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Can Target’s ‘Project Trident’ Membership Rival Amazon Prime and Walmart+?
In the ever-evolving retail landscape, there’s a notable development brewing over at Target. It’s reportedly crafting a new paid membership plan, internally referred to as “Project Trident.” This forthcoming initiative represents Target’s endeavor to put up more substantial competition against retail rivals with membership programs like Amazon Prime and Walmart+.
Target is no stranger to customer loyalty programs. Back in 2019, it launched its free loyalty program, Target Circle. Members enjoy access to hundreds of deals and can direct Target’s community support efforts through voting. A key perk is earning 1% rewards for future shopping, although this doesn’t stack with the 5% RedCard discount.
The process for taking advantage of special offers can be a bit convoluted, since you’ll need to save the deals on your account first, then present a barcode or phone number at checkout to apply your discounts on top of the RedCard’s 5%. This can be frustrating if your phone has trouble connecting to the internet, stalling the line as you wait for the app and coupons to load.
Project Trident is predicted to push the boundaries further than Target Circle by offering additional benefits.
It seems like it will be a paid subscription service, according to Bloomberg, which cited unnamed sources familiar with the matter. This puts it more directly in line with Walmart and Amazon’s paid membership plans. Currently, a Walmart+ plan is either $12.95 per month or $98 for a whole year, and an Amazon Prime membership is $14.99 per month or $139 per year in the U.S.
A significant feature of this new membership plan could be the integration of Shipt, Target’s owned grocery delivery business. Consumers might find the convenience of having their groceries delivered to their doorsteps particularly attractive, given the current prevalence of online shopping. The question then is, how will it compare with Amazon Prime? Shipt currently offers same-day delivery provided by in-store shoppers, proving to be a unique advantage.
Currently, there’s no definitive word from Target on the details of Project Trident. The company chose not to respond when asked for clarification. This lack of confirmation adds an element of intrigue and speculation to the discussion of what this new membership program might entail.
The reasoning behind Target’s consideration of a new premium membership plan is possibly linked to its reported decline in revenues. The company has seen a concerning 4.9% drop in comparable sales, as revealed in its most recent earnings report. This suggests a need for Target to diversify its revenue streams and innovate to attract and retain customers.
The conversation becomes particularly thought-provoking when juxtaposing Project Trident with Amazon Prime and Walmart+. These subscription services are well-established in the market, boasting a plethora of advantages for their members, ranging from speedy delivery to exclusive sales access.
Amazon Prime offers extensive benefits, including special discounts, streaming services, and a “Try Before You Buy” clothing service. Walmart+, although newer, includes a Paramount+ subscription and fuel savings.
Additionally, Walmart is currently working on several technological initiatives as part of its “Store of the Future” concept. This includes the creation of digital labels for easier in-store navigation, along with plans to remodel 150 stores over the next five years to create a seamless blend of in-person and online shopping. Furthermore, Amazon is pushing things forward with its AI chat-driven sales assistant.
In light of such robust competition, the success of Target’s paid membership plan hinges on how it differentiates itself from Amazon Prime and Walmart+. This differentiation could be in the form of unique services or exceptional customer experiences. Once launched, will Project Trident possess the competitive edge it needs to challenge them?
Discussion Questions
Considering the competitive landscape of subscription-driven retail services, how might Target’s “Project Trident” disrupt the existing dynamic between Amazon Prime and Walmart+?
As online shopping convenience becomes crucial, could the integration of Shipt into Project Trident redefine expectations for grocery delivery services and challenge Amazon Prime’s dominance?
In the face of declining revenue, could Project Trident serve as a catalyst for diversifying Target’s income stream without alienating its consumer base, and how might this shape the future of retail experiences?
Poll
Loading …BrainTrust
Zach Zalowitz
Founder, Salient Commerce Consulting
Dave Bruno
Director, Retail Market Insights, Aptos
Target has many of the ingredients to make a success of a paid membership program: a regular and loyal base of customers, a broad assortment that drives repeat visits and sales, a brand that people have some genuine affection for, and an existing membership program (Target Circle) that could be adapted or extended.
The big question, however, is what Target would offer to make a paid subscription worthwhile. And this is the critical issue because many households already have subscription fatigue so are unwilling to fork out more money for little in exchange. Offering something like free delivery just isn’t going to cut it in my view, not in terms of making this a really successful venture; it is far too vanilla and it would only appeal to those who already use Target a lot for online orders.
Unfortunately, Target has already set the bar high with the Circle program which offers points that turn into cash that can be spent at the store and various special discounts. Doing something more than this is quite a tall order in financial terms.
Target is right to be thinking about a subscription service, but they have a lot of ground to make up if they intend to compete with Amazon’s Prime – the undisputed loyalty leader with some 200 million members or even Walmart+ with it’s approximately 60 million members. Consumers will spend on subscriptions if there is a clear and compelling value proposition for them. To be successful, Target will need to offer real meaningful savings as well as useful and/or unique services that don’t require members to navigate a gauntlet of rules and procedures. I have no doubt that Target has been working on their membership program for years and they know just how strategically important this will be to their future.
The questions seem borderline frivolous: can Project Trident compete with WalMart and Amazon?? Obviously, since Target already competes against them. So I suspect the real meaning is “is it going to help Target catch-up?” No… that idea is even more frivolous: Target is one of the largest retailers in the country, but it’s not going to become the largest any time soon (if ever). Let’s just evaluate the idea on it’s own merits without silly comparisons.
Target launching a paid subscription program, with softened sales, and competing against well-oiled membership programs at Amazon, Walmart, means differentiation is not only required for success, but also to justify asking customers spend yet another $12-$15/month.
Differentiation for Target must be more than free shipping and discounts. One area they succeeded at for years was having design-forward brands and designs not available at other retailers. A subscription program with the first pick of limited offerings from designer partnerships and celebrity names at a great price is a leadership angle they can carve out and own in the marketplace. Free soft drinks, refills and food might be another enticement to add.
Project Trident may be a hit with current Target loyalists, but I don’t see it going much further. Amazon Prime offers an insight into users’ lifestyles, and Walmart+ isn’t far behind. Notably, Dennis used the word “plethora” to describe Amazon’s and Walmart’s benefits.
If Target has determined that Project Trident is the answer to their sales decline, I think they have looked in the wrong place. I could imagine a scenario where Project Trident costs Target rather than enhances.
Hard to envision what Target would offer that is more compelling than what is already available via Amazon or Walmart subscriptions. Yes, it might appeal to their core, loyal base but to really make an impact it will need to reach much further and pull shoppers away from others.
Target hasn’t disclosed the details of Project Trident. It’s tough to compare competitor programs if there is nothing to compare.
Will Project Trident offer streaming services? Because there are already too many of those available right now to keep up with, and free delivery isn’t really free if you have to pay a monthly fee to get it.
Target is a cool place to shop, but is it worth the additional monthly fee to get perks? We’ll have to wait and see what they are before we can determine if Project Trident will disrupt Amazon Prime or Walmart+.
Precisely.
I’m a very loyal Target shopper: Red Card, Circle, visits usually twice a week. I don’t get grocery delivery because T1 is literally 3 minutes from my house. Anything they offer on a paid program has to allow me to unsubscribe to something else I use frequently of equal or greater cost, like Netflix. And probably give me SkyMiles to boot.
I am hoping they will come up with some imaginative perks. We are overloaded with subscriptions offering basic things – and people are cancelling them to save money!
Target has a very loyal customer base and the new premium subscription offering will appeal to some of their loyal customers. The paid membership program is a smart strategy for Target, but they should have launched this a long time ago. Now it is more difficult to convince customers to join a second or third paid membership program, as many customers are already paying for memberships at Amazon, Costco and Walmart. Adding a second, third or fourth paid membership may be asking too much for Target customers.
I have a feeling we’re just too early to this view of Target’s Trident program, to compare, though logically the program would have three key prongs to it. Despite the enigmatic nature of the program, it is likely Target can convert a good portion of its over 100 million members from its Circle program to paying subscribers with little to no fanfare if the price is low enough. The loyalty program already has coupons and discounts and 1% back as well as a slew of other perks. This means that loyal customers already see a monetary value. As of 2023, 3-4 million users are using the Target mobile app every single day. This is more a question of additional perks, how they fit this with more relevant offers and potentially driving new customers while retaining their loyal customer base. For Target, if done properly, we can see a fixed income stream to supplement their revenues. Something to watch as Target already is head to head with Walmart and Amazon in many categories.
The US has demonstrated a clear preference for spending money in advance for “free” benefits to follow. Why not Target too?
Overload.
Amazon Prime is the absolute gold standard for membership programs. And for my household it pays for itself many times over during the course of the year. Will some other membership program pull me away from Prime? There is a zero percent chance of that happening. So it’s a function of me adding another membership program. And will this new membership program pay for itself many times over during the course of the year? Not unless I change several shopping and buying behaviors and I don’t see that happening. Having said that, this is a move that Target has to make. They have to keep the playing field as level as possible. Sometimes they lead and sometimes they follow. And that’s OK. Prime may be my first choice for shopping from my couch, but Target is still a regular on my circuit.
Have to agree, Jeff. Amazon set the benchmark very high with Prime. No one, including Walmart, has yet managed to vault over it!
I long ago learned not to doubt Target, but in this case, I hope they have every well-thought-out strategy for overcoming subscription fatigue when they ask their shoppers to consider adding another monthly fee to their budget. In addition Walmart and Amazon, Target is also competing with Costco, BJ’s and Sam’s Club membership programs. It’s a crowded space, and differentiated value will be key.
I absolutely think this has the potential to re/engage an already loyal base, and find opportunities to double-down on an already evangelical base. If you think about it, the draw for Prime is largely ‘free delivery’ and the nice-to-have is Prime Video. It’s a logistics + content play, which Target was smart to target. Now that said – this alone isn’t enough, and we’ll see more and more brands switch to this same model Target is doing, so staying out in front of sentiment becomes critical to sustaining whatever value this drives for Target.
We need more details on consumer benefits. Will there be new, exclusive deals? More access to partners like Ulta and Disney for beauty hauls and licensed merchandise? Incentives to try cross-category private labels?
Target’s benefits include more detailed shopper data and recurring revenue streams.
Unfortunately, this latest subscription driven service may be too little & certainly too late. As noted, both Amazon & Walmart continue to innovate & enhance their subscription offerings. Target needs to develop a unique offering if it expects to develop any differential advantage.
Target is making the right decision to develop a more complete and competitive membership program. Success will depend on understanding what would be appealing to their core customers and a unique selling proposition to attract some of the like-minded consumers from their competitors. Additionally, making the program simpler than the combined red card and circle programs may help Target provide a clearer offering.
It will be tough to dislodge consumers from their Amazon shopping habits. From my point of view, Walmart has some advantages to Amazon, but many consumers continue to stay with their same ol’ original membership. Walmart+ is cheaper ($40 annually) provides additional savings (`$40 fuel savings: 10 cents X 400 gallons/yr.), can deliver faster than Amazon for many goods and has a streaming service but Amazon continues to retain customers.
Target will need to find a new formula for their membership to create excitement for core and win over some consumers that have ingrained digital habits with their competition. The competition continues to heat up and I’m looking forward to seeing what happens next.
Well, they are one of the last big box retailers to not have a subscription service. The question here is what will be the value and benefits of the program? I will wait to see the benefits, etc before we can completely evaluate it on its merits.
Consumers should be happy with this since competition is ALWAYS good for the consumer. Whether it is a success or not, who knows, however Target is a premier operator…my money is on the “this will be successful” tile on the board.
“Subscription fatigue” – Neil said it. That’s the uphill fight Target takes on with Trident. (So we think, since the details are slim.)
To prevail, the offering must present clear, exclusive benefits that will motivate shoppers to add Trident to the Amazon Prime, Walmart+ and Costco/Sam’s/BJs subscriptions that most desirable households already have.
Since we don’t yet know what these differentiators will be, it’s hard to handicap. I do believe it won’t be sufficient to simply offer an alternative bundle of services – even if some of them perform slightly better than the incumbents.
Disrupt? No. Take some share in the US market, perhaps. I agree with many of the comments, comes down to three things (1) what unique value does it add, (2) how much more diverse will its product assortment become, (3) fast(er) and flexible delivery.
Re: Q2…We used to call the Target Circle and 5% Red Card holders the “Target Fashionistas” – this is the group that may be enticed by Shipt’s swift and adaptable delivery (assuming its reach is great). I would be concerned at Amazon’s network and ability to deliver near and far, given its established infrastructure.
Re: Q3…Retaining and regaining the loyalty of this segment is a great starting point. But they walk in a space of “direct-to-consumer marketshare wars” … one to watch, and also try – (curious to see if they can win my wife back, who stopped shopping them as we moved away from their trade area). Not sure how much more they can add to baskets, or try to gain net-new baskets to make this a catalyst for diversifying income.
Target’s “Project Trident” faces significant challenges in competing with Amazon Prime and Walmart+. While Target aims to introduce a premium membership plan to boost revenue, the lack of clarity on its benefits may put customers to question its appeal. Unlike Amazon Prime’s extensive perks and Walmart+’s inclusion of additional services like fuel savings, Project Trident’s differentiation remains unclear.
Additionally, the reported revenue decline suggests broader issues beyond the need for a subscription service. Integrating Shipt into Project Trident can offer convenience, but Amazon Prime’s established grocery delivery service poses a formidable challenge. Without clear advantages and amid declining revenue, Project Trident’s success depends on different factors, highlighting the need for Target to refine its strategy for effectively competing in the subscription-driven retail market.