Target Corporation
Expansion into Urban Markets
Prepared by:
Bhavya Gowda
Eric Rentsch
Jessica Sapick
Maggie Smith
David Wald
Lauren Yaffe
April 6th, 2007
Strategy 470
Professor Lynn Wooten
Table of Contents
1.
2.
3.
4.
Project Scope ............................................................................................................................. 1
Project Goals.............................................................................................................................. 1
Problem Clarification................................................................................................................. 1
Data Collection and Analysis: ................................................................................................... 1
4.1 Primary Information............................................................................................................. 1
4.2 Secondary Information.......................................................................................................... 2
5. Company Analysis: Current Target SWOT............................................................................... 2
5.1 Strengths and Opportunities................................................................................................. 3
5.2 Weaknesses and Threats: ...................................................................................................... 3
6. Customers ................................................................................................................................... 3
7. Competitors................................................................................................................................ 4
8. External Analysis ....................................................................................................................... 5
9. General Recommendations: Customer and Merchandising Strategies...................................... 6
9.1 Target Customer Base........................................................................................................... 6
9.2. Merchandising Strategy ....................................................................................................... 6
9.2a Store Reduction Recommendations ................................................................................ 7
9.2b Store Enhancement Recommendations........................................................................... 7
10. Specific Recommendations: Phasing in Each Customer Segment ......................................... 10
10.1 Phase 1 (Years 0-4):.......................................................................................................... 10
10.2 Phase 2 (Years 4-7):.......................................................................................................... 10
10.3 Phase 3 (Years 7-10):........................................................................................................ 11
11. Location Recommendations................................................................................................... 12
12. Company Analysis: Post-Urban Expansion SWOT .............................................................. 13
12.1 Strengths and Opportunities:............................................................................................. 14
12.2 Weaknesses and Threats: .................................................................................................. 14
13. Organizational Change........................................................................................................... 14
13.1 Structure- Logistics/Operations ........................................................................................ 15
13.2 People- Human Resources ................................................................................................ 15
14. Promotional Campaign .......................................................................................................... 15
15. Conclusion ............................................................................................................................. 16
16. Works Cited ............................................................................................................................ 17
List of Appendices
Appendix A: Issue Trees (Drafts 1-3)………………………………………………….………..21
Appendix B: Customer Interview Questions…………………………………………………….24
Appendix C: Photos from Target Visit…………………………………………………………..25
Appendix D: Current Target SWOT Analysis…………………………………………………...29
Appendix E: Prizm Marketing Segments, Claritas Customer Segmentation of Urban Markets...31
Appendix F: Rankings of Attractiveness of 30 Largest U.S. Cities……………………………..32
Appendix G: Standard Product Mix Change Recommendations to Suburban Store by Aisle......41
Appendix H: Mock-up Photo of Target Kiosk…………………………………………………..42
Appendix I: Michael Porter’s Boston Consulting Group Report…………………………...……43
Appendix J: Product/Service Mix Changes……………………………………………………...45
Appendix K: Ten Most Desirable Cities to Enter………………………………………………..47
Appendix L: Post-Urban Expansion SWOT Analysis.……………………………..……………49
Appendix M: Promotional Advertisement ………………………………………………………51
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Executive Summary
Problem
This report outlines a growth strategy for Target to expand its market share by moving into the
urban sector. A detailed plan to achieve this is included and ensures that Target will maintain its
strong brand image while refocusing its merchandising strategy to serve the urban consumer.
Analysis
After performing extensive research, multiple ways in which Target can best meet the needs of
the urban shopper were developed. To gain urban market share, Target must identify the benefits
sought by the urban consumer and expand its product and service offerings to meet these needs.
By positioning Target appropriately within specified cities and modifying its merchandising
strategy and product mix, Target can successfully enter the urban market and provide consumers
with an enhanced shopping experience.
Key Findings
• Three types of customer segments live in urban areas: the Urban Uptown, the Midtown
Mix, and the Urban Core. Each consumer segment has needs that differ from the other
segments and from those of the typical suburban Target shopper.
• Urban locations may require restricting the size of an urban Target given the densely
populated urban settings and high costs of real estate in prime locations.
• Multiple external factors will impact Target’s ability to decide in which cities to locate
and in what order.
Recommendations
• Expand into urban locations after careful consideration of consumer demographics and
city characteristics.
• Pursue a three tiered implementation strategy tailored to meet the needs of the three
customer segments.
1. Phase One (dominant strategy): Open urban Target stores to serve the Midtown
Mix consumers in years 0-4
2. Phase Two: Open additional stores to target the Urban Uptown consumers in
years 4-7
3. Phase Three: Open additional stores to target the Urban Core consumers in years
7-10 (or in tandem with phase two in years 4-7)
• Employ a standardized urban store merchandising strategy in all three phases to
accommodate the overlapping needs of the three consumer segments. This urban
framework can be achieved by making general enhancements and reductions to the
current format of suburban Target stores.
• Make additional enhancements and reductions to the general urban store framework
during each of the implementation phases to meet the particular benefits sought by each
of the three customer segments.
• Establish rapport with local communities through various promotional campaigns.
The following report outlines the modifications that Target should consider when entering the
urban market, as well as a detailed implementation plan. By leveraging its strong brand equity,
Target will become a market leader in the urban sector.
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1. Project Scope
The scope of this project is to identify how Target can maintain its brand image and best
capitalize on the U.S. urban market by modifying its traditional suburban-format, product mix,
presentation, and promotion.
2. Project Goals
The goals of this project are to accomplish the following tasks:
1)
2)
Create an issue tree to guide primary and secondary research and analysis of project
Identify the urban consumer’s values, lifestyle, and desired shopping experience, as
well as how they differ from those of the suburban consumer
3)
Provide merchandising recommendations including product mix, presentation, and
promotion catered to the urban consumer
4)
Develop a growth strategy and implementation timetable to increase Target’s market
share in the urban sector
Please see Appendix A for detailed project Issue Trees
3. Problem Clarification & Approach
For the scope of this project, urban is defined as a metropolitan area with a densely
populated center of 1,000 people or more per square mile surrounded by a less densely populated
area of 500 people or more per square mile. The two largest considerations in entering the urban
market are determining potential customers and identifying prime locations. Within urban
customers, different segments are identified, as well as how the various needs of each can be met.
Within location, city demographics and characteristics, real estate costs, and store positioning are
considered.
4. Data Collection and Analysis:
4.1 Primary Information
Field research was conducted at the suburban Target on Saline Road in Ann Arbor,
Michigan on March 14, 2007. Researchers spoke to customers and also gathered data that was
useful for understanding the layout of suburban stores.
Interviews: Questions were drafted and asked to customers regarding their shopping experiences
at Target. Each question addressed issues related to store cleanliness, design layout, customer
service, product mix or additional services. See Appendix B for a detailed list of questions &
answers.
Observations: Areas observed by researchers included store layout, product mix, and in-store
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shopping experience. See Appendix C for selected visual representations of the store layout and
product mix offerings.
4.2 Secondary Information
Secondary information was gathered from numerous sources to understand Target’s current
retail assets and potential future opportunities in urban areas.
Resource
Data Gathered
U.S. Census Bureau
Statistics on population, income, racial breakdowns, and real estate
costs in urban U.S. cities
Statistics and information on urban customer purchasing and
shopping habits and future urban retail industry trends
Information regarding urban growth strategies, challenges associated
with urban expansion, and forces of competition
Statistics and information on population demographics, urban
consumer needs, and disposable income measures
Analysis of urban competitor strategies and urban retail trends
Mintel
Factiva
TableBase
RetailWire.com
Target.com
Information about company history, current services and product
offerings, and community involvement
Please see Works Cited for comprehensive list of secondary sources.
5. Company Analysis: Current Target SWOT
When Target’s current suburban store format is placed in an urban setting, its SWOT analysis
can be represented as follows:
Strengths
1. Brand equity
2. Design layout / store cleanliness
3. One-stop-shopping experience
4. Vendor relationships
5. Ability to meet demand
Opportunities
1.Target.com
2.Food offerings
3.First-mover effect
4.Connecting with the community
Weaknesses
1. Target.com
2. Signage
3. Meeting fashion trends
Threats
1. Difficulty adapting current suburban
store format to urban setting
2. Legal / political constraints in urban
areas
3. Integration into urban communities
4. Quickly changing trends
5. Competition
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5.1 Strengths and Opportunities
To successfully enter into urban markets, Target must leverage its existing strengths and
opportunities. Given Target’s strong brand recognition and reputation for offering quality goods
at affordable prices, Target’s brand equity can easily transfer into the urban market. Target’s
ability to meet consumer needs by offering a one-stop-shopping experience through a variety of
product mixes and services can be tailored for the urban consumer. Additionally, Target.com
serves as a strong resource that could be enhanced to connect the urban consumer’s in-store
shopping experience with on-line offerings, thereby increasing interaction between stores and the
website. The diversity and needs of urban communities also presents opportunities for Target to
engage in corporate social responsibility (CSR) initiatives and increase its interactions with local
customers.
5.2 Weaknesses and Threats:
Suburban Target stores are approximately 130,000 square feet in size. This could make
finding adequate buildings and tolerable real estate costs for this size of a store a challenge when
entering urban areas. In addition, Target’s struggling fashion lines may continue to under
perform in urban markets, as fickle urban consumers tend to follow quickly changing trends that
could be difficult for a mass-merchandiser to follow.
Target must also be wary of its
competition in urban markets. As suburban areas are becoming saturated with big box retailers,
many of Target’s competitors have begun to expand into urban areas.
Thus, Target may
experience growing local competition in addition to those stores in urban areas which already
actively serve consumers. Please see Appendix D for a more detailed SWOT analysis.
6. Customers
Target must take the differences in benefits sought between suburban and urban consumers
into account when tailoring its stores to the urban market.
Suburban consumer: The current average Target consumer is a 43-year-old female with an
average income of $58,000. Over 70% of today’s Target shoppers are women and more than
40% have children.
Urban consumer: Approximately 45.3 million individuals live in urban areas in the U.S. with
60% being between the ages of 12-34. The median income of individuals living in U.S. cities
tends to be lower than the overall U.S. median income due to the higher poverty levels, poorer
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residents, and higher rates of unemployment in urban areas. Despite the median income level,
the urban market has a combined purchasing power of $890 billion.
Urban consumers tend to shop more frequently than suburban shoppers for nearly all items
(particularly food and apparel) because retail stores are often conveniently mixed within housing
developments. On average, urban consumers spend approximately 25% more on apparel and
personal care products than non-urban consumers. Although they spend more, competitors like
Wal-Mart have unsuccessfully attempted to meet the urban consumers’ inconsistent fashion
tastes.
A large majority of people living in urban areas leave the city on average only once per
month or less, indicating that a significant portion of these individuals consistently shop in the
city. Additionally, urban consumers are as equally likely to be male as female and could be of
any nationality, as cities tend to be more ethnically diverse than suburban locations. For example,
over 80% of the Black, Asian, and Hispanic populations in the U.S. reside in urban areas.
Additionally, 26% of urban dwellers do not own cars and 56% of urban consumers always,
usually, or sometimes shop via foot or public transportation.
3 primary urban customer segments (According to Claritas, PrizmNE)
1. Urban Uptown: These consumers tend to be the diverse, educated, aristocrats of society.
They have a sophisticated style and often make purchases at high-end department stores
and boutiques.
2. Midtown Mix: These consumers have the broadest mix of ethnicities, are often singles or
couples who are childless, and pursue active social lives. They frequent bars, health
clubs, and restaurants in addition to having an interest in progressive music and the latest
consumer electronics products.
3. Urban Core: These consumers, who are predominantly African American and Hispanic,
tend to have lower incomes compared to the other two customer segments. This group’s
purchases are often driven by cultural and popular trends and products.
See Appendix E for complete description of customer segments.
7. Competitors
Target faces competition in urban markets from big-box retailers, supermarkets,
convenience stores, and department stores.
Big-Box Retailers
• Wal-Mart
• K-Mart
• T.J. Maxx
• Marshall’s
• Best Buy
Supermarkets
• Trader Joe’s
• Jewel
• Kroger
• Publix
• Fred Meyer’s
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Convenience Stores
• Walgreens
• Rite Aid
• CVS
• Mom & Pop Stores
Department Stores
• Sears
• J.C. Penney
• Kohl’s
• High-end Department Stores
Target’s number one competitor that poses the largest threat in the urban big-box retail
industry is Wal-Mart. However, Target currently outperforms Wal-Mart and other convenience
stores (specifically drug store chains) in securing prime real estate in urban areas. For example,
Target has 50 stores within the 10 largest U.S. cities by population, as compared to Kmart’s 45
and Wal-Mart’s 29 stores.
As competitors penetrate the urban market, many have had to develop urban specific
strategies for growth in these areas. For instance, many big box retailers are downsizing and
building vertically in cities using multi-level stores. Parking lots are typically located along-side
or underneath such stores and may be shared with competitors to reduce costs. As many cities
value architecture and urban design, competitors have also designed their stores to appropriately
match local surroundings.
Some competitors design their product and service mix in stores for a more diverse
customer base as well. For instance, local ethnic markets that cater to different palates are
growing in popularity in urban areas. In addition, K-Mart has begun to use Spanish circulars in
Spanish newspapers in areas with large Hispanic and Latino populations. Sears also now hires
English and Spanish speaking employees to assist Spanish-speaking customers. Additionally,
Sears has improved its customized urban clothing line in stores by 60%, similar to Wal-Mart
which has also established two urban clothing lines called “Metro 7” and “Exsto” to cater to the
urban consumer.
8. External Analysis
Target should consider political, economic, social, and technological issues when deciding
which urban markets to enter.
•
•
Politically, many cities have strict ordinances for businesses and protected plans for
growth. Initiatives relating to the environment, pollution, energy, natural resources, and
clean water are common, and Target would be expected to comply with such regulations.
Economically, minimum wage, real estate costs, consumer demographics, and
competitive landscapes affect the cost and effectiveness of opening new stores.
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•
Socially, exceedingly diverse populations, unique city cultures, and corporate social
responsibility initiatives could present new challenges.
• Technologically, the proximity of stores to distribution centers and city transportation
systems could become of increasing importance for moving products and consumers in
and out of stores.
Please see Appendix F for data on the 30 largest U.S. cities.
9. General Recommendations: Customer and Merchandising Strategies
*Note: A customer service/returns desk should exist in all urban Target stores. Other services
that currently exist in some suburban stores such as pharmacies, medical clinics, and optical
centers should be offered in accordance with local demand and customer demographics.
9.1 Target Customer Base
Given the three primary urban customer segments discussed above, Target’s core strategy
for entering the urban market should be to target the Midtown Mix. The company should
dedicate up to four years to establishing a dominant market presence within this consumer
segment. Target stores should cater to this group because its current services aimed at providing
convenient shopping and quality goods at low prices best match the needs of this customer group.
On Average, city populations tend to be younger as a whole. The top 15 largest cities in the
U.S. have a younger median age than the U.S. overall. Target should focus its urban strategy on
those in the Midtown Mix – a segment that encompasses a younger adult audience. This
customer group is mostly interested in the social, cultural, and career opportunities available in
cities. These consumers tend to be large spenders on entertainment, electronics, apparel, and onthe-go convenient food items. Target can easily meet the existing high demand among this
segment for various items in its product mix, and others by slightly modifying its current
offerings.
Once Target has secured a strong presence among the Midtown Mix customers, the
company should aim to meet the needs of the Urban Uptown and Urban Core customers
respectively, within the following 4-10 years. By carefully modifying the successful products
and services offered to the Midtown Mix customers, Target can better meet the needs of these
customer segments and further penetrate the urban market.
9.2. Merchandising Strategy
The following reductions and enhancements in product mix and service offerings are
required within all urban stores to meet the needs of the three customer segments.
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9.2a Store Reduction Recommendations
One of the most significant challenges Target must face in the urban setting is space
constraints. Since Target customers highly value the large variety of products available at Target
stores, it would not be beneficial to reduce the assortment of products offered to meet these space
requirements. Instead, Target should reduce inventory held in stores and replenish it nightly
using items stored in newly constructed Urban Inventory Warehouses (UIWs). Urban Inventory
Warehouses would be positioned within a shorter mile radius to multiple urban stores than
current Distribution Centers, allowing for quick product replenishment. UIW stock would be
replenished by standard Target Distribution Centers.
Additionally, Target should consider reducing its apparel lines. These items take up
considerable space in stores and are unlikely to perform well enough to justify their cost.
Additionally, as identified in the SWOT analysis, Target’s fashion departments have been under
performing in suburban stores and will likely face increased difficulties in urban markets. The
urban customer tends to follow the latest fashion trends, resulting in high demand variability and
the need for fast inventory turnover of these constantly changing products. As a result, Target
should reduce fashion items, but keep basic clothing items such as socks, t-shirts, belts, and
undergarments where sales are not as susceptible to changing fashion trends.
Household furniture, home decor, patio furniture, and outdoor items such as grills, tents,
and lawn accessories should be displayed and stored in stores in limited quantities. Where
possible, small sample chips should replace item displays to show customers what the finish on a
piece of furniture or a seat cushion material would look like. This reduction will have two key
benefits. First, the freed up shelf space could be used for higher turnover and higher margin
products as well as reduce clutter in stores. Second, urban consumers who tend to purchase
items over the Internet more frequently than suburban consumers could be encouraged to
purchase these large and/or heavy items on-line at Target.com. The items would then be shipped
to them, eliminating the difficulty of transporting these large items from urban stores.
See Appendix G for example reduction of aisle space, using Ann Arbor Target as proxy
9.2b Store Enhancement Recommendations
FAST!
Urban customers are consistently on the go and favor a one-stop shopping experience. As
a result, Target should provide urban consumers with a variety of products that can be purchased
on a quick shopping excursion such as food and health and beauty items. To expand its food
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selection, Target should offer deli/meat options and fresh produce. Deli/meat selections often
account for nearly 10% of grocery store revenues, making this an area in which Target could
capitalize heavily. Within the deli, emphasizing the sale of high margin, fresh, pre-packaged
food items could induce impulse or convenient meal purchases from customers. Including these
items in stores would also encourage urban consumers who prefer fresh food to fast food items to
frequent Target stores more often for quick meals on the go.
Other general food offerings should encompass a variety of ethnic selections. These
selections should be catered primarily to local cultures, but also offer foods of other ethnicities.
Consumers in urban markets tend to come from a variety of ethnic backgrounds that favor
ethnically diverse foods. As ethnic markets and grocery store offerings have grown in popularity
among minorities and Caucasians in the U.S., this is an especially large market opportunity that
Target should not neglect to serve, especially in urban areas. These offerings will encourage
more consumers to frequent the store for desirable ethnic cuisines.
Finally, to complete the food offerings available at Target, stores should continue to offer
selected popular items from the store brands of Archer Farms, Market Pantry, and Sutton &
Dodge in urban settings. Despite the fact that urban consumers tend to prefer brand name
products to store brands, some cost conscious customers are still likely to purchase these items.
Their presence and selection in stores should be determined by their rate of high-margin returns.
To further expedite and enhance the urban shopper’s experience, Target should introduce
“Shopping Kiosks” strategically positioned throughout stores. Kiosks should provide the ability
to print shopping lists that guests can create through customer accounts on Target.com. The list
would include aisle references for the selected items, weekly coupons and sales for
complementary items, and the option to print recipes that cater specifically to any listed grocery
items. These Kiosks would also function as a gift registry, gift finder, recipe search, wish list
creator, instant digital photo printer (replacing photo labs in stores), and display weekly
advertisements/specials. (See mock-up photo of Target Kiosk in appendix H)
To further expand its one-stop shopping experience, Target should rent store space to banks
with the highest local membership rates. Target should also continue to promote its credit card
service in urban settings. This service would not only offer a convenient and discounted method
of payment for customers, but would also allow Target to track customer purchases in urban
settings in order to better manage inventory levels in urban inventory warehouses, as mentioned
previously.
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FUN!
To further enhance the “fun” store experience for Target customers, Target should add a
concierge desk. Employees at this counter should offer services such as TicketMaster and
Fandango movie ticket sales, providing customers with the convenience of planning their
weekend ventures to concerts, movies, and Broadway shows while shopping. Employees at the
concierge desk should also be knowledgeable about the city surroundings, and be able to answer
questions about local events. The desk should also be equipped with the ability to turn on a taxi
light outside the store to hail cabs for customers in need of transportation. A doorman would be
available at the entrance/exit of the store to assist customers in loading their purchases into cabs.
With the exceptional and extended services offered by Target, customers will come to favor it
over its competitors.
To connect with the local community, Target should invite solo local musicians to
showcase songs in the music department, authors to sign books in the book department, and
artists to display their work in the arts and crafts section. These areas should be located away
from main aisles to maintain Target’s clean and organized shopping environment. By allowing
these individuals to display their talents in stores, Target would demonstrate its support of the
local community and encourage positive interaction between its stores and locals residents.
Friendly!
In metropolitan areas, urban consumers often walk or take public transportation. Therefore,
Target should offer inexpensive large nylon or cloth bags to assist customers in carrying their
purchases easily home from stores. By placing the Target bulls-eye on the bags, they would also
serve as free advertisement for Target as people carry them around the city. This strategy would
be embraced in environmentally conscious cities such as San Francisco and Seattle where plastic
bags like those that Target traditionally uses are now required to be made of compost materials.
Reducing the use of plastic bags would display Target’s support for environmentally conscious
urban communities.
Target should also distribute Spanish circular advertisements and increase Spanish/English
signage in stores with high or growing Hispanic and Latino communities, as well as hire more
bilingual employees in urban areas.
Ethnically diverse individuals tend to increase their
patronage to stores that make a special effort to welcome them. Since a large portion of the
population in urban areas tends to be ethnically diverse, these efforts should be made.
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10. Specific Recommendations: Phasing in Each Customer Segment
The following three phases offer additional recommendations intended to meet the needs of
the Midtown Mix, Urban Uptown, and Urban Core customers. The timetable also indicates when
each phase should be completed. Each phase suggests additional reductions and enhancements
that should be made to the standard urban Target format in order to cater to each customer
segment individually. Target should aim to serve the Midtown Mix during phase one. Near the
end of phase one, Target should enter phase two by opening stores to serve the Urban Uptown
community (provided that a re-evaluation of this market segment at the time of expansion
indicates this is a favorable opportunity). Following the completion of these two stages, Target
should enter into phase three by opening stores to serve the Urban Core community (provided
that a re-evaluation of this market segment at the time of expansion indicates this is a favorable
opportunity). If appropriate, phases two and three may be implemented in reverse order or in
parallel with one another.
10.1 Phase 1 (Years 0-4):
Phase one will focus on meeting the needs of the Midtown Mix. These consumers tend to
be childless, pursue active social lives, and are known for desiring the newest items on the
market in fashion and electronics.
Store Reduction Recommendations: Target should reduce the children’s clothing and toy
product lines because of the small number of children among these consumers. In addition, fast
food dining areas should be eliminated, as these individuals tend to be more health conscious and
prefer healthier food options.
Store Enhancement Recommendations: Food selections should include organic products that
are popular with this demographic. Additionally, younger urban consumers tend to frequent
grocery stores for the variety of food products offered, so breadth versus depth of product mix
should be incorporated into food mix considerations. Dry cleaning and tailoring services should
also be introduced as this customer segment includes individuals who often wear professional
attire that requires consistent maintenance. These services will add additional value to the
customer’s Target shopping experience and will increase the number of trips made to the store.
10.2 Phase 2 (Years 4-7):
Phase two will focus on meeting the needs of the Urban Uptown. These consumers tend to
frequent the arts, shop at exclusive retailers, travel, and spend heavily on computer and wireless
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technology. These individuals are more likely to have larger families and require numerous basic
household items.
Store Reduction Recommendations: Fashion apparel items should be minimized as these
customers often shop at high-end department stores and boutiques for clothing. These customers
also prefer healthier food options, therefore fast food services such as Pizza Hut should be
eliminated.
Store Enhancement Recommendations: Because this audience is comprised of individuals
with diverse family sizes, Target should maintain baby/toddler product lines similar to its
suburban stores. In addition, larger packages of items such as 12-roll toilet paper bundles instead
of only 4-roll should be offered in these stores to appeal to those consumers who tend to
purchase items for a larger number of people in their households. Given the space constraints for
holding inventory in urban stores, Target should maintain product selections and utilize the
UIWs for restocking these larger pre-packaged items frequently, thus minimizing the amount of
inventory held in stores. Also, maintaining luggage and travel products would appeal to this
customer segment’s frequent travel needs. These customers would also benefit from dry cleaning
services because of their clothing preferences often require additional cleaning care.
The
concierge desk should offer tickets to more upscale performances such as Broadway shows and
premium seats at events. Because more Urban Uptown consumers drive cars, these Target stores
should also offer more automotive products and parking spaces, and a parking structure is of
more necessity at these urban Target stores.
10.3 Phase 3 (Years 7-10):
Phase three involves Target’s move into inner city areas with a focus on meeting the needs
of the Urban Core segment. These individuals are often of a lower socioeconomic status, yet still
shop frequently. These consumers are predominantly African American and Hispanic and
encompass a broader age range compared to the other two customer segments. The inner city
comprises approximately 5% of the U.S. retail market and represents a $120 billion market for
retailers. This market is largely underserved, which presents an opportunity for Target to capture
a large portion of the inner city market share with its high quality, lower priced goods. Please see
Appendix I for additional information.
Store Reduction Recommendations: Given that these individuals are less likely to travel and
own vehicles, Target should reduce its luggage, travel, and automotive products.
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Store Enhancement Recommendations: To cater to the families in this segment who often
have young children, all baby/toddler/maternity product lines should be offered. An urban
fashion line would also be most successful in this customer segment, as these customers have a
high propensity to shop for apparel items on a budget. Target should leverage its existing
investment in apparel products and designers to support this strategic move. Given that this
segment consumes a large amount of fast food, Target should allocate store space to fast food
vendors such as Pizza Hut. This will enhance this customer’s one-stop shopping experience and
attract customers to stores who may be looking for quick meals and other impulse purchases.
Please see Appendix J for chart format of information.
11. Location Recommendations
The top ten urban areas in which Target should enter, in no particular order are:
1.) New York City, New York
2.) San Francisco, California
3.) Boston, Massachusetts
4.) Seattle, Washington
5.) Washington, D.C.
6.) Los Angeles, California
7.) Austin, Texas
8.) Denver, Colorado
9.) San Diego, California
10.) Columbus, Ohio
In order to target the Midtown Mix segment for Target’s urban expansion initiative, several
variables that could reasonably characterize this customer segment were used to determine the 10
best cities out of the 30 largest in the U.S. A regression run with the following variables
produced the desired results: variables for population density per square mile, the number of
non-family households with income of $35,000-$150,000, as a percent of total households, the
population between 20-45 years of age, the population of 20-45 year olds as a percent of the total
population, and the growth rate of each of the top 30 largest cities by population in the United
States. Please see Appendix K for complete comparison amongst the ten cities.
When deciding which of these urban markets to enter into first, Target should take the
following external political, economic, social, and technological measures into consideration.
•
•
Politically, some of these cities were found to demonstrate animosity toward big-box
retailers, which could be detrimental to Target’s expansion initiative. Others had growth
strategies and initiatives relating to the environment, pollution, energy, natural resources,
clean water, and city building ordinances that could pose entry problems because of
compliance requirements.
Economically, labor costs could be a concern, with minimum wage ranging in these cities
from $5.15-$8.50 per hour. The median income was $37,907-$57,496, with seven out of
the ten cities being listed among the top 18 cities in the U.S. with the highest disposable
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•
•
income in 2000. Those cities that demonstrate the highest buying power might be
considered over others. Also, cities that are currently labeled on the real estate market, as
“BUY” s might be more favorable than those that are listed “SELL.”
Socially, the ethnic diversity of the population and the cities’ cultural systems should be
considered. Those requiring the least changes to Target’s current product mix to cater to
the demographics of consumers are likely more favorable because of ease of entry.
Technologically, those cities that are closer to distribution centers (which could more
readily replenish UIWs) would minimize logistical concerns. Those urban areas that
provide more extensive public transportation options may also make shopping in stores
more convenient for urban customers.
Once Target has determined which urban areas to enter, it should consider the specific needs
of consumers in those areas. 74% of consumers in urban areas own cars and often use them to
commute when shopping. It is therefore important that Target ensure there is adequate parking
at or nearby store locations. This need may require Target to construct parking ramps on the
sides of store buildings and offer multi-level entrances at these stores. Parking could also be
located beneath urban stores, and Target would need to design elevators to transfer customers
and their goods to and from store entrances. In order to reduce the cost of building such parking
structures, Target might also consider sharing these areas with competitors. Despite the close
proximity of other stores, sales have been shown to remain constant when this tactic is employed,
while costs are clearly reduced.
Target stores should also compliment the appearance of local buildings and be near street
corners with sidewalks on as many sides of the store walls as possible. This will provide high
visibility and the highest level of convenience for consumers. Public transportation should be
readily available near the stores as well. In order to achieve these location circumstances, Target
should heavily consider locating in financial districts and near densely populated residential
areas. Real estate constraints in urban areas combined with the tendency for urban consumers to
shop more frequently also means that Target should place numerous smaller urban stores within
close proximity to each other, as an alternative to a single large urban store in one city.
12. Company Analysis: Post-Urban Expansion SWOT
Strengths
1. Forecasting of local demand
2. Appeal to diverse customers
3. Brand Awareness
4. Usage of Target.com
Opportunities
1. Re-evaluate primary Target consumer
2. Engage
in
corporate
social
responsibility (CSR)
3. Continue to connect with community
4. Further develop Target.com
13
Weaknesses
1. Maintaining customer loyalty
2. Space constraints
Threats
1. Increased competition
2. Organizational change
3. Increased real estate costs
12.1 Strengths and Opportunities:
Upon entering the urban market, Target will have increased its brand awareness by locating
its stores in high foot traffic areas in metropolitan cities.
Successfully serving the urban
consumer will have resulted in improved local demand forecasting in these areas. Space
constraints will have forced Target to find an ideal merchandising strategy offering the correct
products for different urban customer segments. Target also would have mastered the ability to
control on-site inventory through the construction of UIWs. Target must continue to assess and
re-evaluate its target customer segments to best serve their needs. This will involve continually
tailoring the in-store product mix to the certain demographic of target consumers. After entering
urban areas, Target should consider continually engaging in CSR initiatives to give back to the
local community and build patronage among local consumers. If Target becomes an active
leader in the community, consumers will take notice and respect its dedication to their
neighborhoods. Since Target would have integrated Target.com into stores, Target should also
continue leveraging its on-line resources for the urban shopper.
12.2 Weaknesses and Threats:
With its urban expansion strategy, Target must be aware of its competition as well as costs
of real estate.
Given space limitations in cities, Target should continually re-evaluate the
popularity and profitability of its product lines in order to carry the most profitable products, as
well as provide its customers with the most desired products. Additionally, Target should apply
what it learned from the organizational change challenges it faced during early urban expansion
to future expansion programs and company wide initiatives, helping to streamline the process of
“change management” required when entering urban areas. Please see Appendix L for complete
descriptions.
13. Organizational Change
Given these recommendations, there are several internal changes Target must make to
better manage its urban growth strategy.
14
13.1 Structure- Logistics/Operations
• Deliveries: Given the infrastructure and tighter roadways in cities, Target’s logistics team
must consider the feasibility of large trucks making deliveries to urban locations.
Additionally, the physical store must meet the requirements for a loading dock area,
which could be difficult to attain if the store is located in a multi-story building.
• Locations: Since store layouts must be tailored to the physical specifications of each
location, Target must consider which aspects of its business (products, services, etc.) it
can sacrifice or scale back on in order to provide customers with the same variety of
selections as in suburban locations, while still within a smaller space. Whether Target
builds, buys, or leases space, it must maintain a level of flexibility to fit within specific
locations’ space constraints.
13.2 People- Human Resources
• Employees: With the high level of diversity that exists in cities, it is important for
employees to be bi-lingual in English and the languages that are most commonly spoken
in each area.
• Managers: Store managers must be trained to consider factors such as increased security
and the implementation of more on-floor employees to reduce theft when operating stores
in urban locations. When making hiring decisions, managers must be dedicated to
Target’s policy of maintaining diversity within the workplace and must also learn to
manage a diverse staff.
• Culture: Similar to any growth initiative, management must maintain Target’s
merchandising philosophy and culture in every aspect of its business.
14. Promotional Campaign
To ensure a successful expansion into the urban market, Target should adopt a promotional
strategy focused on giving back to the community in an inventive way that will create buzz
among consumers. To do this, Target should enhance its standard advertising strategies in urban
areas to include advertising that will allow it to form a more intimate relationship with customers.
•
•
•
Walking Spot: Target should partner with urban area Humane Societies and have Target
employees walk dogs around the cities. The walkers should wear a standard uniform with
the Target bulls-eye logo and the dogs should wear bandanas with Target bulls-eyes on
them. This will call the attention of pedestrians. Furthermore, this strategy complements
Target’s use of the bulls-eye dog, Spot.
Bulls-eye Park: Target employees should distribute bulls-eye towels, beach balls, and
frisbees at public parks. The benefits of this promotion are exponential: photos of friends
sunbathing on their bulls-eye towels posted to photo-sharing websites, children playing
with the beach balls with friends, and barbeques with frisbee games. This is a fun and
non-invasive form of advertisement.
Corner Cirque: To expand Target’s focus on meeting the needs of a diverse customer
base, Target should pursue a joint venture promotional campaign with Cirque du Soleil, a
traveling troop of contortionists with an indisputable awe-inspiring reputation.
Performers could contort themselves into a bulls-eye pattern or twist themselves into
pretzels while shooting suction cup arrows at a large red Target bulls-eye sign. By
15
positioning several performers at street corners with high foot traffic during morning,
lunch, and evening commute hours, even the most hurried employees will stop and take
notice. This will cater to the artistic interests of the Urban Uptown, the entertainment
interests of the Midtown Mix and Urban Core, and create a universal sense of curiosity.
Please see Appendix M for a sample visual of promotional campaign.
Other possible ideas include sponsoring a fireworks display (to including exploding Target
bulls-eye fireworks) the first Saturday of every summer month, offering free bulls-eye key
chains/carabineers with every purchase over $50, and distributing bulls-eye coasters to local bars
and night clubs for casual use. All of these ideas would cater to Target’s customers’ active urban
lives.
15. Conclusion
Although Target will face challenges accommodating the needs of urban consumers and
securing prime real estate locations, the data and recommendations presented in this report
demonstrate that the fast, fun, and friendly one-stop Target shopping experience can be
successfully developed for this market. There are three primary customer segments in urban
settings: the Urban Uptown, Midtown Mix, and Urban Core. Primary recommendations targeted
the Midtown Mix, and the top ten recommended cities correlated especially well with this
segment’s demographics. Target should move to these locations and target these consumers
because the benefits sought by this customer segment matched best with Target’s merchandising
strategy.
General recommendations for an urban Target store format were given based on
enhancements and reductions that should be made to the current suburban store format. A
specific implementation phasing strategy followed that included enhancements and reductions
that should then be made to cater the generic urban store format to meet the specific needs of the
diversity of urban consumers. Additional location and organizational change concerns were
considered and an urban promotional campaign was outlined. With the strong brand equity and
competitive strength that Target possesses, following these recommendations will lead Target to
continued growth and success in the urban market.
16
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20
Appendix A: Issue Trees
Figure 1: Draft 1 Issue Tree
Increase Market Share of Urban Market
Consumer
Value
Lifestyle
Store Format
Shopping Experience
Community
Product Mix
Product LIne
Price
Promotional Campaign
Brand
Trendier
Presentation
Urban Market Strategies
Competition
Brand image
Advertising
Consumer Spending
Benefits Sought
Income
One stop shopping?
Location
Seasonal
Quality
On-the-go
Additional services?
Real estate costs
Regional
Brand
Where do customers
shop?
Food? In-store cafes?
People
Variety
Where do customers live?
Browse vs. purchasing
specific items?
CSR
Convenience
Sensitivity? (price,
brands, location)
Ease of purchasing
Proximity to public
transportation
On-line
Multi-story
Other public venues
Price
Predatory
Trends
Economy
Wal-Mart
Media
Licensed Brands
K-mart
Journals
Services
Private label brands
local convenient stores
Magazines
Bulk items vs. smaller
units
Contracts with designers
Billboards
Customer Service
21
Figure 2: Draft 2 Issue Tree
Issue Tree: Strategic Movement Into the Urban Market
3 C's
Consumer
Value
Competition
Company
Store
Format
Product Mix
Demograp
Urban Urban Strength Opportu
Desired
hic
Descriptive Shopping Success Failure s/Weakn nities/Th Commu Product Bran
reats
nity
lines
ds
esses
s
es
Experience
s
One Stop
Shopping?
PEST
Price, Product, Place, Promo
Price
Promotional Campaign
Prese
Our Compet
ntatio Competi Adver Politic Soci Techno Enviro
ition
Pric
n
tion
tising
al
al
logical nment
Price Trends
e
Seasonal Trendi
Location? ?
er?
Urban
market Brand
strategi Image
es?
?
Wal-Mart Media?
Benefits
Sought?
Income?
Quality?
Add.
On the Go? Services?
Brand?
When do
Customers
Shop?
Food? Instore cafes?
Variety?
Where do
Customes
live?
Browse vs.
purchasing
specific
items?
e label
Services brands
?
People? ?
Contra
Bulk
cts
CSR?
items vs. with
Alliances smaller design
?
units?
ers?
Ease of
purchasing?
proximity
to public
trans?
On-line?
Mulitstory?
Other
public
venues
?
Sensitivity?
(price,
Convenie brands,
nce?
location)
Price?
Real
Estate
costs?
Industry Analysis
ed
Regional brands
?
?
K-Mart
journals?
local
convenie
nt stores magazine?
Bill-Boards?
Customer
Service?
Cost/Benefit Analysis of Recommendations
22
Figure 3: Final Issue Tree
Issue Tree: Strategic Movement into the Urban Market
3 C's
Consumer
Value
Customer
Service
Quality
Brand
Variety
Convenience
Price
Demographic
Descriptives
Income
Age
Ethnicity
Household size
Product, Place, Promo
Competition
Desired
Shopping
Experience
One Stop
Shopping
Experience
Add. Services
Food
Urban Successes
Urban Failures
Lack of food
Urban fashion line offerings
Locating next to
other big box
retailers to attain
synergies
Company
Store
Format
Strengths/Weakness Opportunities/Thr Communi
es
eats
ty
Strenghts: Brand
Equity, One-stop
shopping, Design
layout, Store layout,
Vendor relationships,
Ability to meet
demand
Opportunities:
Target.com, Food,
First-mover effect,
Connecting with
Locationthe community
city
Threats: Difficult to
adapt current
suburban store
format to urban
setting ,
Legal/political
constraints,
Weaknesses:
Integration into
Inability to secure Target.com, Signage, urban markets
Real
prime real estate Meeting fashion
quickly Changing estate
locations
trends
trends, Comeptition costs
Inability to meet
city standards
Product Mix
Product
lines
Brands
Tailor
product mix
to specific
target
segment
Private
label
brands
Local
Sensibilities
fashion
lines
dependan
t upon
urban
location
Promotional Campaign
Trends
Urban
market
strategies
Presentatio
Advertisin
n
Competition
g
Maintain
brand image Wal-Mart
Partner
with local
non-profit
Other big box organizatio
retailers
ns
Additional
Mulit-story services
Local
convenient
stores
Proximity
to public
trans
Department
stores
Proximity
to
distribution
centers
Food
Media
Super
markets
Drug stores
23
Appendix B: Customer Interview Questions
1. Why do you shop at Target?
2. What do you like about Target?
3. What are your most frequent Target purchases?
4. Do you shop at Wal-Mart? If not, why not? If so, how does Target compare?
5. Have you started using any new brands after finding them at Target?
6. Do you buy groceries at Target? Do you still shop at supermarkets or is Target a one-stop
shopping experience for you?
7. Have you had any unsatisfactory shopping experiences at Target?
Do you have any
recommendations for change?
8. Do you come to Target just to browse or do you always have a shopping list?
9. What are some new products you would like to see at Target?
10. Have you used Target.com? How was that experience?
11. Would you take advantage of delivery services if they were offered?
12. Do you ever stop at the Starbucks café or Pizza Hut dining area? If they were removed,
would you consider not shopping at Target?
Sample Responses
“I go to Target instead of Wal-Mart because there’s less clutter and I can get everything I need.
I buy my groceries and all my necessities at Target.”—Tom, ~age 45, male
“I used to buy all my clothes at Target, but then they changed everything. They really messed
up the clothes.”—Joan, ~age 65, female
“I mostly buy office supplies from Target. Today I’m looking for a new chair. One time I
tried to use the bridal registry, and the information was unavailable. If Target were to offer
delivery services, I would use it.”—Sally, ~age 35, female
“I haven’t started using any new brands from shopping at Target. I pretty much buy the same
thing all the time.”—Sara, ~age 25, female
“I like to come here with my mom just to look around at everything. I have a lot of brothers
and sisters so we pretty much always end up buying something for them. Sometimes we buy
the cheap stuff at the front of the store even though we don’t need it.”—Jenny, ~age 13,
female
24
Appendix C: Photos from Target Visit
Figure 1: Photo of frozen food aisle
Limited aisles dedicated to food items, ie. Dry goods, and some frozen items.
Figure 2: Photo of outdoor items
Large amount of floor space dedicated to patio and garden furniture, outdoor décor, and grills.
25
Figure 3: Photo of Back Store Room
Storage room in back of store to hold inventory
26
Figure 4: Photo for Guest Service Phone
Phones located around the store to assist with customer questions
Figure 5: Photo of Store Map/Layout
Store maps around store to indicate current location
Figure 6: Photo of Basket
27
Customers shop with carts and baskets
Figure 7: Photo of Signs
Large, overhead signage (upper left corner of photo) located throughout store indicated
department/section.
28
Appendix D: Current Target SWOT Analysis
Strengths
1. Brand equity: The Target brand name is widely recognized and publicized. In addition
to the Target name, the company’s prominent symbol, the red bulls-eye, is recognizable
on its own and is often used in advertising campaigns. Target’s brand equity has enabled
the company to develop the reputation of offering customers quality goods at discounted
prices. Target’s strong brand equity should be easily transferable to urban areas.
2. One-stop-shopping: Target has honed the ability to appeal to the needs of its customers
by offering a one-stop-shopping experience complete with grocery, pharmacy, apparel, 1
hour photo, Starbucks, Pizza Hut and other convenient features. The strategy of meeting
multiple needs in one location appeals to busy customers on the go who want to eat, shop
and pick up photo and pharmacy items all in one trip. The convenience factor of
providing a one-stop shopping experience has enabled Target to lure customers into the
store for multiple needs. This strategy could be strongly applied to the urban consumer
who is often on the go and in need of a one-stop-shopping experience.
3. Design Layout / Store cleanliness: Target has been recognized as offering a positive
shopping experience to its shoppers by providing spacious aisles in the stores and wide
check out lines. The stores tall ceilings and clean surroundings seem to attract people
into the store and keep people shopping at Target for future needs. The meticulous store
design and layout is uncompromising in offering customers a stress-free shopping
experience. This strength will be helpful when designing the urban Targets.
4. Vendor Relationships: Target has succeeded in securing strong relationships with its
suppliers and vendors. As a discount department store, Target has the luxury of
achieving economies of scale in that it can save money by ordering products in bulk.
With a streamlined distribution process, Target has experienced strong vendor
relationships to ensure timely deliveries and in-stock stores.
5. Ability to meet demand: Target has learned how to meet customer demand in inventory.
Target strives to keep the customer satisfied by having products in the store and available
for sale. Target has managed to achieve this goal by monitoring the inventory levels in
each store to find the best balance between over-stocking and under-stocking certain
locations. Target has cultivated the ability to meet consumer demand by having products
available in stores for consumers.
Weaknesses
1. Target.com: Presently, Target has yet to utilize Target.com to its full potential. While
the on-line tool exists to assist customers in ordering products on line, Target needs to
increase online awareness and usage of the on-line resources and services. Additionally,
not all Target products are offered on Target.com. Entering urban areas will hopefully
allow for more on-line exposure for Target.
2. Signage: Currently, Target offers large overhanging signs to signify the different
departments from apparel to electronics. Based on field research and interviews, it has
come to our attention that more signs would be helpful in identifying a more detailed
product offering. For example, rather than just stating “sporting goods” for women’s
apparel, it would be helpful to have multiple signs for the different product lines within
that category. Additionally, having signs on the sides of aisles or one large store map
29
upon entering the store would also assist the customer in finding his/her way through the
large Target stores.
3. Meeting fashion trends: While Target has worked hard over the past couple of years to
product quality and fashionable clothing for women and men, it has struggled in
overcoming its previous image of offering non-favorable apparel items. While Target
has succeed in partnering with designers to offer a trendier selection of clothing, the
company has struggled to keep up with the ever-changing fashion trends and appeal to a
certain consumer demographic with these trendier items.
Opportunities
1. Target.com: Target’s on-line store has strong growth potential that could potentially be
better tapped in an urban market. Target should utilize its existing resources and to take
advantage of the on-line potential.
2. Food offerings: While Target currently offers food at its many locations, having its own
line of foods or food distribution system would give Target more control over its
operations management. A Target food distribution service would give Target greater
flexibility over its logistic system and the ability to make decisions without going through
a third party.
3. First-mover effect: Given that Target and other discount department stores have
saturated the suburban market, Target has the opportunity to be one of the first discount
department stores to enter the urban market. Currently, the urban area offers an array of
opportunities and challenges given the large number of people in a concentrated area.
Thus, if Target leverages its resources and capabilities in a timely fashion, Target could
become one of the first big box retailers to enter the urban market and hopefully gain a
supportive customer base before competitors such as Wal-Mart and the Dollar Store also
enter the urban market.
4. Connecting with the community: Upon entering the urban market, Target has the
opportunity to connect with the community. Urban expansion can offer Target the ability
to become socially responsible and integrated within the local communities.
Threats
1. Difficulty adapting current suburban store format to urban setting: Given that
Target has created a spacious store design to appeal to its suburban customers it has been
difficult to adapt the store format to urban locations. Suburban Targets have spacious
aisles wide enough to fit more than two carts side by side, multiple checkout counters,
various items on display, a large stock room and high ceilings. For the urban setting, this
store design has proven difficult to replicate without decreasing the square footage and/or
cutting down certain product lines.
2. Legal / political constraints in urban areas: In the urban market, Target will face
challenges of increased labor and real estate costs as well as restrictions in terms of where
Target could be located as to not disrupt historical or cultural buildings within the city.
3. Integration into urban communities: If Target enters the urban market, the local
community may not accept its presence in the midst of historical and cultural buildings.
Target’s urban presence may disrupt the local community and not be welcomed or
accepted.
30
4. Quickly changing trends: Within a highly populated urban community, fashion trends
change rapidly, making it difficult for Target to remain up to date on the latest fashions.
Also, individuals living in cities may have a greater need for updated fashion trends in
relation to suburban individuals.
5. Competition: Target is not the only discount retailer seeking entrance into the urban
market. Thus, Target may be competing with Wal-Mart, Best Buy, Linens ‘N Things and
Home Depot for prime real estate. Additionally, Target products would be in
competition with these stores, department stores, convenience stores, and drug stores
commonly located in urban settings.
Appendix E: Prizm Marketing Segments, Claritas Customer Segmentation of Urban Markets
Group
Description
Urban Uptown
Urban Uptown-ers are home to the nation’s wealthiest urban consumers.
Members of this social group tend to be affluent to middle class, college
educated and ethnically diverse, with above-average concentrations of Asian
and Hispanic Americans. Although this group is diverse in terms of housing
styles and family sizes, residents share an upscale urban perspective that’s
reflected in their marketplace choices. Urban Uptown consumers tend to
frequent the arts, shop at exclusive retailers, drive luxury imports, travel
abroad and spend heavily on computer and wireless technology.
Diversity is the hallmark of Midtown Mix, a group of midscale urban
segments. It’s the most ethnically diverse social group, besides containing a
mix of singles and couples, homeowners and renters, college alumnae and
high school graduates. In Midtown Mix, the households are dominated by
childless consumers who pursue active social lives-frequenting bars, health
clubs and restaurants at high rates- listen to progressive music, drive small
imports and acquire the latest consumer electronics.
Urban Cores segments are characterized by relatively modest incomes,
educations and rental apartments, but affordable housing is part of the allure
for the group’s young singles and aging retirees. One of the least affluent
social groups, Urban Cores has a high concentration of Hispanics and
African-Americans, and surveys indicate a fondness for both ethnic and
mainstream media products. Among the group’s preferences: TV news and
daytime programming, Spanish and black radio, telephony and services and
pagers, cheap fast food and high-end department stores.
Midtown Mix
Urban Cores
31
Appendix F: Rankings of Attractiveness of 30 Largest U.S. Cities
Measurement Statistic
Population Density per square mile
Non-family households w/ income
$35,000-$150,000
New York,
New York
San
Francisco,
California
Boston,
Massachusetts
Seattle,
Washington
Washington,
D.C.
Los
Angeles,
California
Austin,
Texas
Denver,
Colorado
San Diego,
California
Columbus,
Ohio
8158.7
1704.7
1685.1
545.9
756.3
2344.2
295.9
560.9
670
490.3
520,408
91,157
57,520
70,607
73,477
231,596
65,340
56,706
106,352
59,387
As a percent of total households
Population between 20-45 years of
age
17.20%
28.27%
24.68%
27.01%
29.60%
18.04%
22.56%
23.47%
22.79%
19.71%
3,040,661
313,030
242,752
245,489
210,045
1,470,992
313,839
224,029
491,227
300,435
Target as percent of population
38.22%
43.53%
46.62%
45.72%
40.78%
39.42%
46.26%
41.09%
40.65%
43.29%
Growth rate
1.685%
-4.803%
-5.110%
1.870%
-3.765%
4.060%
-4.881%
0.592%
2.627%
2.697%
Rank (1=best)
1
2
3
4
5
6
7
8
9
10
Measurement Statistic
Charlotte,
North
Carolina
Chicago,
Illinois
Dallas, Texas
Portland,
Oregon
Phoenix,
Arizona
San Jose,
California
Houston,
Texas
Fort Worth,
Texas
Milwaukee,
Wisconsin
Nashville,
Tennessee
Population Density per square mile
Non-family households w/ income
$35,000-$150,000
444
1634.2
568.9
381.5
223.1
1303.6
705.7
583.5
1028
302.3
46,898
186,119
84,592
46,872
92,828
48,952
122,219
28,981
39,630
41,505
As a percent of total households
Population between 20-45 years of
age
18.80%
18.24%
19.06%
20.54%
18.43%
16.98%
16.67%
13.23%
17.32%
17.77%
242,128
1,065,904
477,900
204,595
547,976
342,797
761,361
239,687
207,215
202,920
Target as percent of population
40.25%
39.45%
41.74%
39.83%
39.77%
38.63%
39.22%
39.65%
37.21%
38.82%
Growth rate
12.965%
-1.847%
2.124%
0.814%
10.638%
1.943%
3.222%
16.715%
-3.030%
0.657%
Rank (1=best)
11
12
13
14
15
16
17
18
19
20
Measurement Statistic
Las Vegas,
Nevada
Baltimore,
Maryland
Indianapolis,
Indiana
Jacksonville,
Florida
Philadelphia,
Pennsylvania
Memphis,
Tennessee
Louisville,
Kentucky
Detroit,
Michigan
El
Paso,
Texas
San
Antonio,
Texas
Population Density per square mile
Non-family households w/ income
$35,000-$150,000
39.7
978.5
456.3
417.6
1323.1
377.7
495
1139.8
670.8
478.7
33,750
42,020
55,457
50,418
85,526
37,002
13,619
35,391
14,272
-17,418
As a percent of total households
Population between 20-45 years of
age
16.49%
17.29%
17.00%
16.07%
15.13%
14.12%
12.73%
11.37%
7.39%
-4.09%
199,552
207,677
279,437
269,348
492,879
238,531
92,435
282,391
196,250
450,331
Target as percent of population
37.05%
34.13%
36.51%
35.05%
35.05%
37.14%
38.92%
33.78%
33.64%
37.46%
Growth rate
13.944%
2.412%
0.288%
6.390%
-3.576%
3.411%
117.159%**
-6.791%
6.197%
9.773%
Rank (1=best)
21
22
23
24
25
26
27
28
29
30
* All information from www.census.gov, and is based on 2005 estimates
** In 2003, Louisville, Kentucky redrew the city boundaries to include the neighboring Jefferson county, leading to an artificially high
growth rate between 2000 and 2005. This factor was considered in the ranking of the cities.
32
New York,
NY
San
Francisco,
CA
Boston,
MA
Seattle,
WA
Washington,
D.C.
Los
Angeles,
CA
Austin,
TX
Denver,
CO
San
Diego, CA
Columbus,
OH
8,143,197
739,426
559,034
573,911
550,521
3,844,829
656,562
557,917
1,255,540
730,657
2000
Population
Growth (‘00‘05)
Population
2
Density
SEX
AND
AGE
8,008,278
776,733
589,141
563,374
572,059
3,694,820
690,252
554,636
1,223,400
711,470
1.685%
-4.803%
-5.110%
1.870%
-3.765%
4.060%
-4.881%
0.592%
2.627%
2.697%
8,158.70
1,704.7
1,685.10
545.9
756.3
2,344.20
295.9
560.9
670.0
490.3
Male
3,778,081
362,869
252,170
270,027
242,560
1,866,012
347,746
276,183
604,459
342,814
4,178,032
356,208
268,532
266,919
272,558
1,865,425
330,711
269,015
603,872
351,169
589,427
39,718
36,035
31,852
37,723
287,230
56,130
51,160
93,399
60,740
5 to 9 years
10
to
14
years
15
to
19
years
20
to
24
years
25
to
34
years
35
to
44
years
45
to
54
years
55
to
59
years
60
to
64
years
65
to
74
years
75
to
84
years
85 years and
over
Total
1
population
Hispanic or
Latino
(of
any race)
494,233
23,755
27,063
22,672
27,746
265,343
44,713
36,066
78,333
44,050
529,275
29,156
27,379
21,424
30,562
288,309
39,614
30,985
82,378
43,489
483,722
25,756
28,071
20,805
21,257
257,284
38,580
26,907
77,575
39,725
504,293
38,924
50,465
41,462
25,898
280,287
69,287
33,829
96,545
62,170
1,264,189
133,331
109,780
108,525
105,606
594,344
137,523
102,202
211,166
131,641
1,272,179
140,775
82,507
95,502
78,541
596,361
107,029
87,998
183,516
106,624
1,081,910
105,896
61,998
75,485
69,704
482,100
90,980
69,598
158,608
88,634
451,939
43,051
26,688
35,744
31,941
194,593
31,048
29,498
60,170
32,186
341,689
33,539
17,345
24,959
23,646
139,599
18,439
18,385
42,963
24,541
479,888
50,928
27,852
25,309
31,909
179,082
25,807
28,264
62,781
31,627
341,659
38,735
18,227
22,297
23,420
129,504
14,600
23,129
47,144
21,435
121,710
15,513
7,292
10,910
7,165
37,401
4,707
7,219
13,753
7,121
7,956,113
719,077
520,702
536,946
515,118
3,731,437
678,457
545,198
1,208,331
693,983
2,221,906
98,891
76,494
33,707
45,901
1,824,373
223,361
191,510
312,767
24,607
White alone
Black
or
African
American
2,746,422
315,374
295,089
387,436
152,879
1,063,362
347,013
405,253
585,671
442,958
1,893,988
45,808
135,567
50,277
290,128
355,486
59,583
59,921
80,171
179,197
City:
Population
2005
1
Female
Under
years
5
33
New York,
NY
San
Francisco,
CA
Boston,
MA
Seattle,
WA
Washington,
D.C.
Los
Angeles,
CA
Austin,
TX
Denver,
CO
San
Diego, CA
Columbus,
OH
19,357
1,836
4,186
14,594
1,132
8,347
2,578
11,052
3,887
1,610
Asian alone
Native
Hawaiian and
Other Pacific
Islander
alone
Some other
race alone
Two or more
races
Non-family
households
Households
with one or
more people
under
18
years
Population
16 years and
over
916,367
237,638
46,696
86,366
14,997
408,329
35,239
18,793
187,011
27,125
2,550
2,726
0
3,539
189
7,621
100
0
5,631
75
82,247
1,676
49,849
18,069
3,451
18,948
3,675
66,581
3,986
1,940
73,276
15,128
6,377
19,514
6,441
44,971
6,908
8,286
29,207
16,471
1,186,235
181,072
120,372
148,493
139,730
500,059
139,887
121,706
189,711
130,381
988,457
56,948
58,356
53,015
55,785
456,327
85,961
59,770
148,296
95,818
6,241,257
620,414
425,443
456,619
413,322
2,835,315
530,472
420,898
936,692
537,808
In labor force
3,869,575
420,227
287,898
331,383
282,189
1,875,776
390,775
297,292
630,365
377,036
In retail trade
INCOME AND
3
BENEFITS
Total
households
Less
than
$10,000
$10,000
to
$14,999
$15,000
to
$24,999
$25,000
to
$34,999
$35,000
to
$49,999
$50,000
to
$74,999
$75,000
to
$99,999
$100,000 to
$149,999
$150,000 to
$199,999
332,225
36,235
21,557
29,866
11,550
175,514
36,821
25,744
55,324
45,390
3,026,196
322,399
233,028
261,433
248,213
1,284,124
289,688
241,579
466,579
301,325
407,196
33,435
37,097
24,932
33,380
140,031
27,524
22,618
29,598
33,463
203,040
19,306
18,983
15,525
13,313
88,374
17,637
15,739
21,765
18,842
348,330
29,867
23,353
27,521
23,719
172,757
33,639
32,678
47,694
38,332
313,632
23,579
20,720
26,124
25,975
141,434
34,801
29,748
44,038
38,717
397,203
35,635
28,849
38,061
33,274
174,033
47,980
37,182
67,775
54,669
504,221
53,240
36,778
44,504
40,429
221,100
47,917
41,801
85,266
56,151
303,719
37,626
24,313
27,491
24,654
127,501
29,224
23,658
59,376
32,116
306,023
46,496
24,152
30,810
24,243
116,348
30,895
22,166
64,683
21,985
103,156
19,639
7,926
14,191
12,439
42,757
8,848
8,111
22,776
3,930
City:
alone
American
Indian
and
Alaska Native
alone
34
City:
$200,000 or
more
Median
household
income
(dollars)
Mean
household
income
(dollars)
FAMILIES
Family
Households
Less
than
$10,000
$10,000
to
$14,999
$15,000
to
$24,999
$25,000
to
$34,999
$35,000
to
$49,999
$50,000
to
$74,999
$75,000
to
$99,999
$100,000 to
$149,999
$150,000 to
$199,999
$200,000 or
more
New York,
NY
San
Francisco,
CA
Boston,
MA
Seattle,
WA
Washington,
D.C.
Los
Angeles,
CA
Austin,
TX
Denver,
CO
San
Diego, CA
Columbus,
OH
139,676
23,396
10,857
12,274
16,787
59,789
11,223
7,877
23,608
3,120
43,434
57,496
42,562
49,297
47,221
42,667
43,731
42,370
55,637
40,405
66,748
83,417
66,476
73,159
75,058
66,364
62,840
61,557
74,573
50,214
1,839,961
141,327
112,656
112,940
108,483
784,065
149,801
119,873
276,868
170,944
169,792
6,568
11,617
3,377
12,025
57,350
10,464
6,421
10,850
14,513
112,198
4,565
9,778
4,044
4,915
46,692
6,529
4,735
10,116
7,882
198,776
13,869
12,321
8,086
10,813
108,512
12,628
14,310
22,673
18,421
199,231
8,961
10,407
8,856
12,315
87,696
13,571
13,970
25,029
18,957
248,782
15,724
12,899
14,809
13,357
105,600
21,339
17,562
35,257
29,676
325,022
22,959
17,462
20,844
13,853
135,280
27,163
21,849
47,655
34,204
202,533
18,725
13,719
14,066
10,284
86,573
18,469
15,145
39,396
23,520
214,421
24,432
12,492
20,540
11,629
79,933
23,705
13,545
48,440
18,134
70,282
10,800
4,808
9,174
7,927
30,974
7,529
5,639
17,149
3,273
98,924
14,724
7,153
9,144
11,365
45,455
8,404
6,697
20,303
2,364
All information from www.census.gov
1
The 2005 population and total population numbers differ because of the difference between the time the 2005 estimate was made and the time that the population
demographics were determined
2
In persons per square mile based on metropolitan area
3
In 2005 inflation adjusted dollars
City:
Las
Vegas,
NV
Baltimore,
MD
Indianapolis,
IN
Jacksonville,
FL
Philadelphia,
PA
Memphis,
TN
Louisville,
KY
Detroit,
MI
El
Paso,
TX
San
Antonio,
TX
545,147
651,154
784,118
782,623
1,463,281
672,277
556,429
886,671
598,590
1,256,509
478,434
635,815
781,870
735,617
1,517,550
650,100
256,231
951,270
563,662
1,144,646
13.944%
2.412%
0.288%
6.390%
-3.576%
3.411%
117.159%
-6.791%
6.197%
9.773%
Population
2005
1
2000
Population
Growth (‘00-‘05)
35
Las
Vegas,
NV
Baltimore,
MD
Indianapolis,
IN
Jacksonville,
FL
Philadelphia,
PA
Memphis,
TN
Louisville,
KY
Detroit,
MI
El
Paso,
TX
San
Antonio,
TX
39.7
978.5
456
418
1,323.10
377.7
495
1,140
670.8
478.7
Male
269,827
280,581
372,196
371,791
651,610
303,608
114,363
385,379
275,855
587,348
Female
268,826
327,900
393,114
396,746
754,805
338,643
123,135
450,677
307,564
614,875
Under 5 years
42,540
47,091
65,812
62,072
109,107
53,244
16,807
62,231
55,972
101,219
5 to 9 years
41,537
36,815
55,329
57,012
94,020
44,858
13,130
66,353
47,456
89,535
10 to 14 years
39,976
47,614
57,487
57,552
102,082
48,733
13,521
82,767
48,766
96,578
15 to 19 years
33,569
43,542
47,368
54,904
98,379
46,493
16,530
71,192
46,218
88,288
20 to 24 years
29,733
42,751
45,007
47,498
97,540
51,693
17,551
56,050
45,899
92,817
25 to 34 years
84,418
79,932
114,532
103,230
194,635
96,385
35,657
110,579
75,497
180,981
35 to 44 years
85,401
84,994
119,898
118,620
200,704
90,453
39,227
115,762
74,854
176,533
45 to 54 years
64,654
89,755
110,253
112,057
192,782
88,231
31,979
110,497
76,806
152,692
55 to 59 years
28,432
35,147
41,538
46,494
79,831
35,099
11,143
44,075
29,093
57,780
60 to 64 years
26,244
27,546
27,372
32,760
59,003
24,765
9,426
32,116
19,514
47,688
65 to 74 years
36,901
35,869
42,498
45,021
83,546
33,640
17,844
42,048
34,014
63,192
75 to 84 years
19,704
28,035
29,516
24,694
70,817
22,932
10,796
32,050
23,197
42,928
City:
Population
2
Density
SEX AND AGE
85 years and over
5,544
9,390
8,700
6,623
23,969
5,725
3,887
10,336
6,133
11,992
Total population
Hispanic or Latino
(of any race)
538,653
608,481
765,310
768,537
1,406,415
642,251
237,498
836,056
583,419
1,202,223
153,813
13,887
47,764
41,556
146,856
26,563
4,222
46,993
465,287
735,458
White alone
Black or African
American alone
American Indian
and Alaska Native
alone
281,679
180,834
491,044
450,527
545,169
192,413
154,446
77,163
467,150
356,420
59,780
394,839
193,948
232,415
617,146
404,032
72,526
683,999
20,166
70,723
3,169
2,294
2,149
2,379
2,584
637
0
2,541
5,428
2,727
Asian alone
Native Hawaiian
and Other Pacific
Islander alone
Some other race
alone
Two
or
more
races
Non-family
households
Households with
one
or
more
people under 18
years
25,077
9,783
12,312
28,388
72,440
11,235
4,011
9,577
8,230
20,492
2,206
136
279
264
284
0
0
271
1,192
754
1,350
1,104
2,791
3,964
6,285
1,067
2,221
3,829
95,551
3,955
11,579
5,604
15,023
9,044
15,651
6,304
4,974
11,683
3,665
11,694
71,953
116,704
132,456
113,782
243,727
106,108
52,462
121,506
47,087
140,946
71,950
70,543
104,829
108,842
179,684
88,204
33,341
121,256
88,532
166,378
1
36
City:
Population
16
years and over
Las
Vegas,
NV
Baltimore,
MD
Indianapolis,
IN
Jacksonville,
FL
Philadelphia,
PA
Memphis,
TN
Louisville,
KY
Detroit,
MI
El
Paso,
TX
San
Antonio,
TX
407,308
466,519
575,416
580,684
1,078,828
484,842
191,520
606,790
421,898
896,471
In labor force
273,147
296,871
403,422
391,940
634,893
325,586
122,905
349,559
251,958
584,082
In retail trade
INCOME
AND
3
BENEFITS
28,371
25,536
45,101
42,589
50,255
33,572
11,738
23,530
28,795
61,809
Total households
204,688
242,978
326,261
313,695
565,433
261,983
106,965
311,234
193,137
426,227
Less than $10,000
15,360
37,527
30,405
27,411
92,718
37,050
19,626
65,210
27,703
47,112
$10,000 to $14,999
10,134
23,849
21,499
18,955
52,626
21,004
11,454
26,657
20,671
32,194
$15,000 to $24,999
23,930
36,283
42,234
28,674
84,322
42,481
14,532
49,851
29,437
55,357
$25,000 to $34,999
22,984
29,052
44,864
46,269
67,502
36,231
14,532
41,802
25,989
53,473
$35,000 to $49,999
33,431
34,641
52,230
54,116
84,434
43,054
15,821
43,036
27,501
71,624
$50,000 to $74,999
39,176
39,282
61,845
63,382
91,549
40,771
16,178
48,429
31,397
78,431
$75,000 to $99,999
$100,000
to
$149,999
$150,000
to
$199,999
25,358
18,289
34,300
35,272
45,162
19,236
7,713
20,687
15,123
39,580
24,169
15,845
27,109
25,617
29,998
13,586
4,756
11,812
9,601
31,663
5,224
3,783
6,916
6,873
9,701
4,083
1,517
2,340
3,404
8,974
$200,000 or more
Median
household
income (dollars)
Mean household
income (dollars)
4,922
4,427
4,859
6,126
7,421
4,487
836
1,410
2,311
7,819
47,863
32,456
41,578
44,173
32,573
33,244
30,327
28,069
32,205
40,186
63,286
47,417
53,977
56,925
44,578
47,361
40,540
37,271
44,097
53,352
FAMILIES
Family
Households
132,735
126,274
193,805
199,913
321,706
155,875
61,582
189,728
146,050
285,281
Less than $10,000
7,693
13,962
12,978
11,731
35,959
17,936
6,067
29,881
15,294
20,596
$10,000 to $14,999
3,418
9,412
6,797
7,302
23,454
9,941
3,960
13,360
14,358
17,712
$15,000 to $24,999
12,820
16,282
20,780
16,686
44,363
22,514
5,595
28,695
22,428
32,165
$25,000 to $34,999
12,414
14,572
23,904
25,228
40,199
18,438
6,483
26,075
19,780
32,959
$35,000 to $49,999
21,482
19,074
31,395
33,819
49,650
26,104
9,302
28,703
21,869
49,355
$50,000 to $74,999
27,848
22,795
40,172
44,542
59,434
28,172
12,515
34,513
25,056
58,003
$75,000 to $99,999
$100,000
to
$149,999
$150,000
to
$199,999
19,079
13,339
25,753
27,749
32,767
14,327
5,480
15,983
13,609
32,156
19,975
10,829
22,707
21,859
23,766
11,042
3,552
9,374
8,816
27,578
3,805
2,976
5,368
5,694
6,465
3,360
933
2,057
3,089
7,520
$200,000 or more
4,201
3,033
4,151
5,303
5,649
4,041
616
1,087
1,751
7,237
37
All information from www.census.gov
1
The 2005 population and total population numbers differ because of the difference between the time the 2005 estimate was made and the time that the population
demographics were determined
2
In persons per square mile based on metropolitan area
3
In 2005 inflation adjusted dollars
Dallas, TX
Portland,
OR
Phoenix,
AR
San
Jose, CA
Houston,
TX
Fort
Worth,
TX
Milwaukee,
WI
Nashville,
TN
2,842,518
1,213,825
533,427
1,461,575
912,332
2,016,582
624,067
578,887
549,110
540,828
2,896,016
1,188,580
529,121
1,321,045
894,943
1,953,631
534,694
596,974
545,524
12.965%
-1.847%
2.124%
0.814%
10.638%
1.943%
3.222%
16.715%
-3.030%
0.657%
444
1,634.20
569
381.5
223.1
1,303.60
705.7
583.5
1,028.00
302.3
297,743
1,299,933
582,784
253,078
694,972
452,470
974,834
302,247
268,031
253,822
303,855
1,401,993
562,162
260,549
683,008
434,860
966,596
302,291
288,917
268,840
50,463
215,448
112,412
33,946
121,471
73,444
173,274
57,881
48,153
41,793
43,875
192,010
79,818
33,139
110,483
62,908
144,653
48,932
42,313
31,302
41,682
192,047
74,041
27,739
105,047
67,324
134,316
43,326
45,687
34,288
38,864
173,662
65,614
27,128
95,316
57,524
131,568
39,942
42,100
27,925
39,430
200,989
87,256
30,424
107,313
54,342
149,842
48,606
44,102
31,504
100,025
463,236
218,445
90,023
239,444
133,144
323,010
106,820
82,060
85,549
102,673
401,679
172,199
84,148
201,219
155,311
288,509
84,261
81,053
85,867
83,532
343,098
142,271
80,007
182,780
122,112
260,019
75,287
72,754
76,127
33,360
137,742
52,377
33,827
65,323
49,223
99,413
30,239
29,328
31,310
21,717
105,930
41,066
19,714
45,908
33,562
74,607
17,970
17,338
21,657
25,782
143,922
56,759
25,784
59,230
45,370
91,350
27,935
25,234
30,362
15,708
97,850
32,161
19,276
35,235
23,408
56,713
18,179
20,548
17,629
4,487
34,313
10,527
8,472
9,211
9,658
14,156
5,160
6,278
7,349
601,598
2,701,926
1,144,946
513,627
1,377,980
887,330
1,941,430
604,538
556,948
522,662
58,466
778,234
482,024
43,324
575,436
279,420
820,510
192,819
80,945
37,463
Charlotte,
NC
Chicago, IL
610,949
2000
Population
Growth (‘00’05)
Population
2
Density
SEX
AND
AGE
Male
City:
Population
2005
1
Female
Under
years
5
5 to 9 years
10
to
14
years
15
to
19
years
20
to
24
years
25
to
34
years
35
to
44
years
45
to
54
years
55
to
59
years
60
to
64
years
65
to
74
years
75
to
84
years
85 years and
over
Total
1
population
Hispanic or
Latino
(of
any race)
38
Dallas, TX
Portland,
OR
Phoenix,
AR
San
Jose, CA
Houston,
TX
Fort
Worth,
TX
Milwaukee,
WI
Nashville,
TN
819,215
346,876
382,033
665,429
281,822
539,092
266,591
257,940
314,518
205,216
938,097
269,762
30,828
67,263
27,446
451,325
109,620
230,551
148,051
1,465
3,841
3,011
2,961
26,259
2,567
3,214
2,590
7,128
1,428
Asian alone
Native
Hawaiian and
Other Pacific
Islander
alone
Some other
race alone
Two or more
races
Non-family
households
Households
with one or
more people
under
18
years
Population
16 years and
over
23,356
127,686
31,404
36,278
26,469
269,186
111,149
24,857
21,725
16,943
0
882
305
1,890
757
3,043
1,174
538
505
0
1,957
9,164
3,460
1,543
2,699
5,522
3,747
1,749
51,628
676
8,349
24,807
8,104
14,770
13,668
18,324
11,219
5,774
8,304
3,583
96,995
424,914
187,366
109,696
189,749
79,201
274,882
70,089
100,764
98,374
84,933
336,306
147,658
59,741
186,988
122,245
270,893
86,227
78,809
71,240
455,431
2,063,395
863,974
412,638
1,020,457
671,692
1,461,437
446,734
411,067
410,094
In labor force
335,618
1,346,765
599,665
286,349
718,948
450,395
991,540
307,120
265,733
281,255
In retail trade
INCOME AND
3
BENEFITS
Total
households
Less
than
$10,000
$10,000
to
$14,999
$15,000
to
$24,999
$25,000
to
$34,999
$35,000
to
$49,999
$50,000
to
$74,999
$75,000
to
$99,999
$100,000 to
$149,999
33,278
101,774
57,169
28,702
77,438
44,971
92,050
35,843
24,736
28,162
249,403
1,020,605
443,764
228,167
503,753
288,339
733,101
218,999
228,861
233,588
19,672
133,257
49,040
24,329
37,300
15,367
76,090
22,234
30,344
23,187
12,440
73,223
30,675
15,025
29,440
11,094
62,671
14,095
20,292
13,764
32,452
123,892
69,752
28,551
69,007
22,929
112,854
30,518
37,924
34,050
28,940
121,258
64,057
27,235
67,702
18,782
96,543
29,189
34,024
31,537
37,857
142,230
74,131
35,141
85,415
33,646
114,330
36,419
36,420
39,743
44,528
173,114
64,637
40,231
93,360
50,666
115,878
38,116
40,195
41,122
23,433
98,598
30,961
22,977
50,590
38,175
56,519
20,703
17,723
23,481
28,301
91,842
28,033
21,432
44,003
56,018
54,332
18,567
8,343
17,273
Charlotte,
NC
Chicago, IL
White alone
Black
or
African
American
alone
American
Indian
and
Alaska Native
alone
302,789
City:
39
City:
$150,000 to
$199,999
$200,000 or
more
Median
household
income
(dollars)
Mean
household
income
(dollars)
FAMILIES
Family
Households
Less
than
$10,000
$10,000
to
$14,999
$15,000
to
$24,999
$25,000
to
$34,999
$35,000
to
$49,999
$50,000
to
$74,999
$75,000
to
$99,999
$100,000 to
$149,999
$150,000 to
$199,999
$200,000 or
more
Dallas, TX
Portland,
OR
Phoenix,
AR
San
Jose, CA
Houston,
TX
Fort
Worth,
TX
Milwaukee,
WI
Nashville,
TN
31,506
13,383
7,295
14,681
22,275
20,495
5,545
1,810
3,761
11,460
31,685
19,095
5,951
12,255
19,387
23,389
3,613
1,786
5,670
47,131
41,015
36,403
42,287
42,353
70,921
36,894
40,663
32,666
40,214
69,031
59,026
58,825
59,153
58,290
88,399
56,784
55,586
41,526
54,464
152,408
595,691
256,398
118,471
314,004
209,138
458,219
148,910
128,097
135,214
7,781
55,169
21,194
7,515
19,958
6,795
38,375
11,394
14,241
9,485
4,702
35,700
16,756
4,980
14,264
6,148
32,930
7,103
8,632
6,106
17,031
70,005
41,885
10,518
40,803
15,674
69,203
18,680
20,585
16,459
17,444
70,697
37,891
11,177
37,382
14,703
62,553
18,627
19,126
15,815
20,117
82,024
37,874
18,758
52,651
22,258
67,635
22,561
19,696
20,080
27,650
106,245
38,004
22,608
58,396
34,938
73,737
28,648
23,740
26,993
17,351
66,427
19,075
16,011
34,838
27,751
38,766
17,780
12,975
18,940
22,103
64,969
18,217
15,532
34,655
44,606
38,702
15,835
6,640
14,101
8,296
21,160
10,195
6,213
11,827
19,425
16,386
5,030
1,249
2,541
9,933
23,295
15,307
5,159
9,230
16,840
19,932
3,252
1,213
4,694
Charlotte,
NC
Chicago, IL
10,320
All information from www.census.gov
1
The 2005 population and total population numbers differ because of the difference between the time the 2005 estimate was made and the time that the population
demographics were determined
2
In persons per square mile based on metropolitan area
3
2005
inflation
adjusted
dollar
40
Appendix G:
Standard Product Mix Recommendation Changes by Aisle, to Current Suburban Store Layout
Proxy: Ann Arbor/Saline Target Store
STANDARD RECOMMENDATIONS FOR ALL URBAN STORES
Product Mix Changes
Recommendations and New Total
Current Number of Aisles
Number of Aisles
Category By Aisle
Furniture – 4 and displays
Reduce – 2
Big Furniture – 6
Remove – 0
Outdoor / Garden – 6 and display
Remove – 0
Home Improvement – 5
Reduce – 2
Seasonal Food – 4
Increase – 6
Food – 8
Increase – 10
Freezer Items – 4
Increase – 6
Additional Sections Not By Aisles
Sportswear
Reduce by 80%
Women’s
Reduce by 80 %
Menswear
Reduce by 80%
Shoes
Reduce by 50%
Maternity
Reduce by 70%
Girls
Reduce by 80%
Boys
Reduce by 80%
Toddlers / Infant
Reduce by 80%
Intimate
Reduce by 70%
Active
Reduce by 80%
Services Mix Additions
Deli/Meat stand and produce section
Concierge Desk
Banking Service
Community Connection Area
Target Kiosks
41
Appendix H: Mock-up of Target Kiosk
42
Appendix I: Michael Porter’s Boston Consulting Group Report
Figure 1: Family Dollar Expansion
* Family Dollar represents one of Target’s competitors unique to the Inner City Market.
43
Figure 2: Adapting to the Inner City Market: Best Practices
44
Appendix J: Product/Service Mix Changes
Standard Recommendations for All Urban Stores
REDUCTIONS
• Reduce Clothing/Apparel Offerings
• Reduce fashion items and apparel with high
variability. Keep socks, belts, undergarments, and
other with low variable, essential items, where sales
are not subject to changing fashion trends.
• Eliminate inventory of pre-assembled, large furniture
• Eliminate any item from Home Décor/Improvement that
cannot be carried home
• Eliminate outdoor furniture, grills and lawn accessories
ENHANCEMENTS
• Construct Urban Inventory Warehouses (UIWs)
• Filled by national distribution centers, and serve only
Urban Target stores within 30 miles.
• Expand Grocery Line:
• Include deli/meat stand and produce selection.
Expand pre-packaged foods at deli; include more
organic and international food offerings throughout
all food lines; expand Archer Farms, Market Pantry,
and Sutton & Dodge.
• Concierge Desk:
• Offer TicketMaster & Fandango movie ticket services
• Knowledgeable employees about the city
• Ability to alert cabs of customers in need of
transportation with cab light
• Target Kiosks:
• Printed shopping list guests created on Target.com;
includes aisle references for all items listed,
advertisements, SuperTarget recipes, and other
suggested seasonal items to purchase.
• Extra large, nylon or cloth bags
• Banking Service
• Devote store space to local artists to support community
and local culture.
• Connect with community
• Promote educational program, and support underfunded schools in the area
• Include Spanish circular advertisements
• Include Spanish/English signage in stores
• Hire bilingual employees in cities with high Spanish
speaking populations.
45
PHASE 1: Midtown Mix (0-4 years)
Reduction:
• Apparel Changes: minimize baby/toddler items,
maternity clothing lines
• Scale down automotive department, outdoor home &
garden, and Children’s toy departments.
• Remove fast food offerings
PHASE 2: Urban Uptown (4-7 years)
Sd
Reduction:
• Apparel offerings catered to older audience – maintain
“essentials only” product offering
• Remove fast food offerings
Enhancement:
• Dry Cleaning Service
• Grocery Line: emphasize international and organic food
offerings; emphasize pre-packaged food from deli for onthe-go customers
• Concierge Desk: taxi service
• Advertise local performers in nightlife and social venues
Enhancement:
• Concierge Desk: emphasize Broadway shows; taxi
service.
• Dry Cleaning Service
• Advertise local performers in theater and upscale arts
events
• Carry baby/toddler products
• Automotive section expanded
• More luggage/travel accommodations
• Parking structure needed
PHASE 3: Urban Core (7-10 years)
Reduction:
• Reduce luggage and travel products
• Reduce automotive offerings
Enhancement:
• Offer fast food in Urban Core stores
• Expand baby/toddler products
• Advertise local performers in music
46
Appendix K: Ten Most Desirable Locations to Enter
1. New
York,
New York
2. San
Francisco,
California
3. Boston,
Massachusetts
4. Seattle,
Washington
5.
Washington,
DC
6. Los
Angeles,
California
7956113
719077
520702
536946
515118
3731437
7.
Austin,
Texas
8.
Denver,
Colorado
9. San
Diego,
California
10.
Columbus,
Ohio
678457
545198
1208331
693983
Total
population
Family
households
w/ u18
Total
Households
988,457
56,948
58,356
53,015
55,785
456,327
85,961
59,770
148,296
95,818
302619600%
32239900%
23302800%
26143300%
24821300%
128412400%
28968800%
24157900%
46657900%
30132500%
Percent of
households
w/ u18
0
0
0
0
0
0
0
0
0
0
274642200%
31537400%
29508900%
38743600%
15287900%
106336200%
34701300%
40525300%
58567100%
44295800%
520969100%
40370300%
22561300%
14951000%
36223900%
266807500%
33144400%
13994500%
62266000%
25102500%
0.654803545
0.56141832
0.43328622
0.27844513
0.703215574
0.715026141
0.48852617
0.2566866
0.51530582
0.36171635
6,241,257
620,414
425,443
456,619
413,322
2,835,315
530,472
420,898
936,692
537,808
171485600%
9866300%
9525900%
8032700%
10179600%
89612200%
14798500%
12430000%
27163900%
15617500%
0
0
0
0
0
0
0
0
0
0
33222500%
3623500%
2155700%
2986600%
1155000%
17551400%
3682100%
2574400%
5532400%
4539000%
386957500%
42022700%
28789800%
33138300%
28218900%
187577600%
39077500%
29729200%
63036500%
37703600%
0.085855682
0.08622721
0.07487721
0.09012532
0.040930015
0.093568742
0.09422558
0.086595
0.08776503
0.12038638
$7.15/hr
$8.50/hr
$8.25/hr
$7.93/hr
$7.00/hr
$7.50 ($8.00
as of 1/1/08)
$5.15/hr
$5.15/hr
$6.78/hr
$5.15/hr
Moderate
High
High
High
Moderate
High
Moderate
High
High
Moderate
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
No
4343400%
5749600%
3962900%
4929700%
4722100%
4266700%
4268900%
3950000%
4573300%
3789500%
Total white
Total Nonwhite
Percent nonwhite
Population
over 16
Population
under 16
Percent
under 16
# retail
workers
Total Labor
Force
Percent in
retail
Minimum
Wage
Political
Environment
Among the
Top Cities
with Highest
Disposable
Income?
Median
Household
Income
47
# of Public
Trasportation
Systems
Real Estate
Condition
Distance to
Closest
Distribution
Center
Population
Density
per square
mile
Non-family
households
w/ income
$35,000$150,000
As a percent
of total
households
Population
between
20-45 years
of age
Target as
percent of
population
Growth rate
300%
300%
400%
300%
200%
300%
1 (building
another by
2008)
BUY
BUY
SELL
BUY
BUY
BUY
XXX
SELL
SELL
XXX
180.67 miles
Amsterdam,
NY
86.59 miles Sacramento,
CA
200.30 miles Amsterdam, NY
57.66 miles Lacey, WA
147.14 - Stuarts
Draft, VA
50.10 miles Fontana, CA
177.57
miles Midlothian,
TX
114.65
miles Pueblo, CO
105.73 Rialto, CA
18.30 miles West
Jefferson, OH
8158.7
1704.7
1685.1
545.9
756.3
2344.2
295.9
560.9
670
490.3
520,408
91,157
57,520
70,607
73,477
231,596
65,340
56,706
106,352
59,387
17.20%
28.27%
24.68%
27.01%
29.60%
18.04%
22.56%
23.47%
22.79%
19.71%
3,040,661
313,030
242,752
245,489
210,045
1,470,992
313,839
224,029
491,227
300,435
38.22%
43.53%
46.62%
45.72%
40.78%
39.42%
46.26%
41.09%
40.65%
43.29%
1.69%
-4.80%
-5.11%
1.87%
-3.77%
4.06%
-4.88%
0.59%
2.63%
2.70%
300%
300%
100%
48
Appendix L: Post-Urban Expansion SWOT Analysis
Strengths
1. Forecasting of Local Demand: With its urban expansion, Target has developed its
researching techniques to better anticipate consumer demand for the urban customer.
Target has learned how to best match demand with inventory to ensure that large amounts
of unnecessary inventory is not kept in the store due to space constraints and expensive
real estate in urban areas.
2. Appeal to Diverse Customers: Urban areas have an extremely diverse group of
individuals of different ethnicities and cultures. Target has taken the cultural differences
of its potential consumers into consideration when designing the store layout and
stocking of inventory in its urban stores.
3. Brand Awareness: Target has continued to increase brand awareness by entering the
urban markets and gaining exposure through innovative advertising campaigns. For
example, Target has increased its brand awareness by offering Target nylon bags with the
red bulls-eye on the side at the checkout counter for consumers to carry their purchases
home in a secure bag that will not rip as would a plastic or paper bag.
4. First Mover Effect: By entering the urban markets at an increased rate relative to
competitors such as Wal-Mart, Target has had the luxury of scoping out prime real estate
locations, as well as the opportunity to reach urban consumers before competitors
penetrate the urban market.
5. Usage of Target.com: Although Target can continue to strive to best utilize its on-line
resources, by entering urban areas, Target has managed to combine services from its online offerings to improve the in-store experience. For example, Target shoppers may
create a shopping list on-line to then print off the lists in-store with aisles marked on the
sheet as well as other items that complement your selections. This service combines
Target.com with Target stores. Additionally, Target will have expanded its on-line store
offerings to display all products that are available in Target stores.
Weaknesses
1. Capturing Secure Customer Base: Although research has guided Target’s choice of
which customer segment to target, over time, competitors will enter the urban market and
be a source of competition to lure customers away from Target and into competitors’
stores. Target should re-analyze its target customer after a few years of operation within
urban markets to further identify the needs of that group of individuals.
2. Space Constraints: With high real estate costs and space constraints in urban areas,
Target must offer only those products that customers demand in stores. Ideally, a Super
Target would suit the diverse needs of an urban customer, but with the high real estate
costs for obtaining such a large square footage of property, Target must scale back on its
less profitable or lower margin items. Over time, Target will gain a better understanding
of which products best match the needs of urban consumers and which products can be
minimized or eliminated completely from urban stores. Target should revisit the costs
and benefits of having on-site versus off-site storage facilities.
Opportunities
1. Define Target Consumer: Within a few years of entering the urban market, Target
should be able to draw several characteristics of the urban consumer, whether they are 25
49
year old single females with $50,000 of income, or 50 year old working mothers with
$80,000 of income. By expanding into urban areas, Target will have captured a different
type of consumer than the consumer who shops at suburban Targets. Thus, Target will
have expanded its offerings to a more diverse group of individuals.
2. Engage in Corporate Social Responsibility (CSR): By moving into urban areas, Target
should get involved with local communities to support a cause that Target believes in
strongly such as education. Giving back financially or through volunteerism in the local
community will allow Target to secure strong relationships with members in that city and
to ensure strong labor relations with its employees.
3. Connect with Local Cultural Groups: Given that urban areas offer a diverse range of
people, Target could get involved in the local community by supporting events
celebrating diversity. Participating or sponsoring cultural events will allow Target to
better understand and relate to its urban consumer. Events such as these could also
become opportunities to promote new product offerings or product availabilities that
would be important to such cultural groups.
4. Further Develop Target.com: Although Target has integrated its on-line offerings with
the in-store experience, Target should continue to brainstorm additional ways to increase
usage of Target’s on-line services. Expansion of credit card services may be a way to
further promote usage of on-line offerings.
Threats
1. Increased Competition: With increased competition in urban areas, Target must
maintain a high volume of customers to balance the high costs of real estate. Target
should take notice of its new competition and consider ways to partner with competition
to combine resources, such as having a shared parking garage.
2. Organizational Change: With such a drastic change of entering into a new market,
Target must be wary of what organizational challenges may arise. For example, Target
should consider how the community will react to a big box retailer entering into the city
limits, as well as how managers will react to the ambiguity of running an urban store for
the first time. Furthermore, having a more diverse sampling of employees may pose
challenging as different ethnicities have different work styles and habits. Additionally,
after expanding into urban markets, Target must strive to preserve the Target culture and
brand in order to maintain a sense of consistency across all Target stores.
3. Increased Real Estate Costs: If real estate costs continue to soar in urban areas after
Target’s urban expansion, fixed costs will become a major issue. Ideally, the benefits of
locating stores in urban areas will outweigh the costs involved of high real estate costs,
but if these costs increase significantly over time, Target will have to rethink its urban
strategy.
50
Appendix M: Promotional Advertisement
In order to ensure a successful expansion into the urban market, Target should adopt a
promotional strategy focused on giving back to the community in an inventive manner. Along
with maintaining the current promotion in television and print advertisements, the urban
promotional campaign will build upon the company’s existing strategy to volunteer locally,
develop national initiatives, and partner with many prominent not for profit organizations.
Focusing on promotional giveaways and publicity will allow Target to buzz among current and
potential customers. By shifting the bulls eye from the 22nd floor billboard down to the street,
Target will form a more intimate relationship with its customers and benefit from an enhanced
understanding of their needs.
Walking Spot: Sniffing out
city grounds
Bulls-eye Park: Buzzing about
Fun
Corner Cirque:
Captivating the
Curious
51
Additional Resources
Questions for Visiting Executive (Justin)
Complications with Urban Expansion
- General
• What part of Target strategy/image cannot be changed when addressing urban markets?
• Do you see one particular area (consumer, store format, product mix, promotional
campaigns) as being of especially great importance to the success of urban market Target
stores?
- Logistics
• Are there any limited resources or restrictions in urban markets that Target faces? EX:
Can all suppliers reach inner-city locations?
• How is it possible to handle operations, deliveries, suppliers, etc. between suburban and
urban locations?
- Product
• Which products are displayed and how are they displayed in urban stores to conserve
floor space yet maintain reasonable levels of inventory?
- Marketing
• How do marketing campaigns differ in urban vs. suburban markets and among different
cities, or do you use standard marketing across all locations?
- Other
• What types of security measures do urban Target’s currently have in place to prevent
theft and other crimes?
• Are urban market stores altered to meet local population needs? What are some
examples?
Strategy for Urban Markets
- General
• What is Target’s current strategy for expansion into urban markets? How has it changed
over time?
• In pursuing urban development, will you maintain the same approach and prioritization
of your credit card operations?
• Does Target aim to maintain consistent layouts/floor plans in its stores?
• In what areas have the urban Target’s struggled in the past?
• What weaknesses/strengths has Target had in urban markets?
- Locations
• In which urban markets is Target currently located and which cities are of interest for
future development?
• What considerations do you make when choosing locations?
- Customer
• Who do you see as the current/future urban Target customer? What do you see as their
needs, demographics, and purchasing power?
52
- Logistics/Operations
• How has the urban target handled urban related problems such as store size, etc. in
relation to on-hand inventory and other logistics issues?
- Product
• What products have sold well thus far in the urban Target’s?
- Competition
• Who do you see as your direct and indirect competition for the urban Target’s?
- Marketing/Advertising
• What type of marketing or advertising has been used showcasing urban Target’s?
- New Ideas
• Do any of the existing urban locations offer delivery services?
Current Suburban Store Conditions
• What makes Target what it is today? What are its key success factors?
• Please explain your partnership with Amazon? How has Target benefited from
Amazon’s e-commerce technology?
• Please explain your delivery/supply-chain management operations.
• How does Target – in any store – currently strategically lay out its product mix? How
does it accommodate one-stop shopping?
• How financially successful have urban locations been compared to suburban locations?
Scope of the Project
• What are Target’s goals for expansion into urban markets?
• Does Target want to grow into urban markets that currently don’t have locations, or does
it want to improve existing urban locations/stores?
53
Target Project Timeline
Signals
Signals
Signals
Signals
task start date
work time for task
task due date
Meeting Date
Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri
3/6/2003
3/10/2003
3/17/2003
3/24/2003
#######
######
A
B
C
D
E
F
G
H
I
J
K
L
M
A: Task: Meet as group to conduct introductory brainstorming session, and create timeline for project
Deliverables: none
Due Date:
3/6/2003
Completed:
3/6/2003
B: Task: Meet at 1:00pm-2:30pm to design the initial speculative issue tree, and create questions for Target executives on Wednesday, 3/14/07
Deliverables: have 5 possible questions prepared individually, and a rough sketch of the issue tree prepared before meeting
Due Date:
3/11/2003
Completed:
3/11/2003
C: Task: Meet with Target executives to deliver questions and compile answers in order to focus research efforts
Deliverables: have all questions for executives prepared before class period/come in FORMAL ATTIRE
Due Date:
3/13/2003
Completed:
3/13/2003
D: Task: Meet as group from 1:00pm-2:30pm to revamp the issue tree, schedule, and report plan based on Target executives answers to in-class questions
Deliverables: bring notes from class + personal schedule planners
Due Date:
3/13/2003
3/13/2003
Completed:
E: Task: Meet at business school at 4:00pm to visit local suburban Target and conduct field research - assess product mix/store layout. Concentrate research
on areas we decided to focus on given the information provided by Target executives
Due Date:
3/13/2003
3/13/2003
Completed:
F: Task: conduct individual research from secondary sources - e.g. databases, periodicles, news reports, financial statements. Focus on areas we decided to
concentrate on given information provided by Target executives
Due Date:
3/13/2003
Completed:
3/15/2003
G: Task: meet as group from 9:00am-11:30am to compile research on Target. Conduct a productive brainstorming session to propose possible innovative
and unique recommendations for Target's urban market goal. Also, divide the formal report into sections to be completed individually.
Due Date:
3/18/2003
Completed:
3/17/3003
H: Task: Each group member worked individually on his/her own sections of the paper. We met several times during the week for clairification of ideas.
Deliverables: Have every portion of the paper completed by the end of the week to begin compiling the document.
Due Date:
3/18/2003
Completed:
3/19/2003
I: Task: Have report compiled and ready for editing. Move onto the presentation creation
Deliverables: Written report completed by 3/26/07
Due Date:
3/25/2003
Completed:
3/25/2003
J: Task: Three group members focused on editing the document while the other three members focused on the PowerPoint and promotion ideas.
Deliverables: Have a strong working draft completed at the end of the week.
Due Date:
3/25/2003
3/27/2003
Completed:
K: Task: Meet to see final presentation and other visual documents
Deliverables: Presentation and other visual documents completed and ready for final editing by 4/2/07
Due Date:
4/1/2003
4/2/2003
Completed:
L: Task: Address any last minute concerns. Allow for 2-3 people to do a final edit of the paper including appendices.
Deliverables: Print off final paper PowerPoint deliverables and get project bound. Begin preparation process for presentation.
Due Date:
4/1/2003
Completed:
4/3/2003
M: Task: Edit final PowerPoint presentation to ensure highest quality.
Deliverables: FINAL REPORT DUE
4/5/2003
Due Date:
4/4/2003
Completed:
54
Presentation Slides
Slide 1
55
Slide 2
56
Slide 3
57
Slide 4
58
Slide 5
59
Slide 6
60
Slide 7
61
Slide 8
62
Slide 9
63
Slide 10
64
Slide 11
65
Slide 12
66
Slide 13
67
Slide 14
68
Slide 15
69
Slide 16
70
Slide 17
71
Slide 18
72
Slide 19
73
Slide 20
74
Slide 21
75