Dive Brief:
- Target is using social media and generative AI to curate its digital experience and help customers discover products, executives said during an earnings call the company held last week.
- Over one-third of guests use the retailer’s app while shopping in stores, according to Cara Sylvester, Target’s executive vice president and chief guest experience officer. “This not only gives us additional ways to merge our in-store and digital shopping experience, it also leads to more opportunities to drive sales through compelling product recommendations and promotions,” Sylvester said on the call.
- Since consumers often start their shopping journey online, Target enlists AI to catch trends emerging from social media in order to boost relevant products faster, Sylvester said.
Dive Insight:
Target is blending its product discovery process across channels to capitalize on consumer interest. Last year, when Target’s AI tools saw the mob wife leopard-print aesthetic was trending on TikTok, inspired by 25th anniversary of "The Sopranos," the retailer consulted with its vendors to get relevant products online within days and on store shelves within weeks, Chief Commercial Officer Rick Gomez said during the call.
“We were able to quickly amplify all things leopard print across our platforms right as it was trending, capitalizing on this cultural moment as it occurred rather than reading and reacting after the fact,” Sylvester said. “It isn't about stores or digital or social, it's all of them working together. We're connecting our digital experiences with our already beloved store experience unlike anyone else.”
Gomez at the National Retail Federation conference in January told audiences that Target shortened its go-to market cycle timeframe from 7 months to 8 weeks in order to list specific trending items and reach customers faster.
Whether through influencer recommendations, product reviews or customer service, shoppers are interacting with social media in new ways when thinking about what to buy while personalizing the shopping experience.
Generative AI and social media recommendations continue to lead as a primary source for purchase decisions by consumers. A Capgemini survey found that nearly 3 in 5 consumers have switched to generative AI to replace traditional search engines.
Target in particular is using generative AI to enhance the customer experience.
Target is using generative AI to summarize guest product reviews, adding detail to its product pages and building a generative AI-powered gift finder to help guests during the holidays, according to Sylvester.
Target is undergoing a multiyear strategic plan to top $15 billion in sales growth by 2030. The retailer will revamp its merchandise in some categories and open 20 stores this year, with plans to remodel “many more.” Target reported “a small decline” in net sales for its fourth quarter. The retailer said it expects both consumer and tariff uncertainties to pressure Q1 profits.
