At first glance, the retail giant Target and workout franchise Orangetheory don’t have a lot in common. One sells cute kids’ clothes and all sorts of custom-designed furnishings to the masses; the other offers a very particular and addictive style of circuit training at 1,300 gyms in 26 countries across the globe.
But sitting on stage with Fast Company senior editor Amy Farley this week at our annual Innovation Festival, their commonalities became clear. As Target CEO Brian Cornell and Orangetheory creator and cofounder Ellen Latham outlined, each company has taken a very purposeful path to building their rabidly loyal fan bases.
Here are six ways these brands became so beloved—and yours can, too.
Listen to your customers
When Latham was in her 40s, she lost her job as fitness director of a high-end Miami spa. Panicked and wondering how she’d raise her 9-year-old son without the income, the exercise physiologist opened a Pilates studio inside her home in Florida. The customers came and took classes, but Latham didn’t stop there. She solicited lots of feedback, asking what may have been missing from this traditional Pilates workout. What she heard was that people wanted a way to not just build strength and flexibility but a means to spike their metabolism. That led her to design a new workout, using just a few core pieces of equipment like rowers and weights, meant to get people into what’s known the “orange zone” (or 84-91% of their maximum heart rate for 12 minutes).
Ultimately, that feedback led her to open the first Orangetheory in 2010 in Fort Lauderdale, Florida. Then? “It just took off,” she says with a laugh. Her hands-on market research had already proven the model.
Design for everyone
Target sells billions of dollars of products a year across six in-house brands alone, like its Cat & Jack children’s clothing. But that isn’t just by offering cute shirts and skirts that will fit most children. The company has taken special efforts to make every customer feel seen. “We think, how do we make sure we use . . . design to create that inclusive environment, so everyone feels comfortable?” says Cornell.
“A few years ago, we had one of our designers who had an autistic child, who recognized that child’s needs were different,” recounts Cornell. “We started connecting to other Target guests with special needs.” What arose from that was a special sensory line of clothing (and later, furniture), with accommodations like smoother seams for children who would be uncomfortable, and even upset, by the stimulation. And just this Halloween, Target released a series of Halloween costumes for kids who trick-or-treat in wheelchairs.
“They get to celebrate that moment and feel we recognized them,” says Cornell.
Be a respite
That first Pilates studio, which would become Orangetheory, was squeezed into Latham’s 1,100-square-foot home. But even as Latham expanded Orangetheory, she kept this relatively cozy footprint rather than opening mega gyms.
Why? She says it’s like the old sitcom Cheers, with a laugh. It’s designed to be a bit tight, which creates the sort of person-to-person interactions that make members feel invited, recognized, and supported by the staff.
“So look, automation, technology, great. Yes, there are at-home workouts you can do. Great,” says Latham. “But human beings are made for relationships. We’re made for human-to-human contact. That will never go away.”
Crucially, to Latham, it’s not just about the expertise of her fitness instructors that makes this interaction important; she sees the interaction of people as a worthwhile thing unto itself. No calories required.
“People don’t care about what you know, they care that you care,” she says. “They want it especially today. We’re in a tough world . . . sometimes you don’t sit in a space feeling very cared for and good about yourself. What we’ll continue to do, in our lane, is keep that great engagement and human-to-human contact that will never go out of style.”
Don’t be afraid to borrow ideas, but offer options, not edicts
Target designs tens of thousands of its own products each year. It’s almost unfathomable (and I say that having been inside the Target design lab, seeing it happen with my own eyes). For Target, these products offer enticing profit margins and make Target a place where you can buy a product that’s not technically available anywhere else.
But sometimes, yes, those products might be inspired by what the competition is doing.
New product development “starts by listening to our consumer, [analyzing] trends . . . and spending time with our competition,” says Cornell. “[We say] ‘That’s a great trend and design. What’s the Target version of it?'”
Of course, that means Target sometimes even makes cheaper versions of products from companies like OXO, which aren’t retail competitors, but brands that it stocks on its own store shelves.
“I think there’s always room for both,” says Cornell, who points out that Target has welcomed everyone. Mainstays like Disney have opened their own pop-up stores inside Target, and new direct-to-consumer brands like Casper and Harry’s through Target have a presence in a physical retail environment. It’s about offering customers choices, not edicts. “We’re a curator . . . we work carefully to ensure there’s a balance.”
Embrace the ‘burbs
Instead of chasing the splash of building a flagship on a coast like Equinox or Soulcycle (both companies’ first locations were in Manhattan), Orangetheory opened first in Florida, then spread into suburbs and strip malls instead of dense and trendy urban centers. Its location in New York’s Soho neighborhood didn’t open until winter of 2018, years after the brand had been firmly established.
This unique strategy was key to its growth in many ways. “The emphasis was on the consumer and the results we wanted, not all the flash,” she says. She’s not wrong. In the age of social media, flash is often prioritized over substance. But she didn’t want to build Orangetheory on a foundation of hype but a foundation of experience.
“Our partners and I were in Fort Lauderdale. We wanted to be hands-on with the brand,” says Latham, who explains the Middle America approach just grew from there. “What excites me about that is, if you can prove yourself in those [areas], being in suburbia without flash and hoopla, you’ve got something. You’ve got something authentic and about what it’s supposed to be.”
Push when everyone else pulls
Cornell points out that, back in 2015 and 2016, everyone was talking about the retail apocalypse. (Guilty as charged.) The narrative was about how Amazon came in with Prime delivery and online orders and wiped everyone else out.
Indeed, that happened to some extent, and continues to. “But while analysts wrote those stories, the consumer was saying, ‘We like a physical experience.'” argues Cornell. “Eighty-five percent of all retail spend in 2019 will be in a physical store.” Indeed, Target’s profits were up more than 5% in 2018 because it invested billions in its store design while other retailers were throwing in the towel.
“Others were cutting costs and closing stores . . . and we said, we have to follow the consumer,” says Cornell, who points to new-format stores like the smaller Target in Manhattan. “We invested . . . and it’s paid off for us. But a few years ago when we made that announcement, people said why would you invest in a physical stores? What you see are . . . [market] share donors who are closing stores and cutting costs, creating opportunity for brands like Target to compete and win.”