SpotOn ConsultingConsulting@spoton.com December 9, 2009

Connecting Target with Wellness:Target’s Initiative to Capture the Wellness Market

Agenda

• Target’s current position

• Identify Target with wellness• Define wellness• Generate awareness

• Improve wellness components• Revitalize item displays• Renovate pharmacy• Revamp fitness section

• Target’s potential position

• Question and answer session

• Conclusion

Target Should Take Advantageof the Wellness Movement

Strengths Weaknesses

• Target’s product offering incorporates wellness items.

• Target has strong brand value.

• Wellness products not highlighted on Target sales floor.

• Exercise equipment is disorganized.

• Sports equipment lacks a good, better, best pricing strategy.

• Health section experiences heavy congestion.

Opportunities Threats

• Wellness trend is altering buying behaviors.

• Wellness trend increasing in breadth and depth.

• Wellness trend presents opportunity to capture new consumer base.

• Wal-mart has implemented a wellness initiative.

• Multiple small retailers are established in the wellness market.

Establish Target as a Wellness Provider to Capture a New Demographic

Physically, mentally, and spiritually sound.

Define Wellness

Identify Product Offering

Create Awareness

• Being healthy

• Making good choices

• Exercising

• Eating well

Reposition these items as wellness-

oriented.• Fitness equipment

• Athletic apparel and footwear

• Health-oriented foods

• Hygiene products

• Etc.

Generate awareness of Target wellness

initiative.• Television advertisements

• Wellness Fair

• Wellness

Wednesday

Television Commercials will Identify Target as Wellness Destination

• Create awareness of Target wellness initiative

• Emphasize breadth of wellness-oriented products

• Generate business from new demographic

• Incorporate Target’s new wellness logo

• Television advertisement• Wellness Fair• Wellness Wednesday

• People will associate Target with wellness.

• Individuals will identify certain items with wellness.• Target will be established as one-

stop shop for wellness.

,

What will be Achieved:

How People will Know:

Consumers will Associate Target with Wellness

Why it will Work: • Advertisement introduces initiative• Fair generates excitement• Wellness Wednesday maintains

interest

Wellness Fair will Kickoff Wellness Initiative

• Information stands on wellness products and services

• Wellness product samples • Flyers for weekly wellness sale • Wellness-themed games for kids

• Offers fun environment

• Generates hype

• Introduces key wellness products

• Launches Wellness Wednesday

Wellness Fair

Results

Why not Simply Start the Sale?

Wellness Fair

o Defines Wellness for the guesto The only event with free samples

People will Associate Target with Wellness

o Easy to Implemento The Name is Catchy

o Rotating Sale Mixo For all guests

The sale Target needs

The sale Target wants

The Draw of the Water Cup-Coupon

Potential Water Cooler Locations

Potential Sale Areas

Create a Flow to and from Wellness Products

o On-Floor Pharmacisto Waiting Area

o Reorganizationo Seasonal Stocko Good, Better Best Pricing

o Shelvingo Wellness Identification Strip

Renovate Pharmacy

Revitalize Item Displays

Revamp Fitness Section

Revitalization of Product Displays will Highlight Wellness

• Cleanliness = Wellness.• New shelving enhances

display.• Futuristic design is appealing

• Highlights wellness-oriented products using a red strip with white Target logos

• Noticeable to those looking for wellness products.• Does not detract from non-wellness

oriented products.

Wellness Identification Strip

New Shelving

“Expect More…”

Pharmacy Renovation Enhances Ease of Shopping

Go Shopping

Pick up Next Day

Read a Magazine or Book

Talk to Pharmacist

54.2

22.0

20.4

3.4

• Location of pharmacy already entices guests to shop.• Waiting area will ease congestion.• Book and magazine sales will increase.

On-Floor Pharmacist Shows Dedication to Personal Wellness

• Assists guest with questions and concerns

• Helps guest choose right product for their lifestyle

• Shows guest Target’s commitment to personal wellness

Revamp Fitness Section to Ease Wellness Purchases For Guests

o Reorganize fitness sectiono Seasonal aisleo Good, better, best pricing

Wellness Recommendations Guarantee Results

• Differentiates Target from Wal-mart and small wellness- oriented retailers

• Establishes Target as wellness destination

• Pharmacists will aid guests in • purchase decisions

• Wellness destination

• Wal-Mart initiative

• Small retailers

• Wellness megatrend

• Opportunity to be wellness• “discount retailer’

According to Roger Deromedi, Chief Executive Officer of Kraft Foods, ”The growing importance of health and wellness has altered buying patterns to a degree that he has [I have] never seen before in the food business.” Consumers are taking interest in products that are sustainable, provide purpose, and give real value. The majority of consumers consider themselves to be wellness-conscious. Consumers are seeking multiple ways to provide themselves with a wellness-oriented lifestyle. The wellness industry will continue to grow as consumers seek and purchase items that are specific to their health and fitness needs. The nation’s largest health-oriented segment is comprised of one-fourth of the population. Individuals in this growing segment are choosing brands and retailers based on corporate values. Wellness- oriented individuals want to be able to relate to their supplier. Individuals define wellness as being physically, mentally, and spiritually sound. People identify wellness-oriented products as exercise equipment, healthy food, vitamins, and personal hygiene products. American society is at the door of a new era. One-third of U.S. adults are obese, and healthcare spending for this group has grown 80 percent in the last eight years. However, a new social trend is surfacing as more individuals take the initiative to lead healthier lifestyles. People recognize that if they practice wellness, they will spend less on future medical care. Consumers are seeking multiple ways to provide themselves with a wellness-oriented lifestyle.