HOW TARGET IS PLANNING TO WIN THE HOLIDAY SEASON

Having delivered a more challenging performance last quarter, we look at Target’s plans to drive growth through the holiday season with a mix of new products, a new in-store experience and price and promotional activity.

Intensifying competition as holiday season approaches

Although Target had been delivering an improved performance over the last two years, comparable store sales fell by 1.1% during its latest reported quarter, primarily because of an intensifying competitive environment. Walmart has been more aggressive on price, launching an investment program of several billion dollars, and as ever, will be a formidable competitor through the holiday season. Against this backdrop the retailer is planning a multi-faceted approach designed to inspire shoppers and deliver on value on convenience.

Focusing on newness to drive the customer experience

A key element of the retailer’s plans is ‘Wondershop’, a shop-within-a-shop concept where shoppers will find products for Christmas tree decorating; both in-store and online, Target will offer a curated range of 2,000 new seasonal items. Alongside these items, the retailer will also offer more than 1,800 new or exclusive toys, a 15% increase on last year, while its recently introduced clothing and footwear brand for kids, Cat & Jack, has grown to almost 1,000 items. Newly released virtual reality products including PlayStation VR and VR One Plus, and connected home products including Google Home are also expected to be popular.

To support this abundance of newness, the retailer is also introducing ‘Wonderlist’, a selection of 400 edited gift ideas, customisable by recipient personality type and interests. This is aimed at making it easy for shoppers to find personal and creative gifts.

Maintaining its reputation for marketing innovation

With a rich heritage for marketing innovation, Target’s campaign to support this is based on the “spectacular” theme and storytelling. The centrepiece of the campaign is a Broadway-style production called The Toycracker, the retailer’s modern interpretation of The Nutcracker. Featuring John Legend and Chrissy Teigen, The Nutcracker will see many of Target’s toys come to life through computer animated generation. The eight-minute musical will air in two four-minute segments in a prime-time slot during the network broadcast premiere of Disney’s Frozen, and will be supported in the lead-up to this with several shorter broadcast spots. Shoppers can expect to see the theatrical production woven throughout elements including in-store displays, digital and on Target.com.

Intensifying competition as holiday season approaches

However, given the trading environment, Target’s refocusing on pricing and promotions is likely to be the most critical element of its holiday plans. New this year, beginning in mid-November, shoppers will save $10 off a $50 purchase on a different product category each week, while in December, the promotion will expand to allow shoppers the option to save $25 on purchases of $100 or more. Popular promotions from last year will also return, including 10 Days of Deals, which will feature a distinct offer each day for 10 days. 

Cartwheel, Target’s digital savings app, will also offer a range of promotions while shoppers will also benefit from free shipping for online orders and an extended Price Match Guarantee. These initiatives should support the retailer in emphasising the ‘Pay Less’ element of its brand promise, an area which has had less focus over the last two years.