Copyright 2014 Kantar Retail 1

August 2014
The Five Slides You Need:
Target
Copyright 2014 Kantar Retail
Copyright 2014 Kantar Retail. All Rights Reserved.

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Disclaimers
The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views
expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.

This seminar is not endorsed or otherwise supported by the management of any of the companies covered
during the course of the workshop or within the following slides.

Copyright 2014 Kantar Retail
S W O T
OPPORTUNITIES
Price comping limits gross margin in consumables/commodities
but consumer still perceives that prices are higher
Out-of-stocks more problematic with lean inventory management,
especially in consumables and sale items
Slow to respond because of Inflexible culture and bureaucracy
Margin implications as consumable sales share grows, as well as
higher penetration of 5% Rewards
Very narrow margin of error, small deviations become expensive
Urban site growth is on pause
Planning calendar can limit ability to make last minute changes
Multichannel is limited and behind biggest competitors
Shopper penetration continues to trend downward
Strong brand recognition and reputation for innovation
Market positioning leader
Good real estate
Loyal core guest with higher disposable income vs. competitors
Clean stores, wide aisles, and very shoppable
Efficient supply chain geared for lean inventory management
Strongly coordinated social media campaign capabilities
Branded credit and debit card product, the REDcard, offers a
strong and simple value proposition
Excellent corporate reputation for charitable giving (St. Jude's,
Education, Arts, etc.)
Strong and popular exclusive/private label brands in discretionary
New store segmentation process & tools to optimize assortment
Converting the shopper to increase visits through fill-in trips for
food and frequently purchased categories and then purchase more
discretionary items
Urban CityTarget and TargetExpress format pilots have been
successful, particularly with garnering high foot traffic, and the
formats much smaller stores will have increased site availability
Capturing Millennial shoppers via mobile tools, social media, and
other digital vehicles
Developing greater integration between physical store, website,
and mobile experiences
Communicating the "Pay Less"/price comp message to different
guest segments
New leadership speeding up decision making
Increasingly tight inventory controls potentially restrict sales and
limit flexibility when there is suddenly unexpectedly high demand
particularly with recent SKU rationalization
Repeated OOS in commodities may frustrate shoppers who will
dismiss PFreshs fill-in value proposition, reducing trip frequency
Continued shrinking shopper base
High-level transitions may lead to uncertainty on strategic continuity
Target's historical "best guest focus still hamper efforts to expand
beyond its most loyal shopper base
High costs and low sales in Canada must be quickly improved in
order to justify long-term market viability
STRENGTHS WEAKNESSES
THREATS
Copyright 2014 Kantar Retail
New Leadership, New Priorities for Growth
Following the 2013 holiday data breach, Target confronted its immediate and significant long-term sales and shopper
penetration challenges. Corporate CEO Gregg Steinhafel and Target Canada President Tony Fisher both left the company,
and were replaced by Brian Cornell and Mark Schindele, respectively. The company announced a three-pronged plan to
improve its performance:
Increase U.S. Traffic and Sales: U.S. physical store sales represented 95% of Targets overall revenue in 2013, and will
continue to be a supermajority of sales over the next five years. Target will focus on three key strategies for the U.S., and is
testing its newest TargetExpress format.
Merchandising newness and innovation: Target will continue to assert differentiation in products through exclusives, new
items, and private brands, with flagship categories in home and apparel. Target is also emphasizing a more curatorial
approach for its consumables by offering programs that highlight Expect More solutions that avoid direct price
comparisons and protect margin.
Presentation excitement: Target seeks to drive Expect More differentiation with personalized service to demonstrate
value beyond a fulfillment center. Beauty Concierge is now in 400+ stores, Baby 360 has expanded to 200+ stores, an
enhanced apparel presentation with mannequins will be in 600 stores by fall, and a few stores are testing a more
interactive electronics layout.
Irresistible offers and promotions: Target continues to sharpen its price messaging and tactics. Achievement of deeper
discounts is now encouraged through the stacking of limited time offers, REDcard savings, the Target low-price
guarantee, and Cartwheel coupons.
Significantly Improve Performance in Canada: Target plans to move rapidly past its first year stumble through a three-
pronged approach, including improving in-stocks, hone pricing, and expand the merchandise assortment.
Lead in Omnichannel: While Target has made significant advancements in digital, mobile, and omnichannel efforts, the
retailer aims to move faster to eliminate barriers and create a seamless guest experience. The retailer has significantly
expanded the digital team and has pushed hard to expand its current non-store offerings. Cartwheel celebrated its first year,
and guests can now purchase items through the Target and Target Style Instagram account. Targets subscription service
expanded to over 1,500 SKUs in baby, food, OTC, personal care, pet, and office supplies. Over one million store pickup
orders were placed by spring 2014, and Target is now testing store to home delivery.
Rebuilding the Expect More. Pay Less proposition
Source: Kantar Retail research and analysis
4
Copyright 2014 Kantar Retail
Aligning with Target
Reinvigorate the Expect More.Pay Less proposition
Reverse penetration declines among all guests
Assert national brand proposition in the face of increased private
brand emphasis
Look beyond REDcard for collaboration opportunities
Co-merchandise with out-of-category brands/PLs
Enable cross-shopping of discretionary goods
Support Targets omnichannel efforts
Collaborate on CityTarget or TargetExpress pilots to expand
urban penetration
Stay ahead of flexible fulfillment and mobile initiatives
Build strategies that enable guest personalization
Proactively work with Target Canada to regain guest trust
Supplier Opportunities
5
Source: Kantar Retail analysis

Partner with Target on its Innovation Levers
Copyright 2014 Kantar Retail
H1 2014
Shopper Profile
All Primary
Household
Shoppers
Monthly
Target
1

Shoppers
Age
1824 5% 6%
2534 17% 25%
3544 18% 24%
4554 20% 19%
5564 19% 14%
65+ 21% 12%
Household Income
<$25K 25% 12%
$25K$49.9K 25% 21%
$50K$74.9K 18% 20%
$75K$99.9K 11% 16%
$100K+ 21% 31%
Presence of Own Children <18 in Household
Yes 23% 33%
No 77% 67%
Top 5 Retailers Outside Mass Channel Cross-
Shopped by Target
1
Shoppers (H1 2014)
Amazon.com 66%*
Walgreens 43%
Kohls 42%
CVS/pharmacy 40%
The Home Depot 39%
Target Shoppers
6
Target
1
Shopper Cross-Shopping in
Mass Channel (H1 2014)
Walmart/Walmart Supercenter 60%*
Kmart 15%
*Read as: 66% of Target shoppers also shop at Amazon.com
*Read as: 60% of Target shoppers also shop at Walmart/Walmart Supercenter
Note: Bolding/highlighting indicates a significant difference between column
percentages (95% confidence level)
Percent of U.S. Households Shopped
Target
1
:
32%
1
Consists of Target general merchandise stores and SuperTarget
Source: Kantar Retail ShopperScape
,
JanuaryJune 2014
Copyright 2014 Kantar Retail
51.6 51.9
53.8
56.1
59.0
59.8
61.2
62.6
63.8
65.2
66.5
10.1
10.4
10.8
11.2
11.6
11.6
11.6
11.6
11.7
11.7
11.7
0.1
0.3
0.4
0.5
0.5
0.6
0.7
1.2
1.1
1.2
1.2
1.2
1.4
1.7
1.9
2.1
2.2
2.4
2.1
1.9
1.6
1.4
1.3
64.9
65.4
67.4
69.9
73.3 73.1
74.8
76.5
78.1
79.7
81.3
0
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
U
S
D

B
i
l
l
i
o
n
s
Target Discount SuperTarget CityTarget target.com Target Credit Card
Target U.S. Revenues by Core Division
Source: Company reports and KRIQ.com

7
TGT U.S. goal
is USD mid-80
billion in 2017
*Target sold its
credit card to TD
Bank in March
2013
Copyright 2014 Kantar Retail
Contact:
8
Leon Nicholas
Senior Vice President
617-912-2871
Leon.Nicholas@KantarRetail.com


Amy Koo
Senior Analyst
617-912-2872
Amy.Koo@KantarRetail.com