Open House is a multipurpose space challenging the notion that only function of a store is to sell products.

First, it's an immersive expression of the brand, solidifying Target's reputation as leader in design and allowing customers to get hands-on with products not available anywhere else.

Second, it's a destination for start-up founders who crave access to a retail environment. With limited supply, most new businesses struggle to engage with big stores like Target who often demand millions of units in order to supply hundreds of stores. Open House solves that problem by making them partners at a single store, rather than mere "vendors."

Third, it's a data-driven marketing and merchandising skunkworks, where Target can explore methods for presenting novel products before rolling them out chain-wide.

The centerpiece of Open House is a life-size acrylic home brought to life by giant 16-foot projection screens. Visitors use an iPad to self-identify with a lifestyle (ie, Busy Parent or Design Lover), then experience stories of how smart products can improve their lives.

The Forum contains one of the largest selections of smart devices in any store. Every product is presented out of the box to encourage hands-on interaction.

At night, it transitions from product display to event space. We designed custom modular furniture and an electronics system which allows 96 wired devices and their tables to be rolled away in a matter of minutes.

The Garage is the area dedicated to the Internet of Things' bleeding edge, home to prototypes and products not available in any other brick-and-mortar location.

Typically Target refreshes its assortment twice a year. At Open House, 16 new products are introduced every month.

The hypothesis is confirmed—a store can do more than just sell. Since opening, Open House has welcomed a steady stream of customers, journalists, and founders asking how to have their products added to the inventory.

Every month, Open House hosts sold-out events in which startup founders, VCs and journalists gather to debate the future of smart devices. These occasions publicly position Target as a thought leader in an emerging market of high-value products.

Together, the staff and digital touchpoints capture a range of qualitative and quantitative insights to be deliver to Target HQ. Surprisingly, over 100 executives from a variety of industries have made the pilgrimage to Open House to experience the future of retail.

Most importantly, Open House has crystalized its role as a crucial part of Target's portfolio. Since their debut, three smart products—Tile, Flic, and Hello have graduated and are now selling thousands of units chain-wide.

The strategy was guided by a year of on-site data collection of customers in the space as well as investigation of which insights returned the most value to the Target organization—beyond mere sales per square foot.

As we invited startup founders, we realized they didn’t have access to a physical environment, but saw enormous value in it.

At the same time, Target new some Smart Home products would be bestsellers, and they wanted a way to move upstream and get early access.

From a brand perspective, the goal was to reinforce perception that Target was a leader—boldly going where no other large retailer dared go, while maintaining a high design sensibility.

This led us to reject the accepted notion that the primary audience of a store is the consumer.

Could a store become a gathering place for customers, vendors and internal stakeholders all at the same time?

In 2015, we opened a learning lab in downtown San Francisco for Target to explore ideas for the future of retail. The 3,600 square-foot space was dedicated to the rapidly expanding Internet of Things market.

We were listening not only to see how customers reacted in the space, but also how vendors responded and which insights would be most valuable to various departments at Target, including strategy, innovation, merchandising, marketing and operations.

After a year of research and analysis we redesigned and relaunched Open House—a permanent, fully-operational store—to capitalize on the insights we collected.

With a $2 million budget, the initiative was cheaper than many media buys, but had the potential to create entirely new revenue streams.