MEGATHREAD 2018-2019 Store Modernization Megathread

[skrepo1977]

for comparison, Walmart's comp was 3.6% including their e-commerce business which also grew a ton this year

Target gave out free shipping for two months for SFS last year with no minimum, Walmart did not give out free shipping until you hit $35. Not even Amazon is dumb enough to do that. Increase in SFS with free shipping ate away at earnings that other parts of the store made

 

[flow4areasonuno]

Target gave out free shipping for two months for SFS last year with no minimum

As you pointed out...that seems like a really dumb move.

 

[Times Up]

My store saw almost 9% increase in sales this holiday season compared to last, and we do not have SFS.

Healthy economy, historically low unemployment, and consumer spending is up... those have nothing to do with Target. Target is just a beneficiary of those economic trends.

 

[RedcardReba]

Lmao the stock “jumped” back to where it was 4-5 years ago, wow just incredible to be st the same spot as it was 4 years ago while the Dow has increased by 50% since then Walmart by 15% and amazon by over 200% lol if you’re gonna be a paid corporate spammer at least learn some basics about the market before trying to use a dead cat bounce that will likely be given back in the next 4-6 weeks as justification for the broken mess Target is

I work front end, and your reply is just flat out wrong. I also am in a pilot store, so we are full tilt into new processes.

As for stock, ummmm, we are doing well. 80 per share. WS is deciding we will survive the Amazon blitz in retail, and I can see why.

Sorry you can't.

 

[RedcardReba]

Healthy economy, historically low unemployment, and consumer spending is up... those have nothing to do with Target. Target is just a beneficiary of those economic trends.

Look again. Retail overall was down. We were up.

 

[Tainted Kool aid]

The corporate goons are flooding the site. "My store is doing modernization and our sales are up so it's working" lol sales may be up at some stores but to assume it's modernization that did it... lol Pipedream...

 

[Times Up]

Look again. Retail overall was down. We were up.

Maybe you should look again? Fourth quarter sales were up for us, Kohl's, and Walmart...the big boxes. Heck, WM associates even got bonuses based upon their 4th quarter.

As the herd continues to be thinned out due to the loss of specialty retailers (think Payless and Charlotte Russe) and dinosaurs (Sears and JC PENNEY). Target just has to do the minimum to stay relevant and grab consumer dollars. Not sure if you're trying to imply that modernization is the reason for our increase in sales? It hasn't been executed at many stores yet, and from looking at posts here, it hasn't been successful at all of the stores where it is in place.

 

[gsa4lyfe]

There was a class to train us?

I mean I can speak to at least my group but I was told it’s company wide. All the TL and up in my district went to some hotel conference room for the day and had an outside person come talk to us about sales and engagement. Then my stl had to meet with all the TMs in modernization department about it. The “class” guidelines are on workbench somewhere so it’s definitely a company wide thing. This was almost a year ago though

 

[Llamanatee]

I mean I can speak to at least my group but I was told it’s company wide. All the TL and up in my district went to some hotel conference room for the day and had an outside person come talk to us about sales and engagement. Then my stl had to meet with all the TMs in modernization department about it. The “class” guidelines are on workbench somewhere so it’s definitely a company wide thing. This was almost a year ago though

Oh the sales training class that was stuff most of us already knew?

 

[can't touch this]

Oh jesus that sounds cringeworthy...how many times did the Master of Ceremonies, er I mean seminar person say "synergy" and "leverage" and "impact"? I assume everybody stood in a circle as the knife was passed around for the blood oath?

 

[gsa4lyfe]

Oh jesus that sounds cringeworthy...how many times did the Master of Ceremonies, er I mean seminar person say "synergy" and "leverage" and "impact"? I assume everybody stood in a circle as the knife was passed around for the blood oath?

Yeah pretty spot on there

 

[RedcardReba]

Maybe you should look again? Fourth quarter sales were up for us, Kohl's, and Walmart...the big boxes. Heck, WM associates even got bonuses based upon their 4th quarter.

As the herd continues to be thinned out due to the loss of specialty retailers (think Payless and Charlotte Russe) and dinosaurs (Sears and JC PENNEY). Target just has to do the minimum to stay relevant and grab consumer dollars. Not sure if you're trying to imply that modernization is the reason for our increase in sales? It hasn't been executed at many stores yet, and from looking at posts here, it hasn't been successful at all of the stores where it is in place.

What I see in this thread doesn't line up with what's happening in my store. But we do have an excellent management team.
9
They implement and adjust to make things work better. Sales were down in retail overall, so the argument that the economy is why we are doing better doesn't add up. Only the companies that figured out how to quickly start challenging Amazon fared well.

We did it.

Last year was gruesome as we changed, retrained, and went through a steep learning curve.

This year is different. It works.

Our store customers are online shoppers, even the older ones. They LOVE store pickup, and are adjusting even to self checkout. But we are figuring out how to fine tune staff demands, too, so there's fewer calls to the floor to bail us out. Our guest service returns are being g restocked fast. The baskets are bigger. There are few complaints.

This all took about a year to get down.

I say, hang in there.

One thing for sure, hours are down and will be tighter. That will hurt a lot of employees. Those complaints are real. But the old slow moving ways I used to see are gone.

We've got lots of people still who can't even figure out how to check themselves out, never mind really help guests. They are being moved to areas where they aren't in the way so much. Everyone else is actually learning how to use equipment and devices so they can save sales.

It makes much more sense now.

 

[Backroom81]

Sales were down in retail overall,

Where are you seeing this? Every report I've seen showed an overall growth with a dip in December that was blamed on the shutdown and stock price tumbles.

United States Retail Sales YoY

Retail Sales in the United States increased 1.70 percent in September of 2024 over the same month in the previous year. This page provides - United States Retail Sales YoY - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

Shows a net growth every month but just not as much growth as the previous year.

What the Unexpected "Fall" in December Retail Sales Really Means | The Motley Fool

The headline retail sales number is often grossly misunderstood and over-hyped.

www.fool.com

Talks about the December dip with context.

Either way, the general consensus is that the companies that have aggressively implemented their online sales programs are the ones that have been able to keep up. Target has done this extremely well. Modernization has almost nothing to do with online sales.

 

[can't touch this]

Just think of all those sales we'll be saving with our 4 hours a week!

 

[Frontlanegirl]

I mean I can speak to at least my group but I was told it’s company wide. All the TL and up in my district went to some hotel conference room for the day and had an outside person come talk to us about sales and engagement. Then my stl had to meet with all the TMs in modernization department about it. The “class” guidelines are on workbench somewhere so it’s definitely a company wide thing. This was almost a year ago though

Almost a year ago?? Never happened in my store. Our TL's never went to a hotel conference, either.

 

[No I in Team]

I posted this in "the news" thread

BoxCutter said:


GREAT! That means more hours for all TMs, right?

Right?

Right?

Hello, HQ? Anybody there ???

No, not really. Let's quickly "Go Inside The Numbers"

First, it would appear that the earnings per share got a little boost by having about 24 million less shares of common stock out there. From the report:

Common Stock Authorized 6,000,000,000 shares, $.0833 par value; 517,761,600 and 541,681,670 shares issued and outstanding at February 2, 2019 and February 3, 2018, respectively.

Then it looks as if our operating income dropped (same report, in millions of dollars):

2018: 4,110
2017: 4,224

Operating income

1,117

1,129

(1.0)

4,110

4,224

(2.7)

Apparently from a hefty increase in Sales Expenses:

Cost of Sales 4.3% increase
2018: 53,299
2017: 51,125

A little high given the efficiency gained through our new processes.

Selling Expenses 3.9% increase.
2018: 15,723
2017: 15,140

Ouch! These definitely went in the wrong direction (E2E/Modernization???). They directly correlate with the sales increase percentage wise. They should be less as we should have experienced some efficiencies with corresponding operational adjustments and planning.

Cost of sales		16,900			16,795			0.6			53,299			51,125			4.3
Selling, general and administrative expenses		4,376			4,454			(1.8)			15,723			15,140			3.9

This one is more disturbing considering there is no footnote on the drop.

It would appear that we converted about a billion dollars cash into inventory (lost 200 million somewhere). So where is it? New stores?

Cash

2018: 1,556
2017: 2,643

That's a 41% reduction. Sales only went up by 2,647 or 3.7%. This is telling as we are consuming/converting assets to offset cash flow/margins. Think of this in our terms, raiding the savings account to meet this month's rent. Eventually you plan on putting it back when ...

Assets
Cash and cash equivalents		$	1,556			$	2,643
Inventory		9,497			8,597

Then we have the increase in current liabilities (13% increase)

2018: 15,014
2017: 13,052

Total current liabilities		15,014			13,052

Sales are up, however so is the cost of doing business. We did a lot of extra work to basically get the same results.

The real question, "What going to happen when the economy slows up?" According to the numbers, we're not any more efficient.

 

[Logo]

Call me crazy but i like the way we handle repack sorting....

 

[RedcardReba]

Where are you seeing this? Every report I've seen showed an overall growth with a dip in December that was blamed on the shutdown and stock price tumbles.

United States Retail Sales YoY

Retail Sales in the United States increased 1.70 percent in September of 2024 over the same month in the previous year. This page provides - United States Retail Sales YoY - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

Shows a net growth every month but just not as much growth as the previous year.

What the Unexpected "Fall" in December Retail Sales Really Means | The Motley Fool

The headline retail sales number is often grossly misunderstood and over-hyped.

www.fool.com

Talks about the December dip with context.

Either way, the general consensus is that the companies that have aggressively implemented their online sales programs are the ones that have been able to keep up. Target has done this extremely well. Modernization has almost nothing to do with online sales.

Retail sales sink 1.2% in December in the worst plunge in nine years

Sales at U.S. retailers fizzled in December and posted the biggest decline in nine years, according to a long-delayed government report. Retail sales sank...

www.marketwatch.com

 

[RedcardReba]

Where are you seeing this? Every report I've seen showed an overall growth with a dip in December that was blamed on the shutdown and stock price tumbles.

United States Retail Sales YoY

Retail Sales in the United States increased 1.70 percent in September of 2024 over the same month in the previous year. This page provides - United States Retail Sales YoY - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

Shows a net growth every month but just not as much growth as the previous year.

What the Unexpected "Fall" in December Retail Sales Really Means | The Motley Fool

The headline retail sales number is often grossly misunderstood and over-hyped.

www.fool.com

Talks about the December dip with context.

Either way, the general consensus is that the companies that have aggressively implemented their online sales programs are the ones that have been able to keep up. Target has done this extremely well. Modernization has almost nothing to do with online sales.

Why 2018 is the year of modernization for Target

The retail chain spent 2017 testing new algorithms, processes and facility structures, but this year will be about deploying them to scale.

www.supplychaindive.com

Modernization has a lot to do with online sales.

 

[Backroom81]

Retail sales sink 1.2% in December in the worst plunge in nine years

Sales at U.S. retailers fizzled in December and posted the biggest decline in nine years, according to a long-delayed government report. Retail sales sank...

www.marketwatch.com

One of the articles I posted directly addresses that.

What the Unexpected "Fall" in December Retail Sales Really Means | The Motley Fool

The headline retail sales number is often grossly misunderstood and over-hyped.

www.fool.com

 

[Backroom81]

Why 2018 is the year of modernization for Target

The retail chain spent 2017 testing new algorithms, processes and facility structures, but this year will be about deploying them to scale.

www.supplychaindive.com

Modernization has a lot to do with online sales.

Most of what is discussed in here is Modernization in regards to in-store processes. None of the flow changes impacts the online sales at all. The big impacts from the article for online is the free 2 day shipping and using stores as fulfillment hubs for online sales. Stores have been fulfilling online sales LONG before "Modernization" was even given the name. The free 2 day shipping is just a great loss leader that helped us push the volume to the increase we are seeing.

The actual process changes have next to nothing to do with the sales increases. The "new inventory logic" leading to 40% decrease in out of stocks is sure as fuck not what people are seeing in store. Just because it's (possibly) sitting somewhere in the store doesn't mean it's actually on the shelf. Target Canada's management was gaming the hell out of the system to show they were in stock all the way until it went under primarily from empty shelves.

 

[Newbie1234567]

Completely agree! It's just that if an etl is hot to fill holes and is saying to flex then give others a chance to find it. But big picture and one that I wish could always be is what you're saying.

Edited to add that flex label holders would be key but I don't even think our store has them and if we do nobody knows about them or cares to use them.😕

Ur right! sorry ur leadership is such, shame on them!

 

[No I in Team]

Why 2018 is the year of modernization for Target

The retail chain spent 2017 testing new algorithms, processes and facility structures, but this year will be about deploying them to scale.

www.supplychaindive.com

Modernization has a lot to do with online sales.

No it doesn't.

Our online sales capability was a result of an omni channel approach to fulfilling online orders. Our DC's were not configured to "pick pack" to satisfy online sales to keep pace with Wal Mart and Amazon. We have a few dedicated DC's that can service on line sales. Other than that we where and still are dead in the water in utilizing DC capacity to support on line sales.

The omni channel approach for a retailer like us will prove out to be very costly in the long run (cost per sq. ft. - see our annual report). Short term it keeps us in the game until we can reconfigure our DC's. Otherwise if we don't shift out of the stores, we'll continually erode our margins to almost nothing.

As for the DC in NJ, it has become a non factor as apparently it did not work out as planned. No one has heard or saw any reports of it's success.

Target was literally caught "flat footed" when the competition flew past us with online order processing.

 

[Times Up]

The omni channel approach for a retailer like us will prove out to be very costly in the long run (cost per sq. ft. - see our annual report). Short term it keeps us in the game until we can reconfigure our DC's. Otherwise if we don't shift out of the stores, we'll continually erode our margins to almost nothing.

We need to both reconfigure, and automate our DCs. DC workers earn more than store level staff. Essentially, you want the lowest paid workers performing the unskilled labor.

 

[GreasyGary]

The omni channel approach for a retailer like us will prove out to be very costly in the long run (cost per sq. ft. - see our annual report). Short term it keeps us in the game until we can reconfigure our DC's. Otherwise if we don't shift out of the stores, we'll continually erode our margins to almost nothing.

Have you seen any updates in this regard? I remember seeing some video on Target's corporate site over a year ago talking about moving the DCs to replenish stores using an "eaches" model. It sounds like that would go hand in hand with DCs being able to service online orders too, but I haven't really seen/heard of any progress made there.

It seemed pretty pie-in-the-sky as far as the DC-Store relationship went. They were talking about rolling Z-racks right off the truck and everything else was pre-sorted by area in these nice little cage things. I'll do some digging and see if I can't find it. It's probably good for a laugh this far out from when it was made.