Target innovation chief to depart amid strategy pivot

Dive Brief:

Target’s chief innovation and strategy officer Casey Carl will leave the retailer early next month, Target CEO Brian Cornell told headquarters employees via an e-mail cited by the StarTribune Thursday.
Cornell told employees a replacement for Carl is being sought, writing according to the StarTribune, "Innovation is alive and well at Target. Our new leader's job will be to build upon the progress we've made.” Carl, who had held the role since 2014, was a guiding force behind Target's LA25 "store of the future" program and other innovation endeavors. His departure comes after Jason Goldberger, the retailer's chief digital officer, left the company last year after only a few months on the job.
The shakeup comes as Target attempts to shift its innovation focus from futuristic pilot projects and long-term visions to programs, ventures and growth opportunities that can have a nearer-term impact on the retailer’s core business, the StarTribune reports.

Dive Insight:

Cornell was careful to point out that as Carl exits, Target is not closing its mind, wallet or doors to innovation. But the big-box retailer does seem to be pivoting its innovation strategy.

Matt Sargent, senior vice president of retail for Frank N. Magid Associates, told Retail Dive via e-mail, "From an innovation perspective, Target's most important business objective over the last four years has been to evolve to meet the changing digital needs of its customer. Given that Target's customers have flocked to Amazon's Prime and Prime Now options at high rates indicates that this business objective has not been met."

Carl has done quite a lot to lend Target an innovative mindset and an air of entrepreneurial spirit. The LA25 stores have been part of that, but Carl's influence also accounts for Target's vertical farming initiative, its Target + Techstars accelerator program and other efforts. What Carl's departure means for the future of these initiatives is unclear. Despite Cornell's vote of confidence for innovation, the StarTribune report suggests that Target is trying to extricate itself from speculative long-term innovation projects in favor of pursuits that could have impact on its core business much sooner.

Sargent said the retailer needs to re-focus how it uses innovation to drive customer engagement. "From an innovation perspective, Target will likely need to look to the outside to evolve its digital engagement with customers," he said. "A great example of this is what Wal-Mart is doing with Jet and the fact that Walmart turned over the digital reins of Walmart to Marc Lore (Jet's founder). This move demonstrates the benefit of allowing non-traditional retail leaders to lead innovation within traditional retailers."

Ironically, Lore recently took a page from Target's innovation strategy by launching a start-up incubator program called Store No. 8. Some of Carl's projects may live on, but Target's technology operations have been in a state of flux for a few years now. The retailer had IT layoffs at one point before CIO Mike McNamara reversed that course, hiring engineers, eschewing outsourcing and building up in-house IT expertise. When Goldberger left last year after a very brief tenure, some of his digital responsibilities were absorbed by McNamara. Could the same happen with Target's innovation strategy upon Carl's departure? If not, then just who will be Target's version of Marc Lore?