What Target Won't Tell You and Why

Unlike seemingly every other retailer, Target (NYSE: TGT  ) doesn't crow about the success of online sales, or even release online sales as a percentage of total sales. In fact, it doesn't release its online growth percentages--at least not to the public.

Yes, Target did finally open up to the Securities and Exchange Commission after a letter requesting these numbers, as did big box rival Wal-Mart Stores (NYSE: WMT  ) , but why won't Target provide investors with these numbers?

Why not tell us?
According to Target, digital sales are such a big part of brick and mortar sales that they aren't broken out separately.  Internet Retailer reported that Target has no future plans to do so, either. Yet, Internet Retailer ranks Target as number 18 on its list of 500 Top Internet Retailers.

The most Target will divulge is the following from CEO Gregg Steinhafel:

We are very pleased with fourth quarter sales in our digital channels, as online and mobile sales grew faster than industry averages. As a result of our efforts to improve the website throughout 2012, key performance metrics are meaningfully improved, and our mobile sales and traffic are growing at a triple-digit pace off a much smaller base.

As we've described in the past, our investments in the website and mobile technology drive guest engagement with Target, and lead them to shop more across all of our channels. For example, following the launch of free wireless in all of our stores in the fourth quarter, Target.com was, by far, the site most commonly accessed by guests while they were shopping in our stores.

For the second quarter, reported in August, Target did not provide actual dollar numbers of online sales, and it didn't exact online sales growth percentages.

Why you need to know
Online sales for e-tailers are expected to grow 15% this holiday shopping season, following 12% growth last year. Investors naturally want to know how bricks and mortar sales compare and how effectively big box retail is battling "showrooming."

As Target reported on the first quarter call, weather was a factor in slower traffic.Online sales shouldn't be affected, and they should offset weather excuses. Investors should be able to know how much impact they had.

According to Nielsen, US shoppers spent at least 20 minutes in July visiting e-tail websites, with Amazon (NASDAQ: AMZN  ) , Wal-Mart.com, and Target's website coming in the top three at 78.5, 36.9, and 21.2 million unique visitors, respectively. Investors need to know how many visitors became customers or abandoned their shopping carts.

What Target will tell you
Target is willing to enumerate its many e-commerce initiatives that bode well for online earnings. The launch of its Cartwheel mobile app has been more successful than anticipated, according to Steinhafel. This followed first quarter comments that mobile accounted for 30% of digital traffic.

Most recently it announced its online baby subscription service, similar to Amazon's "Subscribe and Save" service (the number one e-tailer in the aforementioned Top 500 list). Customers can order recurring deliveries of frequently used baby care products, but Target's advantage is that customers can exchange or return items at Target's bricks and mortar stores. 

Wal-Mart has been no e-slouch. It was first to offer an online ship-to-store policy to turn the showrooming phenomenon on its head, actually encouraging shoppers to do just that with a mobile app and price matching policy. Target soon followed with ship-to-store widely available in the back half of this year.

Wal-Mart is doing well in omni-channel, with in-store mobile apps and Scan and Go. Both companies' websites have been refreshed, with Wal-Mart using a new and improved search engine. Target is aggressively acquiring e-commerce sites like DermStore Beauty with 26,000 beauty products, Cooking.com, and Chef's Catalog, bringing more than 30,000 cooking products on board. 

Investors want to know
Target seems to be lagging Wal-Mart somewhat if the July visitor numbers are an indication, but investors should be able to know if it actually had more online sales proportionally than its rival. Breaking out online sales as a percentage of total sales doesn't seem to be a problem for multiple retailers out there.

Both Wal-Mart and Target should let investors know what they disclosed to the SEC, so investors have an informed opinion as to the true success of these online strategies and just how they are faring against Amazon.

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