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Fast 50 2008: Target

Target's strategy of rolling out capsule collections by well-known designers—Loeffler Randall shoes and handbags, Erin Fetherston sweaters, Alice Temperley sportswear, Jovovich Hawk dresses—has been a tried-and-true strategy for keeping the store's fashion merchandise always on the cutting edge. Add to that a continuing array of new deals, such as the upcoming collaboration with Converse to launch One Star, a vintage-inspired sports apparel and footwear line, and Target "guests" know they're likely to discover something fresh and new each time they walk in the door.

Target has been on a tear since it debuted Michael Graves's iconic teapot in 1999 for a stunning $35, solidifying its reputation as the go-to place for good design at a good price. In 2008, they'll extend that strategy with an exclusive deal with home furnishings design company StudioDwell, which will feature bedding, linens, and baby goods.

But the Minneapolis-based discount retailer's appetite for innovation extends far beyond the shop floor. Its marketing initiatives are often equally creative. Last November, it hosted its first "model-less" fashion show in the vast expanse of New York City's Grand Central Terminal, with holograms sporting the latest fall and winter apparel lines strutting down virtual runways. By posting the show on YouTube and Facebook, the company ensured that viewership extended beyond the station's million or so harried commuters.

The company regularly underwrites design-oriented initiatives, including an outdoor digital art gallery in Dallas, Design Week in New York (in conjunction with the Cooper Hewitt National Design Museum), and the Great Schools by Design program, the largest national design competition open to high school students in the country.

Internally, the company encourages outside-the-big-box-store thinking with a Big Idea contest—a challenge to staffers to think about problems in a new way. Winners don't just get a star on their performance reviews; they get a cash prize and a chance to see their ideas brought to life. True, not all of these brainstorms work. But at Target, there's no downside risk for sometimes guessing wrong. And that may be the biggest innovation of all.