You can call bad luck. Or you can call it a failure of leadership. But the announcement today that Target CEO Gregg Steinhafel has left the company speaks to problems deeper than the security breach the retailer suffered last year.
Target, as you might remember, was the “target” of hackers that were able to access personal customer information for more than 110 million Target customers. Sales faltered because of it and Target had to file for an insurance claim that paid $44 million of the $61 million the retailer had in charges.
In a sense, Steinhafel becomes the fall guy because any failures stop and end with the man up top, the CEO. But it’s silly really, when you think about it. Whether Steinhafel is the CEO or not, nothing will really change.
Target is certainly a retail giant, but it continues to be unable to steal market share because of its brand. It’s a confused brand, as we’ve pointed out recently in a retail study, because it basically apes Walmart’s “Save money. Live better” theme line with its own “Expect More. Pay Less.”
That means, if you are shopping on price, you will default to the market leader: Walmart. Target is never going to beat Walmart if it continues to occupy the same space where Walmart sits.
I know what many of you are saying. “But Target is nicer.” No, it’s not. It’s just got a different color scheme and the only reason that Walmart’s aisles are narrower is because it has more stuff. If you believe Target is nicer, it hasn’t been important enough of a belief for Target to make a dent in Walmart’s bottom line.
Target’s marketing flashes into fashion occasionally. But if you are buying for fashion, you go elsewhere. Target is a huge retailer whose success anymore is because of its many locations, with more than 1,700 in the US alone.
No, what the new CEO (and current CFO John Mulligan now holds the post in the interim) must do is find an emotional place for Target to play. It’s a common problem that many retailers have, choosing the table stakes of price, fashion, and all the other topics that have been beaten to death instead.
If you have an emotional brand that transcends the table stakes (like, say, Apple), then even a security breach doesn’t impact your bottom line as much. It protects you because consumers have such a strong emotional tie to your brand that they feel incomplete without it.
Message to the new CEO: Let’s be truly different.