May 20, 2013, 3:02 PM

Target opens an e-retail technology center

The chain follows in the footsteps of Wal-Mart and Staples.

Lead Photo

A peek inside Target's new technology offices.

Wal-Mart Stores Inc. has done it (and Staples Inc., too). Now Target Corp. has opened an office where data, technology and product experts will strive to increase the chain’s strength in e-retail and mobile commerce.

Located in San Francisco, the Target Technology Innovation Center has about 20 employees, says a spokesman for the Minneapolis-based chain. Target is No. 18 in the new Internet Retailer Top 500 Guide, up from No. 23 in the previous edition.

According to the spokesman, projects those staffers will tackle include augmented reality—a computer or smartphone illustration that combines the physical word with the virtual—and signs that incorporate Near Field Communication and QR codes. Near Field Communication enables two devices to communicate wirelessly, and for those devices, often mobile phones, to receive information from a signs and posters embedded with NFC chips. Consumers can scan QR codes with their smartphones to learn about products. Both technologies can be used for in-store payments.

Target envisions the center as serving as a lab for retail experimentations. “How do we find those things that are just starting to be funded by the venture capital community?,” says center director David Newman in a video comment. He says the goal of the center is to test and learn about the latest retail technologies so the chain doesn’t “fall behind.”

Newman has worked as director of Target.com and mobile business technology since September 2012; it was unclear if he would keep that position. According to his LinkedIn account,  he had previously spent less than a year as Apple Inc.’s worldwide fulfillment operations lead, Apple Online Stores. Before that, he was Target’s senior group manager, with responsibilities that included user experience, operations and launch of a new platform for Target.com, which debuted in 1999. From 2002 until 2008, we worked as director at Walmart.com.

Walmart.com is No. 4 in the 2013 Top 500 Guide.

The Target spokesman would not comment on whether the chain had taken any lessons from Wal-Mart’s own e-commerce research and technology arm @WalmartLabs. It launched just more than two years ago. Last week, Wal-Mart bought two more companies that it plans to fold into @WalmartLabs; Wal-Mart has bought about a half-dozen technology startups since that April 2011 launch. Among the @WalMartLabs projects is a new site search tool on Walmart.com.

Wal-Mart last week also said it would hire 150 engineering and technology staffers in the Bay Area by July. Though Wal-Mart has its headquarters in Bentonville, AR, its e-commerce operation employs 1,500 staffers in Silicon Valley, most based at Walmart.com headquarters in San Bruno, CA.

Staples, meanwhile, late last year opened its e-commerce-focused Velocity Lab in Cambridge, MA, to help the office supplies chain develop e-retail and mobile commerce programs. Staples is No. 2 in the most recent Top 500 Guide.

Target joins those chains in setting up a technology center as it tries to make itself more appealing to online shoppers while finding ways to counter showrooming. That’s when consumers examine products in stores and then seek to find cheaper prices online.

In order to better compete with online retailers, after the 2012 holiday season Target said it would permanently match prices on certain items sold via Amazon.com Inc., BestBuy.com, Walmart.com and ToysRUs.com—including BabiesRUs.com—as well as items on Target.com.

And earlier this month, Target launched a program that enables consumers to receive in-store discounts via Facebook. According to the 2013 Social Media 300—which ranks retailers by the percentage of traffic to their web sites from social networks—Target receives 2.91% of its traffic from Facebook. Target ranks No. 169 in that guide.

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