BoF is pleased to announce Target as the principal partner of the #BoF500 2017, the definitive professional index of the people shaping the global fashion industry.
MINNEAPOLIS, United States — With previous partners including Proenza Schouler, Jason Wu, Missoni and Victoria Beckham, Target was the American pioneer of the mass-retailer-high-fashion collaboration strategy now so popular across the global industry. It’s no wonder the retailer has earned the affectionate faux-French nickname “Tar-zhay” — it alludes to a certain European sophistication, and is evidence of the US retail giant’s fashion credibility among consumers. Of course, this reputation is not just thanks to high-fashion partnerships. Design has been an integral part of the Target DNA since it was founded in 1962, when Donald C. Dayton promised a store that would “combine the best of the fashion world with the best of the discount world.”
With over 30 million shoppers entering its stores every week — and a further 55 million digital visitors each week — Target is one of America’s most accessible and established retailers. Originally founded as a dry goods store in 1902 named Dayton’s, the business evolved from a family-run Minneapolis department store chain into a multi-channel, international organisation with more than 320,000 team members, 1,800 stores and revenues of $69.5 billion in 2016, of which nearly 40 percent stems from fashion and homeware.
It was Douglas J. Dayton, the grandson of Dayton Dry Goods founder George Draper Dayton, who observed how his customers consistently gravitated towards the markdown areas of his stores. In 1960 he conceived of a new opportunity: targeting value-focused customers through a higher-quality discount shopping experience. Over the ensuing decades, Target drove its nationwide expansion by continuing to identify emerging consumer preferences and being first to cater to them, distinguishing itself from other value-focused retailers by embedding design deep into its identity. The company’s translation of contemporary trends built a strong affinity with a broad base of consumers.
As the retail environment continues to evolve, Target must navigate a commercial landscape transformed by digital technology and globalisation. The company’s first response to increased competition from direct-to-consumer brands and international entrants to the American market was a “360-degree deep dive” into its product offering and retail strategy. Now, Target is investing $7 billion across its business, which, among other initiatives, will see the launch of more than 12 new brands spanning menswear, womenswear, maternity and home labels, each designed to cater to its existing consumer base as well as up-and-coming shoppers.
BoF sits down with Mark Tritton, Target’s executive vice president and chief merchandising officer, to hear how the strategy is taking shape and how Target plans to deepen its emotional connection with consumers.
BoF: What prompted Target to adopt its new brand strategy?
Mark Tritton: The industry has changed dramatically. Retail has changed and our guests’ (as we call our customers) shopping behaviours have changed. What guests need and what value means to them today has evolved. We are adapting and to do so we’ve conducted deep research to build a plan to not only sustain Target for the future, but to thrive.
Target is a brand built on data and emotion. Guests talk openly about their love for the Target brand and we want to translate that love not just into the experience they have, but also to their connections to our brands. We’re building our new brands, each with unique personalities and strong values, which we know from data insights and previous successes are going to connect with guests.
BoF: How did you test the strategy?
MT: Last year we launched a new childrenswear brand, Cat & Jack, and have been closely monitoring our guests’ reactions. In its first full year this brand surpassed the $2 billion mark, which is a testament to how we amplified our offer online and complemented that in store, as well as how we reached our guests. That pre-emptive strike worked incredibly well for us, gaining Target market share in kidswear and growing our overall business. Customers also spent more than 20 percent more across the store.
What I really love about what we’ve done with Cat & Jack and what we’re doing with our new brands is combining the power of our incredible creative and design teams with data to create the new, modern Target. We know a lot about our guests but we don’t take anything for granted. It is not a “build it and they will come.” It’s “let us invest in all the right places and ensure that we are leveraging all of our learnings to create something truly differentiated.”
BoF: Can you give a specific brand example?
MT: Our new menswear line Goodfellow & Co. is a great example. When we were assessing our full brand portfolio we saw an opportunity to reimagine what we were offering our male guests. We were very reliant on a lot of basics like underwear and socks, which is great, but we realised that we lacked strong style options that gave men a truly outstanding Target experience. So we built the brand around the guest insights that our male guest responds to a great fit and shops by hand: how the fabric feels. Then on top of that foundation we layered the physical and digital experience to build a true vertical in a way that only Target can.
BoF: How will you translate the existing Target brand into the new product offering?
MT: Target has been entrepreneurial in putting the “Tar-zhay” in Target throughout our history — through both our owned brands and designer collaborations — which has built strong brand equity. Our guest is more than just an algorithm, so we have to mix data and emotion to make a true connection. We not only think about the product design — which is great, by the way — but also how we connect with guests, from advertising to social media to physical experience in store or online. With regards to new guests, when we looked at the emerging Gen-Z and Millennial base, we looked not just at what they need today, but what they will need in the future, and developed product that will stand the test of time. Project 62 is a great example of how we’re reimagining our assortment to reach both our younger and most established guests. It’s designed for smaller spaces, where furniture is just as important as aesthetics.
BoF: How will you drive engagement?
MT: We are going to have a fantastic presence online with our presentation of the brands. We have [integrated] social media feeds into our website to show what real consumers are actually doing with this product. We want to meet our guests where they are. They want to shop online? Target.com has an easy and inspirational experience. If they want to shop in stores, we’ve created a joyful and engaging environment. Additionally, we are investing in what we believe will be really powerful TV and marketing campaigns, and PR.
We really have touched every stone from the ideation to the creation and execution — they have all been rethought and completely. We are moving beyond label-esque behaviour to true brand behaviour. We have a menu of brands to work with now, and whether it is the agility with which we are moving to inject newness into stores, or our ability to connect with our guests, it is going to be very exciting and very different for all of us.