Target’s recent Demo Day focused on artificial intelligence

Using a keyword search, Target designers used an evolving generative AI tool to illustrate what the new fabrics might look like in sketches that created furniture ranging from a light blue couch to a Hogwarts-themed chair.

In another room on the retailer’s north campus in Brooklyn Park, software developers explained how a pilot program could signal when a customer needs more than the allotted three days to pick up an order.

It all happened at Target’s recent Demo Day in late July, a corporate event that had the feel of a science fair but was based on a serious strategy to push technology further and faster, a key part of today’s retail competition.

“It’s a great moment of connection,” said Brett Craig, Target’s chief information officer. “We really think of it as a celebration of learning.”

So a rare glimpse into the quarterly event showed tech projects on display as excited employees in nerdy T-shirts with slogans like “AI-nstein” and “Obey the algorithm” pitched ideas to corporate colleagues from finance to supply chain, including C-suite leaders. The event also allowed techies to show their playful side in a listening booth to check out AI-generated Target-themed music videos and in a puppy-petting area.

Even Craig wore a “Learning Things” T-shirt, a nod to the Netflix hit Stranger Things.

Demo days are usually associated with startups that offer their solutions to potential investors, hoping to raise capital.

Target began hosting Demo Days in 2016, and they’ve grown over the years, becoming a central part of the company’s transition to becoming a tech-first company. In a retail landscape where new technologies like generative AI are rapidly emerging, companies like Target Corp. must continue to inspire innovation to stay competitive.

“The biggest competitive advantages are through technology,” said Seth Ketron, a marketing professor at the University of St. Thomas who specializes in retail and consumer behavior.

Breaking down organizational silos so developers can share ideas with colleagues in different departments helps ensure that technology tools are used in the most practical way possible, Craig said. For example, the employee mobile interface tool that debuted at a previous Demo Day was seen by someone in the reverse logistics department who suggested it could be used to help dispose of environmentally sensitive products.

Target began embracing technology as a core part of its business about a decade ago, Craig said. The shift in philosophy came at a time when the company’s computer systems occasionally struggled, like in 2015 when its website crashed during a product launch for a design collaboration with Lilly Pulitzer. Target was still recovering from a 2013 data breach that compromised the payment card information of 40 million customers.

Virtual shopping was becoming increasingly popular at the time, and as Target faced competition from companies like Amazon.com, company leaders realized it had to improve its technology capabilities—and fast. Under the leadership of Mike McNamara, then the company’s chief information officer, Target, which at one point had outsourced about 70% of its technology work, began hiring more in-house engineers and other technically skilled workers. The company also revamped its website and built its own proprietary mobile payment system.

McNamara noted that the retail battleground will be built on technology and supply chains, changes that were put to an abrupt test at the onset of COVID-19 in 2020, when the world went virtual virtually overnight.

Target saw record sales growth during the pandemic years as many consumers used its website and mobile app to place pickup and drive-thru orders when they didn’t want to shop in person. Target continues to refine its technology, like this year when it launched a new, more personalized Target Circle loyalty program that makes it easier for customers to apply discounts to orders, and this year’s introduction of a generative AI chatbot for store associates.

Generative AI has a range of potential applications that retailers are experimenting with, said Mara Devitt, senior partner at Chicago retail strategy firm McMillanDoolittle. McMillanDoolittle helps sponsor the Retail AI Council, where members learn about the latest AI trends and exchange knowledge.

“We’re learning,” Devitt said. “We’re in learning mode right now, and part of learning is you have to learn what works well, and you can learn from the things that don’t work so well.”

And the technology is evolving rapidly: The number of companies mentioning GenAI rose from 0% in the second quarter of 2022 to 27% in the second quarter of fiscal 2023, according to a review of 30 leading retail and consumer goods brands by research and advisory firm Forrester.

Ketron, a marketing professor at the University of St. Thomas, says a collaborative event like Demo Day can be a strategic way to focus on technology solutions across the organization.

“Something like Demo Day is a way to get everyone in a room and bounce ideas off each other and learn from each other and really take on new challenges where we really don’t know how things are going to turn out, we feel a little less scared,” he said.

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