go as Target completes its ‘reset’. According to 2018 financials filed by parent company, Wesfarmers, Target’s focus remains on improving product fashionability and quality, accelerating the online proposition and optimising the store network, progressive store renewal trials and resetting space, and further reducing end-to-end costs and working capital.
Meantime, total sales growth remains in negative, although earnings growth has come thanks to a combination of direct sourcing, lower markdowns and improved sales mix and productivity improvements. Over the past year, the department store cited growth in online, menswear and homewares, and advanced its online offering with expanded ranges and improved capabilities.
Through all of this, Elliot believes the attributes marketing needs the most are positivity, perseverance and clarity.
“Marketing is an exciting space to be in, and it’s our job is to help drive positive growth across the business,” he concludes. “I’m excited about what we have done so far but also what we will be able to achieve moving forward. That’s about being customer led and creating quality fashion.”
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