Cheap chic retailer Target is renowned for brand collaborations good (the Missoni craze) and bad (the Neiman Marcus collection that no one wanted). Target’s new brand partnerships may be the most intriguing of all. Just don’t go looking for them in actual Target stores.
Last week, Target announced the debut of six new online-only brands, sold exclusively at Target.com. The brands include a women’s apparel outfit (Labworks), baby clothing (Zutano Blue), bedding (Room 365), home décor (TOO by Blu Dot), and others focused on stylish, affordable products that are desired in the typical American household. In other words, they all seem to be in Target’s wheelhouse, so to speak.
Blu Dot, a home furnishing goods company created in 1997, is known for smart, minimalist goods that price-wise fall somewhere between IKEA and high-end imports. A Blu Dot coffee table retails for around $500.
Not too many Target shoppers would pay $500 for a coffee table, however. That’s why Blu Dot purposefully created a new TOO by Blu Dot brand specifically for Target. In an interview published at Target’s blog, Blu Dot co-founder John Christakos explained:
We design from the inside out, so it’s not just an aesthetic design exercise. Affordability was such an important aspect to this process, and it’s a real challenge to make a quality coffee table that retails at $149! In the very beginning, you have to think about efficiency in production, packaging, shipping and assembly. It’s a multivariable problem-solving design process, which is the type of design we dig the most.
In a release, Target divisional merchandise manager Theresa Schmidt said that the retailer was of course “excited about these new brands,” especially because they will help differentiate Target’s site from other e-retail options. “We know our guests are increasingly connected and are shopping online more, so we wanted to offer guests something new, unique and unexpected.”
But why online only? Why can’t shoppers also find these new brands in actual Target stores, which remain by far the core part of the company’s business?
The move certainly seems to be part of Target’s ongoing efforts to boost e-commerce traffic and sales. Target has been ratcheting up the campaign to compete better with the world’s largest e-retailer, Amazon, most recently by making an online price-matching policy permanent. If Target.com is the only place to buy a hot new line of infant clothes or home furnishings, the cheap chic retailer’s site cashes in big time because it has no one else to compete with on price.
Still, Best Buy, Toys R Us, and many, many retailers offer “exclusive” brands that only it sells, and they’re offered online and in stores alike. One of the big trends in retail today is the way that stores are trying to present their websites and physical stores as one in the same, with all the same products at the same prices. Failure to present shoppers with a seamless online-brick-and-mortar experience has been known to result in confusion and frustration. So could Target’s online-only brand experiment backfire?
“I cannot imagine online-only items or brands as an ongoing strategy for Target. It doesn’t really make any sense,” Retail Systems Research’s Paula Rosenblum tells Internet Retailer. And yet the move may make sense in another way:
Rosenblum adds that offering brands exclusively online makes more sense for testing new concepts and demand, or for clearing out products that don’t fit in stores.
So perhaps we shouldn’t be looking at Target’s online-exclusive initiative as a bold offensive into the e-retail space as much as it is a cheaper way for the retailer to try out some new lines of merchandise. After all, it’s much less expensive to sell new brands online than it is to ship goods all over the country to Target locations and set up physical displays in stores. Amazon knows this as well as anyone.
If the brands are a big hit, it’d be a big surprise if Target didn’t eventually bring them to physical stores. And if the collaborations don’t make much of a stir, Target will have saved plenty of money by introducing them on an online-only basis.