Target Corporation (NYSE:TGT) fourth-quarter results were not as good as projected. This was occasioned by weak store sales and tumbling profit. However, the company has vowed to make a U-turn on the missed earnings by sacrificing $1 billion in operating margins.

The company has been having challenges since 2016 to date according to CEO Brian Cornell. In fact, the drop in its full-year sales has hit hard on shares, which have crashed by nearly 12%. Kim Forrest, a senior equity research analyst describes this drop as a reflection of Target’s missteps.

Where did the company go wrong?

The retail industry is currently under much pressure from lackluster U.S. economic growth. It has also been crowded with stiff competition from the likes of Amazon and eBay. Cornell admits that the company has been hard hit by these shifts.

At the same time, Amazon.com, Inc. (NASDAQ:AMZN) price wars have been affecting almost every retailer and Target is no exception. Nonetheless, the company has still failed to meet market demands. Its COO John Mulligan concurs that they are slow even with the ample inventory at their disposal.

Target must enlist new strategies to undo its woes

The struggle has occasioned much distress among many retailers to an extent that some stores are contemplating closure.  However, Target may have to enlist new strategies to cope with the current pressure.

Cornell says they will refocus more on price for the sake of the bargain-hungry customer. He quotes, “We will invest in lower gross margins to ensure we are clearly and competitively priced every day. We are confident that these changes will best position Target for continued success over the long term.”

Target will also revamp its investment in online business given that it is targeting to have more than 100 stores by 2019. Other changes include refurbishment of its more than 600 of its older stores and launching a dozen new brands perhaps in the next two years.

In the meantime, Target’s stock closed at $58.77 a decline of $8.14 or 12.17%.