# Target’s enhanced Apple shops are a bid for greater electronics sales, analyst says

GlobalData says Target is looking for ways to generate higher sales in various categories by stepping up customer service and making a bigger impact.

“While current displays at Target are perfectly acceptable, they lack the pizazz of Apple’s own stores and even of the Apple concepts at rivals like Best Buy,” wrote Neil Saunders, managing director at GlobalData.

“Moreover, Apple products can get a little lost in the wide array of gadgets that Target sells.”

The news follows announcements about Target partnerships with brands like Levi Strauss & Co. LEVI and Ulta Beauty Inc. ULTA

“While Target is unashamedly an everyday brand for average Americans, it has always tried to provide a special experience that is relatively upscale for a mainstream retailer. Big brands respect this and admire Target’s high retail standards,” said Saunders.

Target has a history of partnering with a wide variety of brands over the years.

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Target is “the true modern department store,” according to Saunders — a place where shoppers can buy both essentials and indulgences while finding new items.

The department store sector, which has struggled due to the coronavirus pandemic, faced challenges even before COVID-19 as consumer behavior shifted, including increased online shopping.

Retailers like Macy’s Inc.
M,
+2.94%
and Nordstrom Inc.
JWN,
-1.20%
are now leaning into digital capabilities. Macy’s reported fourth-quarter earnings this week that beat expectations. The company expects digital sales to reach $10 billion in the next three years.

During its investor meeting earlier this month, Nordstrom said it would expand its merchandise assortment from about 300,000 items to 1.5 million over the next three to five years.

“In the past, we have operated from a mainly store-based model,” said Erik Nordstrom, chief executive of Nordstrom, according to a FactSet transcript of the event.

“We are now rapidly transitioning to a digital-first approach, a change accelerated by what we have seen in 2020. This means offering our broadest assortment online and using customer insights and enhanced capabilities to ensure we deploy the right product to the right place at the right time.”

Watch: Desktops are making a comeback during the pandemic

Target is scheduled to report fourth-quarter earnings on March 2. The company has already released holiday season figures, with comparable digital sales up 102% and 95% of sales fulfilled in stores when taking into account sales in stores, same-day services and ship-from-store.

Target stock has rallied 67.8% over the past year. The ProShares Decline of the Retail Stores ETF
EMTY,
+0.52%
has been halved over the last 12 months. And the benchmark S&P 500 index
SPX,
-1.58%
is up 24.3% for the period.