Retailers shift their ad spending from TV, radio and print ads to digital ads.
Target Corp., the retail conglomerate formerly known as Dayton Hudson Corp., has taken aim at e-commerce with a separate unit, yet analysts nearly yawned at the significance. “It’s not exactly cutting edge, but it’s not so late that it doesn’t matter,” says Seema Williams, senior analyst of consumer e-commerce for Forrester Research, Cambridge, Mass. “They saw the skyrocketing holiday sales and finally had the gumption to do it.”
Target would not release sales figures for its flagship retail site during the 1999 holiday shopping season, except to say the amount is equivalent to sales in a mid-size Target discount store. Will Ander, retail analyst at McMillan-Doolittle, Chicago, estimates that figure to be $25 million.
The new unit, known as Target Direct, will oversee 10 Web sites and merge fulfillment operations for names such as Marshall Field’s, Dayton’s, Hudson’s and Target. The company named Dale Nitschke, former senior vice president and general merchandise manager at Dayton Hudson, president of Target Direct.
Target’s move doesn’t go as far as mainline retailers Wal-Mart, Kmart, Macy’s and Nordstrom have gone in spinning off standalone dot-com businesses, with separate boards and even venture capital backing.
According to Target, the biggest advantage of its new unit lies in consolidating the company’s fulfillment and direct marketing business, Rivertown Trading, with its Internet operations. Rivertown also includes Wireless, Signals and Seasons catalogs. “We wanted to concentrate all the resources dealing with e-commerce in one place,” says Jerry Storch, Target’s president of credit and new business. “We had activity going on in different places.”
Mark Miller, an equity analyst with William Blair & Co., read nothing exciting behind the news: “They just wanted to have a redefined management team and a coordinated business.”