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In the wake of a holiday season that was worse than the company expected, Target has decided to cut two of its most ambitious long-term projects before either even got off the ground, according to multiple sources.
One of the projects was dubbed the “Store of the Future” and consisted of a team building out a prototype for a small-format Target store that would be part showroom and part warehouse, with robots picking items behind the scenes to have ready for customers as they checked out, sources say.
The store was also expected to more closely integrate Target’s e-commerce offerings and include space for more experiential activities like classes and meet-ups.
The Store of the Future was likely to open this year, so the decision to ax it completely blindsided leaders working on the project, according to two sources. Target CEO Brian Cornell was said to be excited about the initiative, making the shutdown even more shocking, these people said.
The other project was an internal startup called Goldfish that was building a software platform that would have the potential to someday become an open marketplace on which retailers other than Target might list goods for sale, sources said. In the near term, Target was set to first use the platform itself for a fashion site that had a social media feel.
The leader of this project, former PayPal and BigCommerce exec West Stringfellow, has told people he and his staff have been let go from the company. The project was set to launch in the next month; Stringfellow had just relocated from Target’s hometown of Minneapolis to San Francisco to launch it.
The Minneapolis Star Tribune first reported some details of these shutdowns.
Together, the decisions to cut two of the company’s most innovative concepts before they premiered have flabbergasted the executives leading them, sources say. The big question festering inside the company now: What the heck is Target’s long-term plan to restart growth? The company lowered its profit outlook following a poor November and December. And nixing plans for the Store of the Future comes as Amazon is unveiling its own futuristic take on what physical stores should look like.
In response, Target issued the following statement:
At Target, we regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources. We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities. Target remains absolutely committed to pursuing what’s next. We see a tremendous opportunity to drive innovation in areas that will fuel our growth both in the short and long-term in areas such as digital, technology, supply chain and merchandising.
Target CEO Brian Cornell is expected to present to investors on Feb. 28 during the company’s annual investor day, when he will also reveal full fourth-quarter financial results.
Cornell has been the CEO for two-and-a-half years now, and Target’s stock price is essentially flat. Expect some tough questions for the chief executive that day.
This article originally appeared on Recode.net.
