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## Merchandising 

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Exclusive Design Partnerships Target is committed to offering fashion newness and excitement to our guests each time they visit our stores and our exclusive design partnerships contribute meaningfully to this differen- tiated merchandise strategy. For example, in 2003, we continued to expand our collaborations with current designers like Sonia Kashuk and Michael Graves and introduced new lines from Isaac Mizrahi, Liz Lange and Amy Coe. We believe these exclusive design partnerships reinforce our brand, delight our guests and help us sustain our competitive advantage. 

Target has consistently delivered the merchandise our guests want GLYPH<209>specifically, a selection of exceptionally priced, differentiated product that no other retailer can match. More recently, weGLYPH<213>ve concentrated increased efforts on what our guests need . ItGLYPH<213>s this unique combination GLYPH<209>appropriately balanced within our assortment GLYPH<209>that reinforces our GLYPH<210>Expect More. Pay Less.GLYPH<211> brand promise and allows us to remain relevant to our guests. 

ocus on Frequency Research shows that guests time their shopping trips to coincide with the replenishment of specific consumable and commodity items, such as household cleaners, paper supplies, prescriptions, food and beverages, and health and beauty aids. For more than a decade, sales of these categories at Target have substantially outpaced the rest of the store. To satisfy our guestsGLYPH<213> demand for greater value and convenience and to gain a greater share of their overall spending, we are elevating our focus on strategies to drive higher frequency. For example, we are: F 

¥ expanding our merchandise selection of consumable items, 

¥ increasing the visibility of everyday essentials through more prominent marketing and in-store presentation, 

¥ investing in pharmacy technology and guest communi- cation to improve speed and service and strengthen our relationship with our pharmacy guests, 

¥ merchandising and marketing to specific guest segments, such as Mom and Baby and households that are moving or relocating, and 

¥ ensuring that our prices remain competitive and compelling. 

