"For the last ten years, the low to mid-tier retailer Target has virtually ignored online shopping. In fact, it continues to focus primarily on stores, very recently announcing a multi-billion dollar program to modernize 600 of its 1,800 locations and open more than 100 small format stores. In recent years, they initiated an intensive online shopping effort, and are attempting to employ the Best Buy model of using stores as online distribution centers, but it’s late; Target is even behind Walmart. Up until about 2 years ago, their bricks-and-mortar focus was serving them well. More recently, things have gone downhill. Specifically, Target stock is off 29% versus 12 months ago and is now below its stock price of 10 years ago.
There is no question that bricks-and-mortar retailers are suffering as fewer consumers are stepping foot into actual stores; more and more they are opting to shop online. Department store sales in January fell 3.2% from a year earlier, continuing a downward trend for much of the past two years according to the U.S. Commerce Department. Conversely, sales at non-store retailers, a category that includes online shopping and is dominated by Amazon.com, rose 12%.
Stepping back, the lesson is very clear. Human beings are wired to sit back and enjoy any kind of success they achieve. Success generates pride which can become a crippling mentality. It often causes the individual to ignore the reality of what’s coming at them. Target is simply the latest victim."