Inside This Issue - News
Targetís holiday push
October 29th, 2012
NEW YORK – Target Corp. intends to make sure shoppers have plenty of reasons to visit its stores this holiday season, and no reason to go anywhere else.
To that end the company has launched a new price match program that includes key online retailers, as part of a comprehensive holiday push that also includes exclusive merchandise, increased mobile shopping options and a more generous return policy for purchases made with its Target REDcard.
"Target’s holiday plans are built around an outstanding shopping experience, exclusive merchandise and competitive prices," said president and chief executive officer Gregg Steinhafel. "Our guests will be able to shop with confidence this holiday season knowing that we are intensely focused on providing them the right merchandise at the right price."
Perhaps the boldest part of Target’s holiday initiative — which was announced at a media event in New York — is the retailer’s price match guarantee. Between November 1 and December 16, Target will offer to match the prices of online competitors Walmart.com, BestBuy.com, Amazon.com and Toysrus.com.
Also, if a shopper buys a qualifying item at Target between November 1 and December 24, and then finds the same product for less at Target.com or in a local competitor’s printed ad, Target will match that price.
The online part of the price match guarantee is designed to keep shoppers from “showrooming,” or using Target’s stores as showrooms where they can touch and feel products that they then purchase online. Analysts say the move is bold, and possibly also risky.
"In the near term, the tactic should be positive for Target’s fourth quarter sales and earnings per share, as the company presumably will be able to reduce the share loss to e-commerce competitors in the holiday period," William Blair & Co. analyst Mark Miller wrote in a note to investors. "But over the longer term, we believe the company may inadvertently increase the structural risk to the business, as Target effectively will be prompting its customers to do price comparisons with Amazon and other sites in its stores."
Part of Target’s strategy is to tempt holiday shoppers with merchandise for which price comparisons are not an issue, because the products are not available at Target’s rivals.
That includes items from the Target + Neiman Marcus collection of designer goods, which will go on sale on December 1. (Neiman Marcus Group Inc. president and CEO Karen Katz also spoke at the media event.) The line features 52 products by 24 designers, and includes such exclusive items as a Tory Burch lunch box for $19.99, a Thom Browne women’s blazer for $129.99 and a Derek Lam skateboard for $99.99.
To promote the line, Target and Neiman Marcus are sponsoring the November 11 episode of the popular ABC Sunday night program “Revenge,” incorporating products into the story.
"Neiman Marcus is the absolute gold standard in luxury retail, and the relationships they have with these designers are simply unmatched in the market," said Kathee Tesija, Target’s executive vice president for merchandising and supply chain. "At the same time, Target’s track record for delivering highly successful collaborations with some of the world’s most prominent designers spans more than a decade. This partnership takes our collaboration model to a whole new level. It allows each of us to do what we do best."
Target has other exclusive merchandise lines, including a new collection of home products from Nate Berkus, the author and television host who was a featured design expert on the Oprah Winfrey Show. Berkus’ line, which just debuted, is a travel-inspired collection that spans bedding, bath and home décor.
Target is also introducing an exclusive holiday gift collection featuring more than 850 products in a wide range of categories. The collection, available beginning November 4, includes everything from iPhone cases to sweaters and scarves, with prices that range from $2 to $50.
Target is adding digital shopping options to its stores as well as to its holiday ads. The retailer is adding free Wi-Fi in all of its stores, and plans to display QR codes alongside the 20 hottest toys of the season. Shoppers can simply scan the codes with their smartphones to buy the toys and have them shipped for free to anyone in the United States.
Consumers can also use their smartphones to shop from Target’s television commercials, by scanning a QR code or sending a text. They can also shop from bus shelter ads and catalog pages.
Target also used its media event to announce some new store plans. The retailer, which on October 10 opened its first store — a CityTarget — in San Francisco, has announced plans to add a second CityTarget in the city next October. New CityTarget stores are also set to open next year in Los Angeles (already home to two of the outlets) and Portland, Ore.
Target has not yet brought its CityTarget format to New York, but it has announced plans for another full-size store in the city. Target says it will open a new store on Staten Island in July 2013.
“New York continues to be a strong market for Target, and we’re excited to expand our presence there in 2013,” said Samir Shah, senior vice president of stores for the Eastern region.
The new outlet will measure 150,000 square feet in size, and will feature a selection of fresh produce, fresh packaged meat and prepackaged baked goods.
"We began planning and testing our expanded food assortment before the Great Recession, with the objective of helping guests check more off their weekly shopping lists," Steinhafel said. "But this initiative turned out to be a perfect solution for our guests and our business during a uniquely challenging time."
Nearly three-quarters of Target’s general merchandise stores will be renovated to include such expanded food offerings by year end, Steinhafel added.