Retailer Targets Home Furnishings for Growth
By George Anderson
Target has mailed and distributed 13 million plus copies of its Home Catalog as the retailer emphasizes its furniture and home furnishing options. The 52-page catalog is also viewable online at target.com.
According to a report on the DMNews.com, Target Stores president Gregg Steinhafel said the decision to launch the catalog was made “to reinforce our new positioning” as a destination for consumers looking to purchase furniture and other items for the home.
The catalog is intended to drive orders in stores or via the Web. According to DM News, shoppers are being given the incentive of free shipping on select items from the catalog through May 28. Target is also using email promotions to reach registered shoppers of the site.
The catalog promotes designer lines including Target exclusives such as Isaac Mizrahi Home, Michael Graves and Swell by Cynthia Rowley & Ilene Rosenzweig. Brand names including Fieldcrest, Woolrich and California Closets are also included in the catalog, which contains items priced from $1.99 to $299.99.
Moderator’s Comment: What is prompting Target’s recent emphasis on home furnishings? What does it mean within the larger competitive marketplace?
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George Anderson – Moderator
Home furnishings is one area where a mass retailer just isn’t going to be able to present coordinated looks properly (furniture with accessories) in the store environment. Smart move for Target and a great way to show off their home brands and perhaps expand on their Global Bazaar concept. Speaking of Global Bazaar … this themed-by-region home decor section was a direct hit at Pier 1 and Cost Plus. The new catalog could further that goal and fill the gaps still left by Ikea’s slow expansion.
Nice move by Target to drive hard in an area where Wal-Mart is less well-positioned. The company does nicely in home decor categories and has built a reputation as a place where style costs less. This is territory where Wal-Mart will have to work to catch up – and it will take some brand-redefinition to do so.
Also worth highlighting here is Target’s multi-channel approach for this catalog. As the article mentions, it directs customers to the Web site or the store – no order form is provided. This was bound to happen eventually: the Web site becomes the ordering front end for the catalog; the catalog functions as showcase and awareness-builder for the store assortment; each channel contributes what it does best.
Home furnishings are considered a high leverage area. From a market basket point of view, “owning” home furnishings translates into considerable volume in other areas. Target has access the CRM data which indicates that strategically, being a destination retailer in this area will support growth objectives in other (often seemingly unrelated) product categories.
From an image or brand positioning standpoint, home furnishings ranks along with apparel as both a source of customer experience and an opportunity to reinforce a desired customer image. And, frankly, executing fashion and lifestyle positioning is easier in home than it is in apparel.
Target is demonstrating superior insight and strategic management. My guess is that the mailing is a strategic investment, irrespective of an specific ROI. The product has been improved, the lifestyle-equity has been borrowed (with designer branding) and now the customer needs to be enticed to experience.
It will be exciting to see the extent to which Target continues to execute what is clearly a highly detailed, multi-task strategic plan. Let’s watch the sell through and in-stock experience, the markdowns (inevitable)and adjustments, and the (one hopes) continued expansion of this lifestyle positioning throughout the store.