Target's CEO Brian Cornell is stepping down, with COO Michael Fiddelke set to become the new CEO on February 1, 2025, amid ongoing challenges like declining sales, market share loss, and increased competition from Walmart and discount retailers.

Target has historically grown through expanding store brands and local tailoring, but recent shifts towards online order fulfillment have impacted in-store shopping experiences and contributed to profitability issues.

Following the CEO transition announcement, Target's stock dropped over 8% in pre-market trading, reflecting investor concerns over the company's future amid consumer boycotts over diversity initiatives and sector volatility.

Fiddelke's strategy emphasizes leveraging technology, including AI, to improve efficiency, address legacy systems, and enhance forecasting capabilities, aiming to modernize Target's operations.

Fiddelke acknowledges the need for the company to return to profitable growth by embracing change, leveraging Target's strengths, and focusing on execution-driven innovation.

Target is expanding its use of artificial intelligence with thousands of new licenses to automate routine tasks, improve inventory management, and personalize customer experiences.

Fiddelke advocates for using AI and data-driven tools to optimize forecasting and operational efficiency, while also revamping store fulfillment processes to offset tariffs and manage costs.

His strategic focus includes expanding brand partnerships, digital personalization, and direct-factory shipping to enhance customer experience and manage expenses, though balancing these initiatives remains complex.

Fiddelke emphasizes the importance of faster decision-making and agility to respond to market changes, including tariffs, consumer trends, and assortment planning.

Target aims to revitalize its merchandising authority, improve the shopping environment, and invest around $4 billion in capital expenditures for new stores, remodels, and supply chain upgrades.

Fiddelke plans to create a more joyful shopping experience by ensuring stores are well-stocked, staffed, and engaging, encouraging unplanned purchases and customer satisfaction.

While Target's extensive store network and loyalty program remain competitive advantages, it faces increasing pressure from Walmart and Amazon, especially in grocery and convenience services.