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After Investing in Online, Now Target is Focused on Product Mix

After a third-quarter earnings miss, Target Corp. is upping its game, finding new ways–through Target+ and the launch of three more private label brands–to create a unique, yet easy, shopping experience for its customers.

The latest initiative is Target +, a curated assortment from third-party sellers on the discounter’s website. According to Target, “Since each partner is carefully selected and invited into the program, guests will find more of what they are looking for with the high quality and value they expect to find at Target.” The new curated products are “seamlessly” integrated throughout Target.com, whether it’s a selection of running shoes, outdoor and patio accessories, new musical instruments or baseball gear.

“Target + provides guests with a curated selection of product choices that enhance our existing assortment, with the perks they enjoy from Target, like 5 percent off with a Target REDcard, free shipping and easy in-store returns,” Rick Gomez, chief marketing and digital officer, said. He explained that key curated product with best-in-class specialty and national brands will help guests both save and get more done in one stop at Target.com.

Target + follows on the expansion of Target Circle earlier this month. Target Circle is a loyalty test that combines surprises, community giving and personalized perks, such as earning 1 percent on every shopping trip, which is redeemable for later use. The personalized perks include special surprises and savings tailored for each “guest,” so a customer who regularly shops the baby section should expect to find an offer to save on the next purchase for the little one. Guests can also save 50 percent off a first-year membership with Shipt, the same-day delivery service, and receive free next-day delivery on essentials through Restock.

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The first test was in Dallas-Forth Worth, which resulted in millions of transactions and nearly $250,000 in guest-directed local giving, Target said. The discounter last week expanded the test to shoppers in Charlotte, Denver, Indianapolis, Kansas City and Phoenix.

According to Gomez, a trip to Target is about more than “checking items off your list–it’s about discovery, inspiration and an effortlessly joyful shopping experience.” He said the discounter is building deeper relationships with its shoppers in a personalized way that encourages everyone to “choose Target again and again.”

The discounter also introduced three new private label brands–Auden, Stars Above and Colsie, with price points ranging from $4.99 to $29.99. Auden is a collection of bras and underwear, with nearly 200 bras in more than 40 styles and a size range from 32 AA to 46G. Price points are all for under $22. Stars Above is the new lounge and sleepwear line for women. Colsie is the new intimates and loungewear aimed at teens and young adults. The size range is extra small to 3X.

Target made all three of the new labels size inclusive and said its design team spoke with hundreds of real women of “all ages, shapes and sizes” and even hosted fit tests to get the right fit for the assortment. The lines will be available at stores and at Target.com next month.

The third-quarter miss in November had investors worried about higher supply chain costs due to digital fulfillment costs and holiday inventory receipts. But the company also boosted some convenience options to help make it easier for consumers to shop during the holiday season on their terms, such as its same-day and next-day delivery options. Target also took advantage of the Toys ‘R’ Us liquidation by adding more square footage for its toy shop. The company had already been growing its base of private label brands, such as apparel brand A New Day and kids’ apparel label, Cat & Jack. Both lines have hit the $1 billion club in sales. Other lines include Goodfellow & Co. for men and Wild Fable for women. The new labels are aimed at attracting the millennial consumer base.

The investments in digital seemed to have paid off for the discounter. Target said in January that comparable sales for stores during November and December rose 5.7 percent, with overall fourth quarter comps gaining 5 percent. Digital sales rose 29 percent during the eight-week holiday selling season.

“Target’s success is a result of multiple years of investments and transition efforts…,”Joseph Feldman, broadlines analyst at Telsey Advisory Group, said. “In our view, Target is making significant progress on its strategic transformation–price investment in everyday items, differentiating merchandising with private brands, remodeling stores, opening smaller stores and investing in digital and delivery…–which is resonating with consumers…”

The Minneapolis, Minn.-based retailer is slated to report fourth quarter results on March 5.