Walmart and Target have been framed as retail rivals for decades, but their recent trajectories suggest they may have been solving different consumer needs all along. Now, as both companies navigate leadership transitions with new CEOs promoted from within, one is building from strength while the other works through a turnaround.

"I don't think there's anything wrong with their strategy necessarily. It's more a question of, do they have the right team or the right mindset to execute on that strategy?" said our analyst Rachel Wolff on a recent episode of "Reimagining Retail," discussing Target's challenges.

The rivalry narrative has always been somewhat misleading, according to analysts. Walmart operates upwards of 5,000 stores compared to Target's roughly 1,000 locations. But the past five years of sustained disruption, pandemic shifts, supply chain chaos, inflation, and persistent consumer uncertainty, have reshaped how these retailers compete and revealed fundamental differences in their business models.

The convergence that wasn't quite

While the two retailers have appeared to move closer together strategically, the execution tells a different story.

Target has leaned more heavily into grocery, traditionally Walmart's strength, while Walmart has expanded aggressively into soft goods like apparel.

"Walmart is sort of taking over maybe that style designation that Target has owned for a long time," Wolff said.

The convergence is real, but it's been one-sided. Walmart has successfully captured Target's traditional customer base while maintaining its value positioning. Target, meanwhile, has struggled to grow in categories like beauty and apparel despite strong overall market growth in these segments, analysts say.

The 'fun' factor has shifted elsewhere

Target built its brand identity on being a fun, design-forward shopping destination, a "cheap chic" alternative that offered discovery and delight. That positioning has eroded as other channels and retailers have captured the experiential element of retail.

The growth of TikTok Shop as a discovery and purchase platform, combined with the strength of off-price retailers like TJ Maxx and warehouse clubs like Costco, has redefined where consumers find retail therapy. Target hasn't kept pace with evolving definitions of fun shopping experiences.

"When consumers are squeezed and feeling fragile and stressed about all sorts of things, the fun element of retail becomes even more important," said our analyst Sky Canaves. "It's just that Target hasn't offered the compelling enough value in that fun for them."

Beyond merchandising, Target hasn't invested in experiential retail elements like events, sampling, demos, or pop-ups that could differentiate the in-store experience, analysts say. Multiple reports and firsthand accounts describe Target stores as messy, with merchandise scattered and shelves understocked, basic operational failures that undermine any brand promise of fun.

Consumers can find designer handbags at off-price retailers for similar prices to Target's collaboration products, with better perceived value and the treasure-hunt experience Target once owned.

Loyalty programs reveal different strategies

The retailers' approaches to loyalty programs expose fundamentally different visions for growth.

Walmart+ focuses primarily on driving e-commerce frequency, with benefits centered on free shipping, faster delivery, and convenience. The program follows the Amazon playbook: Build a loyalty base that increases purchasing frequency, attract marketplace sellers, and monetize through a retail media network, creating a self-reinforcing flywheel.

Target's approach has been more fragmented. The company started with a free loyalty program before launching paid membership (Target Circle 360) two years ago. Current strategy emphasizes experiential perks like Starbucks promotions and category-specific deals designed to drive in-store traffic and impulse purchases.

"Walmart had a very clear vision of how they wanted to execute this push into e-commerce and attracting higher income consumers, and they had a very clear sense of how everything could work together," Wolff said. "But with Target, it seems a little bit more haphazard."

Walmart's integrated approach connects loyalty, marketplace, and retail media into a cohesive ecosystem. Target's curated marketplace and separate loyalty strategy haven't generated the same flywheel effect or the long-tail advertiser base that drives rapid retail media revenue growth.

What success requires now

Modern retail success demands multiple revenue streams, technology infrastructure, and seamless experiences across channels, while still delivering on basic operational excellence.

Walmart has demonstrated this balance, analysts say, investing in partnerships with companies like OpenAI while maintaining operational discipline. Target has the ingredients, strong private label brands, a loyal customer base, physical footprint, and brand recognition, but hasn't connected them into a cohesive growth engine.

"They have all the ingredients, just a question of bringing them together in a way that makes sense for the organization and makes sense for their customer base," said Wolff.

The question facing Target's new CEO isn't whether the business model needs to change, but whether the company can finally execute on the strategy it's been articulating for years. That means fixing store operations, rebuilding brand trust, creating a connected ecosystem of loyalty and commerce, and delivering on the fun, discovery-driven experience that once defined the Target brand.

Listen to the full episode.

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