Amazon’s apparel moves are wearing on Target
These days, into each retailer’s area of business a little Amazon.com must fall. In apparel, the retailer that is finding Amazon to be its most significant competitor isn’t Macy’s or even Walmart — it’s Target.
A survey conducted by Coresight Research found that 30 percent of respondents who had increased spending on clothes on Amazon last year had diverted some of their spending from Target, the Star Tribune reported. The study’s results are in keeping with the fact that there is a big overlap between Amazon Prime members and Target shoppers.
A big part of Amazon’s growing success in apparel has been its private label strategy. The e-tailer has rolled out its private label brands under the radar, making it difficult to know the full count. But as of December 2017, L2 confirmed at least 30 private label clothing/shoe brands owned by Amazon of a total 41 private label brands (with others in spaces such as CPG and electronics).
Target, which has had success in apparel over the years with the release of wildly-popular low-price designer collaborations, is likewise investing heavily in private label brands. Last summer the retailer announced it would launch 12 new private label brands within 18 months, according to Business Insider. This came after reports that Target’s Cat & Jack children’s brand had brought in $2 billion in sales during its first year on the market.
Most recently, the retailer has launched its Universal Thread brand, a lower-price, denim-centered brand for women, and a subscription box for Cat & Jack baby clothing.
Improving its private label apparel assortment hasn’t been the only change Target has made in pursuit of a rebound over the past few years. In 2016 Target began implementing small, flexible-concept stores to better cater to individual urban environments. In 2017 the stores proved twice as productive as traditional Target stores.
Opinions on the success of Target’s turnaround so far have been mixed. The company’s third quarter 2017 earnings report beat analyst expectations, showing a 24 percent increase in online sales and an increase in year-over-year store visits, according to CNBC. On the other hand, analysts noted slim margins and competition from Walmart and Amazon as concerns.
- Amazon’s push into apparel has hurt Target the most, survey finds – Star Tribune
- Ticking off guests is a good thing for Target – RetailWire
- Amazon Has More Private Label Brands Than You Think – L2
- Denim, Apparel, Accessories and More! We’re Introducing Target’s New Owned Brand, Universal Thread – Target
- The Cat & Jack™ Baby Outfit Box – Target
- Why are Target’s small stores much more productive than its big boxes? – RetailWire
- Target’s turnaround is slow moving, but progress takes time – CNBC
DISCUSSION QUESTIONS: How can Target improve its apparel offerings to win back share from Amazon? Even with its apparel success, should Target redeploy its efforts toward other segments in which it operates and worry less about trying to compete with Amazon in apparel?