The Science Behind Target’s Store Location Decisions: Why North Dakota Lacks Target Stores

Target stores in all but one state, including four in North Dakota. But, it begs the question: Why don't we have more?

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According to TheDonutHole, there is a considerable amount of science that goes into the decision-making process, but first...

A Little History

Roseville, Minnesota, was the site of Target's 1962 debut. There has been tremendous growth for the retail behemoth since then. Target had 107 locations by 1975. In the '80s and '90s, Target ramped up its store openings to hundreds annually. When Target opened 170 additional shops in 2008, the expansion reached its pinnacle.

Nowadays, most Target stores may be found in suburban and medium-sized metropolitan areas. The South, Plains, and Midwest have the most Target stores per capita. Three states—Florida, Texas, and California—each have more than 150 Target locations.

Target Store Types

Target runs a variety of store formats to cater to different markets:

Stores selling general merchandise—These are the typical Target locations that have all the main product categories, such as apparel, housewares, furniture, electronics, food, etc. Target stores typically range in size from 80,000 to 130,000 square feet.

Stores featuring a full-service grocery department on-site are known as Super Target stores. Super Targets typically range in size from 150,000 to 180,000 square feet.

In places where space is at a premium, such as on college campuses and in densely populated urban regions, Target is experimenting with stores with a smaller footprint. The average size of these establishments is less than 50,000 square feet.

Target is able to expand into areas that were previously unsuitable for one of its big format stores because to their small format stores. Target can more readily fit these smaller stores into downtowns, limited retail spaces, and high-traffic places like college campuses or airports.

Factors For New Store Locations

When deciding where to open new stores, Target conducts thorough analyses. They take things like customer convenience, transportation patterns, demography, and density of the population into account. Some major considerations include:

Population: Within a three-mile radius, Target would be most comfortable setting up shop. Locations with higher population densities within a narrower radius may be considered in urban regions.

Median income: middle-class and affluent neighborhoods are often Target's sweet spot. They aim for median household incomes between $60,000 and $100,000. Parents and their children make up a large portion of Target's customer base, and the retailer strategically places many of its locations in suburban areas where this population resides.

Daytime workers: Target has a huge potential customer base in places where there is a large daytime workforce.

New Target stores are strategically located near high-traffic areas, where the average daily traffic count is more than 25,000 cars.

Threat from Rival Stores: Target stays away from areas where Walmart Supercenters are already set up.

Stores should be located within 100 to 200 miles of a distribution center so that Target can easily resupply its goods.

Using these standards, Target is able to zero in on the best areas and locations for new stores. Although they serve as a general framework, there are always going to be outliers. To take advantage of other, more attractive opportunities, Target may open stores that don't strictly adhere to all requirements.

Minimum Populations

Analysts can make educated guesses about the minimum population thresholds required for a Target to potentially open in an area by using Target's site selection approach. Here are a few essential minimums:

Population of Town or City—Target usually leans toward cities with 25,000 to 50,000 people.

Areas with a population of 250,000 to 300,000 or more are considered metro area markets by Target.

At least 50,000 individuals should reside within a three-mile radius of every prospective Target store location.

Daytime Population—An location is more likely to attract Target if there are between twenty-five thousand and fifty thousand daytime workers in the immediate vicinity.

Target is not going to establish shops in really little rural areas because of these population restrictions. Large suburban communities and smaller cities with substantial consumer bases within easy driving distance continue to be the chain's primary focus.

Needless to say, unless a town like Williston or Dickinson would see another population boom, the number of Targets in the state is likely stuck where it is currently at.