A soccer mom and her teenage kids pile into their minivan. The dad intercepts them in the driveway. "Where are you going?," he asks. "Target," says his wife. The daughter corrects her: Tar-zhay, which is followed by a chorus of in-the-know giggles.
Talk about an emotional connection with a brand!
What a difference a few years makes -- Target has managed to squander the almost giddy goodwill and affection that its brand of cheap chic had engendered. CausingBusiness Week to lament:
The only winners in the ongoing Target crisis are future business school students, who will be studying it for years.
Target has reached what Hollywood screenwriters call the Lowest of the Low, the point where the dilemma facing the hero seems almost insurmountable. He may consider giving up, but he musters his strength, manages to crawl out of the giant abyss and complete his journey. That's the challenge facing recently appointed Target CEO Brian Cornell.
Target Takeaways
1. Once unthinkable, corporate apologies are becoming the norm.
Concede a mistake and your competitors will turn your weakness against you. That was the conventional thinking. Now, when their brands are beaten down, companies like Target are finding that the redemption narrative may be their best option.
2. Organizational culture matters.
Some organizations pride themselves on being agile and able to accommodate and even embrace change. Target, it turns out, has a more bureaucratic and insular culture that tends to resist change.
Reports indicate Target was slow to get its arms around the digital space, though it has since made considerable strides. New CEO Cornell is the first chief executive in the company's history to be hired from the outside (from PepsiCo Americas Foods),which is encouraging.
3. When the trust between brand and customer is broken, it's hard to put it back together again.
News that credit card information for more than 40 million Target customers was breached arguably did more to erode the Target brand than any other factor. News that Home Depot one-upped Target in the latest security breach may give Target some reprieve from the media spotlight.
4. A one-size-fits-all approach doesn't work in foreign markets, even when said country plays baseball and lives next door.
Target entered the Canada market with high hopes, but instead registered high losses. The Minneapolis-based company's missteps north of the border include failing to customize its inventory and pricing strategies for a different kind of consumer.
5. Old-fashioned branding principles still hold true.
Target''s CFO John Mulligan has conceded that the retailer has gotten off its mojo in recent years. Sometimes the overriding need to develop new products and revenue sources can hamper a company's effort to build a unique and focused brand. This appears to be the case with Target, which remains committed to a grocery offering even if it muddies Target's "cheap chic" brand position.
Old-school branding gurus like husband-wife team Ries and Ries might point to theirLaw of Contraction -- if you want to earn customers' loyalty long-term, try contracting your brand instead of expanding it. They point to Little Caesar's, which didn't take off until it eliminated fried shrimp and roasted chicken from its menu, and became known for pizza alone.
The idea isn't to launch fewer products or line extensions, but to ensure you don't stray too far from the ranch when you do.
Is there good news ahead for Target?
There are signs Target is getting their act together. In Canada, they are making necessary price and product-inventory adjustments. In the digital space, they are making up for a slow start -- most of their digital traffic now comes from mobile.
Meanwhile, Target is refocusing the brand on its core strengths, a back to basics approach. Ries and Ries would approve.
But the question is whether, in the wake of the security lapse, any of these changes will make a difference: Can the damage to the brand be undone and the trust rebuilt?
In every brand story, redemption is always possible. But redemption has to be earned, it has to be sincere, and it doesn't happen overnight.
And, redemption is never cheap.