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Target’s Plan to Beat Competition This Holiday Season
Minneapolis-based Target thinks it has figured out a strategy to “one-up” the competition during the critical holiday shopping season. The plan isn’t to only offer the best mix of popular products, or to continue building its omni-channel platform or even to hit the perfect price points.
Rather, the giant retailer believes it can gain an edge by raising its minimum hourly wage from $10 to $11 next month, and then to $15 an hour by the end of 2020. The new rates would apply to all current staff, as well as the 100,000 temporary workers envisioned to come aboard for the holiday season.
It is no secret the fourth quarter is vital to retailers’ success. In fact, the National Retail Federation reports for some retailers, the holiday season can represent as much as 30% of annual sales, with jewelry stores reporting the highest percentage. Overall last year holiday sales represented nearly 20% of total retail industry sales.
And the success, or lack of it, during the holidays can carry on throughout the year. The best employees hired during the holidays can serve as a catalyst, and often become key contributors after the holiday season wraps up.
A hitch in this year’s holiday hiring plans is the low national unemployment rate facing all employers. It dropped to 4.3% this summer, the lowest in 16 years. That has resulted in a much shallower pool of applicants, and will clearly challenge holiday hiring plans for all. It remains to be seen if Target’s plan to bump up wages will succeed in attracting the number and quality of workers needed to compete and handle the crush of holiday shoppers. But it certainly has thrown down an initial salvo in what could accelerate into a wage war.
For comments, questions or concerns, please contact Dennis Kaiser
