Target asks vendors to take it to another level
Earlier this year, many of Target’s large CPG suppliers had reasons to be nervous. The retailer made clear its plan to differentiate by offering more product choices in areas such as organics and gluten-free. This could mean lost shelf space and/or promotional opportunities for some. While all of that may still be true, Target’s latest message is that the company will need cooperation and collaboration from all its suppliers to achieve its goals.
Speaking at the retailer’s annual vendors summit, as reported by the Star Tribune, Target CEO Brian Cornell acknowledged that the chain’s focus on signature categories (Baby, Kids, Style and Wellness) could be creating a sense of unease among certain suppliers.
The wellness component is particularly critical in grocery. Back in March, Mr. Cornell told analysts that grocery represented more than 20 percent of Target’s sales and food tied closely to the chain’s focus on wellness. This week he told vendors, "There’s a simple truth: this wellness movement is incredibly important to our guest. It’s a really big space. … It’s growing faster than just about anything else."
Among the areas in which Target is seeking to work with suppliers is the launch of new, exclusive products.
Brian Cornell, Board Chairman and CEO, Target – Photo: Target
Target also indicated that it is moving forward on a number digital initiatives including a test of grocery delivery, an expansion of its curbside pickup pilot, and improvements to the company’s website that will, among other things, allow customers to see product inventory levels by store location.
- Target execs ask suppliers to embrace changes in stores and online – Minneapolis Star Tribune (tiered sub.)
- Target may remove big food from store shelves – RetailWire
- Will Target’s new grocery boss get the job done? – RetailWire
What type of effort will Target need to put forth on its end to get the level of cooperation and collaboration it is seeking from vendors? What do you expect will be the reaction of CPG suppliers that have space and/or promotions cut as a result of Target’s shifting priorities?