Targeting changes in big box stores

ROBERT STEUTEVILLE
New Urban News

Until recently, all Target stores were the typical single-story boxes with surface parking. But in the last half-decade, Target has built or acquired 35 multilevel stores with structured parking and another 8 stores with parking underneath. In all, about 3 percent of Target’s 1,350 stores nationwide have unusual urban formats that Target calls “unique.”

Unlike Wal-Mart, which so far has resisted radical changes to its building designs, Target has gone so far as to build one store in Brooklyn’s Atlantic Terminal that has no dedicated parking. Another store planned in Queens, New York, will be beneath 800 housing units.

The trend is growing, according to Scott Jordan-Denny, manager for unique store design, and Rich Varda, vice president for store design, both of whom spoke to New Urban News. There are dozens of unique Targets on the drawing board.

The first two-story Target opened in 1999 in the Washingtonian Center, a lifestyle center in Gaithersburg, Maryland, centered on a main street. At around the same time, the firm purchased two-story Montgomery Ward stores and converted them to Targets. The company has since built stores in downtowns and urban centers across the US.

Many of the stores have been constructed in key shopping districts of major metropolitan areas and downtowns, such as the Chicago Loop, West Hollywood, Washington, DC, downtown Minneapolis (where Target is headquartered), the Bronx, and the aforementioned Brooklyn. Other stores have been built in smaller downtowns or urban centers outside of major cities — Stamford, Connecticut, and Alexandria, Virginia, are examples. Still others are sited in new town centers or lifestyle centers, such as the planned Annapolis Towne Center at Parole in Annapolis, Maryland, and the center in Gaithersburg.

“In general, Target is not doing these kinds of stores unless they have to,” says Charles Bohl, director of the University of Miami’s Knight Program in Community Building and author of Place Making: Developing Town Centers, Main Streets, and Urban Villages, who has researched Target’s program. They are building these stores where higher land costs and constrained sites in urban areas require it.

The main thing that has changed at Target in the past five years is that the company has learned how to design and build urban-format stores and has gotten a handle on the costs, so that calculations can be made on profitability, says Varda. The higher costs of such stores include design, construction, and entitlement. Whereas a typical Target can go from conception to the doors opening in less than a year, the unique stores take two to three years, says Jordan-Denny. Operational costs are also higher due to factors such as more employees being required to cover two floors; larger circulation areas having to be maintained; and escalators requiring maintenance. On the other hand, urban stores have more customers and generate higher revenues, Jordan-Denny explains. “Every store has to stand on its own and be able to be financially successful.” Target’s accelerating construction of unique stores attests to their success.

In part, the Target urban stores reflect a larger trend in retail, Varda says. “The whole retail industry has woken up to the fact that new formats are needed.”

The “unique” stores come in a variety of formats. Some are two stories with attached structured parking, as in Chicago and Gaithersburg. Other two-level stores are on top of structured parking wrapped with liner retail, as in Stamford. The Atlantic Terminal store, which opened last October, occupies the second and third floors on top of a major train station. Still others are single-story stores above structured parking.

The typical Target is on a 10-12 acre site. The single-story stores above parking typically use eight-acre sites, while the two-level Targets can fit on sites as small as three acres, Jordan-Denny says. Regardless of format, all new Targets are at least 125,000 square feet, with an identical product line. For example, the downtown stores include the same patio furniture. “Patio furniture sells well in the city,” notes Jordan-Denny.

Instead of sitting behind large parking lots, many or the unique stores come right up the sidewalk with prominent, two-story entrances at intersections. The Minneapolis store resembles an old-style department store. Target still tends to avoid extensive display windows with views into the floorspace, which means that blank walls are still a problem. Where liner stores are not part of the design, the firm is experimenting with prototype display windows with animated advertising images that offer a sense of penetration into the wall, Varda says.

All multi-level Targets have cart conveyors that allow shopping carts to ride up or down alongside customers. This technology was developed over 30 years ago in Germany by a company called Vermaport, but now there are US manufacturers, Jordan-Denny says.