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Expect more, demand change


Target this week suggested that the re-election of its board of directors is in the best interest of all its shareholders,and that may be true, but you have to wonder if the company wouldn’t benefit from some fresh thinking regarding its expect more, pay less strategy. Not the kind Pershing Square’s William Ackman is offering. He’s offered an alternate slate of four directors and wants the company to spin off real estate or credit operations to immediately reward shareholders.

No, the kind of thinking Target needs is someone to question whether expect more, pay less still works as the anchor of a marketing campaign. The philosophy has served the company well for a long time, but retailers must evolve to stay relevant to changing tastes. Target’s actions throughout its history tend to suggest the company favors incremental change, even though it would appear the company is at a point in time when a more meaningful shift is necessary to re-engage with customers based on sales results.

It is a hard choice to make. Just ask Walmart. The company dropped its long-running “always” campaign in favor of the “save money, live better,” slogan and the change proved unsettling. Now there’s no turning back and the slogan actually serves as a much better articulation of Walmart’s strategy, which these days is a lot like Targets, even to the point where its slogan is almost interchangeable with Target’s.

As Walmart has become more like Target, and achieved some success in doing so, Target has to decide whether it wants to continue being what it has always been, or if some sort of transformation is in order or possibly overdue. Expect more, pay less is a great philosophy, but no customer facing advertising slogan is meant to last forever and perhaps there is a better way of saying the same thing which could also serve to re-energize the brand.

This isn’t what Ackman is arguing for with his alternate slate of directors though. And Target has offered no indication that it is contemplating any sort of transformational change. Instead, the company released a statement attributed to no one in particular that said, “We believe that the current Target board has the strength, diversity, experience and qualification to provide effective and independent oversight and direction to the company. The Target board consists of highly qualified directors, all but one of whom are independent. Each member of Target’s board is committed to delivering superior results and serving the best interest of all Target shareholders.” The Target board members standing for re-election include Mary Dillon, EVP and global chief marketing officer with McDonald’s Corp., Richard Kovacevich, chairman of Wells Fargo & Co., George Tamke, a partner with Clayton, Dubilier & Rice, and Solomon Trujillo, CEO of Telstra Corp.

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