Can Target continue to succeed by ticking off its customers?
Target has a new designer line partnership. This time it comes in the form of swimwear and home décor items from the Finnish brand Marimekko. As in past deals with Missoni and Lilly Pulitzer, Target is expecting to sell out of the limited edition run quickly. Customers, experience tells us, will come up empty handed and find items being resold on eBay at a premium. While this may seem like bad news for the chain’s customers, it may be great news for Target as it continues its efforts to reclaim its “TarJay” mojo.
Marimekko for Target will be available in the chain’s stores and online on April 17. The line, according to a Target press release, “features more than 200 playful, print-centric pieces that span outdoor décor, furniture and entertaining essentials, as well as beach and swimwear for women and girls. Standout items include the paddle board, inflatables, hammocks and swimsuits.”
The majority of the items in the Marimekko for Target line are under $50, with prices ranging from under $10 for sunscreen to $499.99 for a paddleboard.
A headline on the Refinery29 website claims that the new line represents the best collaboration ever for Target. According to the article by Angela Tafoya, “no one even comes close” to Marimekko when it comes to prints. The company was originally founded with the goal of bringing brightness back into the lives of people who suffered during World War II.
Last year, Target saw its website go down for 20 minutes due to high demand for items from its limited edition line from Lilly Pulitzer. Stores quickly sold out their stock and some 26,000 items from the line eventually showed up on eBay.
- Marimekko for Target
- Target Announces New Design Partnership with Marimekko: It’s Finish. Target Style – Target Corporation
- Stop What You’re Doing & See Target’s Best Collab Ever – Refinery29
- Target Preps Marimekko Launch, But ‘Won’t Apologize’ For Potential ‘Sold Out’ Signs – Forbes
- Ticking off ‘guests’ is a good thing for Target – RetailWire
Discussion Questions
DISCUSSION QUESTIONS:
Do you see Target’s limited edition designer collaborations coming back to bite the retailer? Are they an overall plus or minus for the chain? Would Target benefit by offering more collaborations of this type or does it have the frequency about right?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Liz Crawford
VP Planning, TPN Retail
The designer collaborations may be good for Target’s brand cachet, but in the long run they have only reinforced the chain’s reputation for poor supply chain management. I fully understand retailers’ desire to buy “too little” instead of “too much” — but the coming feeding frenzy (in-store and online) is not going to please the very customers for updated apparel that Target is trying to draw back to the store on a consistent basis — not just once a year.
Is it any wonder that Target felt compelled to hire away a supply chain executive from Amazon? Will he be able to manage these types of events in the future, in order to sell out in a week instead of an hour? (And bringing the website to a crashing halt … ) It requires a commitment to a different mindset on the part of Target’s senior management.
Because so few people actually get to buy them, I don’t see a plus or minus for Target. But the company is still leaving a lot of real money on the table. That can’t be a plus.
I don’t understand (really!) why the company doesn’t use a better forecast engine so that they can stay in stock for at least … oh, I don’t know, three hours, maybe?
The air of exclusivity is fine, I suppose. The statement this time, that the company “won’t apologize when the merchandise sells out” is a bit lame. But net/net, people seem to keep coming back for more.
I just really don’t understand the logic in under-buying so badly. Ever.
Target’s limited edition designer collections benefit and bite the retailer. They reinforce Target’s fashion forward image and they frustrate consumers. As long as consumers are willing to flock to Target for this merchandise the retailer has little incentive to change its ways, regardless of the tick-off factor. The moment consumers stop playing the game, Target will be in trouble. Target’s management is walking a fine line.
I think Target’s designer collaborations reinforce the image of a retailer that is at the forefront of fashion which makes its shoppers trendsetters as well. So far it seems the frequency is about right, providing a jolt to awareness every so often. But potential sales are tied to the limited number of items available. Target is depending on the boost to its image and enhanced brand (Target) awareness for other sales and shopper visits online and in the stores. A review of immediate revenue spikes and longer term sales identify the financial benefits for Target.
By the way, Marimekko benefits as well. I recently went to an Isaac Mizrahi exhibit that included his Target designs. His collaboration with the retailer brought his brand further into the main stream as well as benefiting Target.
As for the resale of product, I think concert and theater ticket re-sales have made us immune to individuals benefited by early purchases that have value beyond the ticketed price. Or maybe it was the resale of Beanie Babies that made me more tolerant, albeit frustrated.
Yes. Target clearly has inventory anticipation issues, consumer understanding issues and electronic security concerns. In today’s world, how can any major company not have the capability to handle increased orders online? We will see if Target has learned from its mistakes from last year when it ramps up this limited designer edition sale again. This type of introduction is a true test of Target’s capabilities and abilities to communicate and manage their customer’s needs.
Overall this is a benefit for the chain. It provides a buzz and treasure hunt for these items. It’s more of a marketing event vs. a sale based on the limited inventory. Eventually the customer behavior will determine whether the frequency is right. I think Target may have to provide a set of loyal customers early access to avoid customer disappointment.
It’s a shame that they had such problems in the past, but I can’t imagine that they haven’t learned from it and are now better prepared for the frenzy.
Gamification is alive and well within retail and exclusives like this are a huge draw to get people in the game. If you snooze you lose as they say and hats off to Target for continually keeping their products fresh with items that are lustworthy enough to cause such a crisis. I’ll be marking my calendar for April 17th!
To me, the interesting part here is Target teaming up with Marimekko. This brand is practically a relic from the 1970s. It almost seems that Target is trying to help the brand regain its standing in the U.S.
But beyond this, the shopper who would value Marimekko is a bit older — a Baby Boomer. Perhaps Target is trying to introduce the brand to a new generation, one that relishes retro designs. However the “retro cool” looks aren’t usually from the original brands themselves, but from brands imitating the era.
Bottom line: In this particular case, I don’t believe that too many shoppers will be “ticked off” because there won’t be a rush on the goods.
Risk and reward. Nieman Marcus (needless markup) and Lily Pulitzer/Missoni or Phillip Lim.
Richard Graves was a permanent/evergreen partnership. The apparel/fashion partnerships are seasonal/fleeting. They keep the brand fashion POV fresh and that is crucial to brand Target.
However they need to better manage customer expectations to protect the brand image when demand far exceeds supply.
It is why we say, “retail ain’t for sissies!”
It is a slight conflict for Target, which is a convenience retailer looking to offer style at a low price.
The collaborations are taking a page out of the Jordan/Yeezy/Supreme playbook — create periodic and huge demand events for limited edition products at regular prices and then the secondary and tertiary markets for the items pushes up the pricing due to pent up demand. This second life of collectible products does all the brand marketing for you that the in-store release might have missed.
Target obviously thinks that these partnerships are a net plus, but customers will tell the story differently.
These items will sell out online almost immediately and a few of the more-expensive items will be left in stores, but in impossible sizes. Where, exactly, is the value in this for customers?
What’s especially baffling is that Target knows how many of a given item will sell. They have chosen, instead, to frustrate the customer base. Annoying.
Target is fine. They are working with the tools they have to stay one mindstep or idea ahead of their shoppers. They are creating demand and lifting their name. But press people are in need of something exciting to talk about in retail — so let’s beat on Target, eh?
The only reason that this pre-launch abuse happens is the dang social simplicity our country and many industries have fallen into. Target is making a smart move and not making these releases too often. Sure they had trouble in the past but last time I looked yesterday is gone. Get off it.
Target will do well. They have a strong game plan and many shoppers will be ecstatic.
Social — the destruction of reality.
“Target” is the appropriate name for this company, all right, since (lately) they always seem to be sending out shots, hoping to hit something. Will they have found their mark this time? I don’t know, but creating scarcity will only create demand if the underlying product actually interests people … I fear “Tar-zhay” may be several fast-fashion competitors behind the curve.
Now you see it, oops now you don’t. Oh, by the way, if you still want it, go on eBay for far more than what you would have paid us for it. This is something that likely has a lot of appeal to those you make money as resellers on eBay, but has to be getting old for Target shoppers.
It’s one thing to create demand and another to fulfill on the promise. Limited quantity offers push the envelop of being able to satisfy demand. It will be interesting to see the social fall-out from this program as well as Target’s ability to keep its online store open.
I think it reinforces the Target brand overall to keep it in the limelight from a fashionista perspective. Are they leaving money on the table by being out of stock? Yes, but it is all about getting mindshare. The website crashing should be addressed since that does affect other business, but stampeded stores for the new collection is not a problem for the retailer. Target will continue these collaborations until it runs out of steam and consumers will determine when it is time to stop.
I think Target learned a lot from the Lilly Pulitzer outcome. I hope that their site can handle much more traffic this time around. They’re building a sense of exclusivity around these collaborations, so “sold out” is bound to happen. After all, if everyone has one, is it really an exclusive limited edition item?
The frequency will be a big part of the success or failure of these collaborations. Shoppers have to feel like they have a chance of scoring the merchandise and have a chance at the next one if they miss out. Maybe Target should have a re-release if demand is astronomical. Think about concerts: if the first sells out in mere minutes, venues often add a second show to make the most out of the demand. This wouldn’t harm the exclusive nature of the collaborations, but it could make shoppers happier.
This tactic is wearing thin, given Target’s ability to negotiate for more product to actually be closer to filling demand. Shoppers will rush in there, to be sure, but how many will end up complaining on social media when they leave empty-handed?
Fashion is about limiting demand to a degree, but the obvious play on too few goods is going to backfire in today’s marketplace.
I don’t understand why Target can’t carry more to fulfill the demand. I don’t understand why Target’s site has to crash when they know there will be demand and overload.
More collaborations are in order, they’re successful, but Target doesn’t have to be so stingy. Everyone will benefit more in the long run if it exercises these principles.
I see this entire limited events strategy as adding some intrigue to Target. They are creating a memorable event — hasn’t that always been a critical component of fashion? The events are few, have short life spans, high demand, good social buzz (sorry, Tom), and the lucky get to participate in this round. There is always next year, next product, next designer so get ready and get enthused. They need more of this type of thinking else they become just another blah discount store.
I see upside in creating buzz and excitement around new fashion offerings at Target. Stimulating higher demand by limiting quantity is an old trick.
I would register concern at the management level for any strategy that creates discord or dissatisfaction among the customer group. At the same time, that noise has to be interpreted carefully to understand and assess true risk to the chain.
It would be interesting to know how sentiment ranges across the customer base segmented by value. What type of customer responds best to this type of promotion? Are they regulars with repeat visits, are they new customers who came to Target because of the designer collaboration, and what is the annual sales value of these different groups.
While the PR and social impact is being assessed, I think the quantitative assessment would go a long way to rationalizing future business decisions.