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The CEO of retail giant Target says he would like to get his store using Apple Pay but first wants to complete the transition to using secure chip-and-PIN credit cards.
Brian Cornell was named CEO of Target in August 2014, just as the retailer suffered the reverberations of a December 2013 credit card hack that was considered one of the largest in U.S. history. About 40 million customers had their payment card information stolen, and the hackers got their hands on personal information from another 70 million. Chip-and-PIN card payment systems are considered more secure.
“Our focus is on getting chip-and-PIN in place in time for the holidays,” Cornell said at the second annual Code Conference in Rancho Palos Verdes, Calif. “Down the line we want to accept all the types of payments that our guests want. But this decision was all about focus. … It is a major undertaking to convert to chip-and-PIN, and I decided that we can’t distract the team.”
“I’d love to have Apple Pay today,” he said. “Once we finish, we’ll be open-minded” about supporting other payment systems. Cornell said he has met with Apple CEO Tim Cook and told him the same.
The company has also been playing catch-up in e-commerce, where Amazon dominates, while fending off far larger brick-and-mortar foe Walmart. What’s more, the number of customers visiting its brick-and-mortar stores, which still account for more than 97 percent of sales, was dropping.
Reminded that Target posted only $500 million, or 2.8 percent, of its $13.4 billion in total revenue in its first quarter from digital sales, Cornell said he “sees a huge upside” to the digital business. And Target is making progress, he said. Digital sales grew 37.8 percent in the first quarter. Cornell said his goal is to get that business growing 40 percent a year. One trick that may help: The retailer recently cut its free-shipping minimum in half, from $50 to $25, and is shipping more goods from stores to cut down on delivery times.
Regarding Amazon, Cornell called it “one of many competitors.”
“We almost need to say thank you to Amazon,” he said. “They have taught the American consumer to shop online, but they don’t own that relationship. … Our most profitable and our most valuable guest is the one who shops with us both online and in the store.”
Target is still facing hack-related lawsuits, but has been updating its in-store systems to prevent another breach from happening. He has also shut down underperforming businesses such as its Canada operations, since his arrival.
Cornell, who was CEO at PepsiCo Americas Foods, was also CEO of Sam’s Club, owned by Walmart, and Michael’s Stores.
This article originally appeared on Recode.net.
