BOSTON — Target’s pre-Christmas database breach not only affected the retailer’s fourth-quarter same-store sales, but also contributed to plummeting shopper penetration post-holiday, according to a new report by Kantar Retail.
Kantar Retail ShopperScape data indicates that just 33% of U.S. households reported shopping at Target or SuperTarget during January, the lowest penetration number for Target in the past three years, and a 22% decrease in penetration versus January 2013. The overall trend in Target’s past four-week shopper penetration has been on a downward trajectory for the past several years.
The retailer’s confirmation in mid-December of a major breach of its guests’ payment information proved a critical moment in exacerbating that decline, Kantar Retail stated.
“In the wake of that news, Target failed to reach a December ‘bump’ in penetration of the same magnitude as it has enjoyed in recent years,” noted Rachel McGuire, Kantar Retail senior analyst and co-author of the report. “Our shopper data reflects the extent to which this issue continues to influence shopper behavior.”
The shift away from shopping at Target in January varied among key segments of guests, but was most significant among its core guests — Gen X (i.e., shoppers 32 to 49 years old), who are more likely than any other cohort to shop Target — as well as lower-income shoppers, who tend to shop Target at a lower rate in general but whose penetration at Target declined by a full 30% from January 2013 to January 2014.
“Target is at a critical inflection point, as it strategizes how to win back the confidence of shoppers,” added Amy Koo, Kantar Retail senior analyst. “While the breach caused an immediate blow to sales and will affect traffic for some time to come, it also exposed the larger longstanding issue of Target’s fragile relationship with its less-engaged guests. While monthly guests demonstrated their commitment to Target since the breach, the same is not true for the less-engaged.”
Kantar Retail stated that, for suppliers, it has never been more important to keep best guests pleased with Target’s assortment and experience, particularly Gen Y, moms and higher-income households, as they navigate the bumpy road ahead. And particular focusalso should be given to the less-engaged guests, Gen X and lower-income households.