Target is the early star of Christmas – online


On Target’s third-quarter earnings call last month, CEO Brian Cornell expressed optimism about the retailer’s prospects for the holidays. Wall Street, however, was not impressed with the chain’s raised forecast which was not as high as analysts expected. Based on early results, however, it appears Mr. Cornell may have taken an under-promise and over-deliver approach in his remarks on the call that day.
According to data pulled from Slice Intelligence’s panel of over five million consumers, Target’s online sales grew 39 percent on Black Friday and 76 percent on Cyber Monday vs. the same days last year.
“Target offered aggressive price points on key items during Cyber Week 2017 and compounded that with an additional 15 percent discount across all of target.com during Cyber Monday,” Ken Cassar, vice president, principal analyst, at Slice, told RetailWire.
The retailer’s online sales represented a 44 percent increase over Cyber Week 2016, said Mr. Cassar. Target.com’s growth outpaced both Amazon.com and Walmart.com
Target’s online sales grew 24 percent during the third quarter and now account for 4.3 percent of the retailer’s total, up from 3.5 percent last year. The chain has also pursued greater integration with its physical store operations with in-store pickup and returns. Today, 1,400 of Target’s 1,800 stores are set up to fulfill online orders.
A key element of Target’s holiday marketing effort are eight new retailer-owned and exclusive brands across key categories including baby, kids, men’s and women’s apparel, accessories and home.
Last month, Target launched Hearth & Hand with Magnolia, an exclusive label co-designed with Chip and Joanna Gaines, which features 300 giftables, home décor and tabletop items. Most of the line is priced at under $30.
Mark Tritton, chief merchandising officer for Target, said the launch of Hearth & Hand “set the perfect tone for the holidays.” Before the Nov. 5 launch of the line, Mr. Tritton said, “Guests were shopping online in the early hours and lining up outside our stores across the country. And based on early demand, we’re implementing our inventory contingency plans to quickly replenish items that are already selling through.”
Target, which has struggled with its menswear sales in the past, appears to have found something with its Goodfellow & Co. label. Bloomberg reports the fashion is on par with H&M, and sales of the line are up 10 percent over Target’s previous offerings.
- Target posts big gains as Black Friday crowds converge online – The Brief Blog/Slice Intelligence
- Target Q3 2017 Results (Earnings Call Transcript) – Seeking Alpha
- Target has a plan to end the Christmas sales madness – RetailWire
- Target Lures Guys to Its Stores With Beer and Beard Wax – Bloomberg
- Target’s holiday forecast disappoints, sending shares lower – CNBC
DISCUSSION QUESTIONS: Does Target have the right marketing, merchandising and operational plan in place to make significant gains this holiday season and beyond? What are the biggest challenges it faces?
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7 Comments on "Target is the early star of Christmas – online"
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Chief Executive Officer, The TSi Company
Target continues to do a lot of things right. Unlike other retailers who think business will come back on its own, Target — like Walmart — has continued to experiment with innovative ideas and concepts. As a result, their business is doing better than many other retailers. What I like about Target is they’re not afraid to make changes if something is not working. That is how they will maintain success. Also, they brought their stores together with buy online pick up in-store which is smart because that gets customers visiting their locations. Their online business even with the recent growth is still a small percentage of their overall sales, so it’s essential that they don’t lose focus on their stores and they have not.
Managing Director, GlobalData
President, Max Goldberg & Associates
At last, Target seems to be moving in the right direction. Still, it has a long way to go to catch Walmart and Amazon. To continue growth, Target needs to emphasize its store brands and prove that they are worthy in terms of style and quality, provide better customer service in stores and limit out-of-stocks. Online, free shipping has helped Target compete with Amazon, but Target’s website still lags Amazon and Walmart in search capabilities, and its SEO on Google frequently brings e-shoppers to pages that don’t carry the desired product.
Founder and CEO, CrunchGrowth Revenue Acceleration Agency
I have always loved Target’s approach to developing modern stylistic controlled brands. This sets them apart and provides a unique reason for shoppers to frequent their stores. Certainly, the Magnolia association is timely.
Target has focused on the correct categories with their new brands for the holidays. This should lead to a great holiday selling season.
The challenge they face is price competition from larger brands who are deeply discounting to grab sales and customers. Another challenge for all retailers is the Amazon effect during the holidays.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
While in the past I would always bet on Walmart and never bet on Target, it seems they may be losing that silver bullet mentality. If so, BRAVO. All the bright spots for the holiday season will revolve around retailers that wholeheartedly integrate the omnichannel philosophy.
The only real growth retailers will see this holiday season will be online. Even if it represents as little as 5 percent of total revenue, if it is growing at 40 percent that adds a 2 percent increase to the total which is more than the other 95 percent will bring in.
CFO, Weisner Steel
“Early” is certainly the key word in George’s headline … as the key phrase in the article is “under-promise.” And once again, if we’re going to preach omnichannel let’s practice it: who should care that the small proportion of online sales became somewhat less so if overall sales don’t grow?
Those gripes out of the way, I’m sure everyone, save perhaps their competitors, wants them to get their mojo back. And that mojo came from a simple formula: better-than-average merchandise presented well and sold at lower-than-average (or at least no more than average) prices. If they can do that again, without the distracting screw-ups of security breaches, ill-planned expansions, and what-not, then I think they’ll do OK. But I’ll wait ’til year’s end to see.