Target steps up its game to court the college crowd

In the age of online shopping, Target is trying new ways to connect with college students while also bringing stores closer to campuses as it opens new smaller-format locations.

"How we're reaching college students has changed and is evolving," said Joshua Thomas, a Target spokesman. "As consumers are changing, so has our strategy and how we can service students."

For more than 15 years, the Minneapolis-based retailer has played host to after-hours shopping events replete with DJs and school mascots in which they bus tens of thousands of students from campuses to Target stores around the country.

This fall, Target is paring back the number of busing events as it tries several other strategies to reach college students, an increasingly important demographic for its growth strategy.

It is testing a new service called "Shop Now, Pickup Later," a spin on the buy online pickup in store programs that many retailers, including Target, have begun offering in recent years.

In the college-focused pilot program, students at six universities including Arizona State University and the University of Nevada-Las Vegas can pre-order online from a curated list of about 300 items such as sheets, lounge chairs and mini-fridges and then pick them up weeks later around move-in time at a designated spot near campus.

"No need to haul it all from home," Target says on its website in promoting the program. "Have those big bulky items like furniture, bedding, appliances and more delivered close to campus."

At the same time, Target is reshaping its marketing outreach to students as it opens more stores right on the edge of campus. In July, the company opened four more such stores. At two of them, located near the University of Cincinnati and University of North Carolina, the retailer will offer complimentary rides to the stores in late August and early September through a partnership with Gotcha Ride, which runs free shuttles on some campuses through corporate sponsorships.

In addition, Target is experimenting with a two-day pop-up shop right on the UNC campus, bringing items like dorm-room decor, lighting and storage units closer to students while also promoting the new nearby store.

College students, a typically budget-strapped demographic, were once overlooked by retailers. But these days, retailers including Target and Amazon are increasingly courting them. The hope is that if they can hook them at a young age, they will become lifelong customers. After all, going to college is the first time many students begin buying more than clothing as they look to outfit their dorm room or first apartment.

"Heading off to college is a pretty pivotal life moment," Thomas said. "We see it as an opportunity to establish ourselves in new ways or deepen our affinity with them."

And it's a growing market. Families are expected to spend a record $54 billion, up from $48.5 billion last year, on back-to-college purchases this year, driven in part by higher college enrollment, according to the National Retail Federation.

Amazon has opened more than a dozen campus locations in the last couple years where students can pick up and return orders as mailrooms get more overwhelmed with packages from online orders. It also gives college students Prime memberships for half off the normal price after an initial six month free trial period.

Target has identified college campuses, particularly those with enrollments of more than 20,000, as a key market to open its smaller-format stores, which are also being placed in dense urban and suburban areas where its larger stores don't fit as easily.

It started testing the waters in 2014 with a 20,000-square-foot store — about a sixth the size of its typical big-box store — it opened in Dinkytown near the University of Minnesota. Target has since opened stores near Boston University, University of Maryland, Penn State and University of California, Berkeley.

In July, it followed them up with new stores near the University of Southern California and the University of California, Irvine. The latter is situated right next to a pedestrian bridge that about 10,000 students cross every day and features four self-checkout kiosks for quick in-and-out shopping trips and a seating area near Starbucks with charging stations.

In October, Target will add to its roster stores near University of Florida in Gainesville, University of Texas in Austin, and North Carolina State.

In addition to college-branded athletic gear and storage containers ideal for dorm rooms, Target is also using these stores to display new product lines such as Casper mattresses, the online bed-in-a-box company that Target recently invested in. While other Casper products such as pillows and sheets are sold in other Target stores, the mattresses are only being displayed in 35 stores near college campuses.

At a time when many other retailers are closing stores, Target is among the few large retailers that continues to open stores. It's in the midst of a ramp up of opening more of these small-format stores, with plans to open about 30 such stores this year and each of the next few years to reach 130 by 2019.

These new stores are one of the ways Target is hoping to reverse sluggish sales in addition to other strategic initiatives such as remodeling hundreds of stores, launching new brands, lowering prices and overhauling its supply chain.

Kavita Kumar • 612-673-4113