Ticking off ‘guests’ is a good thing for Target

Discussion
Apr 21, 2015

There are a lot of Target customers, AKA guests, who are unhappy with the chain today and the company’s management couldn’t be happier. That’s because unhappy customers mean the chain has gotten some of its "TarJay" magic back after quickly selling out of items from its new limited-edition line from Lilly Pulitzer.

Target’s website went down for 20 minutes on Sunday and pages were slow to process due to high demand for the luxury designer’s mass market line. Stores also reported lines of customers who quickly went through the racks and cleared inventory away. The net result was that many customers who wanted to make a purchase from the 250-item collection were unable to do so.

Frustration at being unable to buy items from the collection led some to go on social media and broadcast their unhappiness with Target. The public grousing — along with some 26,000 items from the Pulitzer line showing up in a search on eBay — were a clear indication that Target had a hit on its hands.

The Lilly Pulitzer experience appears to be a virtual redux of the Missoni for Target launch in 2011, when items from that line were quickly bought up by fashion scalpers and resold at much higher prices on eBay.

Target company spokesperson Joshua Thomas told The Wall Street Journal, "We realize there is an extreme amount of excitement around this collaboration, and we apologize for any disappointment this may have caused our guests."

Disappointing guests, experts say, is a good thing in this case.

"This was a grand slam home run for Target," Marshal Cohen, an analyst with the NPD Group, told the Star Tribune. "Yes, they could have bought more, but what if they did? The fact that you can’t get it makes it that much more coveted. … And it makes consumers say, ‘I’m not going to miss this next time.’"

Is the Lilly Pulitzer for Target line a success, failure or a bit of both for the retailer? What should Target change, if anything, for future designer launches in its stores and online?

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23 Comments on "Ticking off ‘guests’ is a good thing for Target"


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Zel Bianco
Guest
7 years 1 month ago

Selling out is good for publicity, but surely Target could have sold far more before selling out—earning a higher revenue and have slightly fewer (but just as vocal) unhappy shoppers.

Additionally, a website crash for a company as large as Target is unacceptable. Not only did they miss out on Lilly Pulitzer sales but they inconvenienced other customers who were trying to go online to order their groceries. Not a good move for a company trying to compete with Amazon.

Bob Phibbs
Guest
7 years 1 month ago

This continues to be an embarrassment I believe, not a hit. As I wrote back in 2012 in the article How Long Can Target Get Away With It?: “The problem is that when hoarders show up and buy it all at once, it appears that the shopping game is fixed—the house is the only one who wins.”

When the products end up within hours on eBay or other sites marked up because of their scarcity, everyone wins but the customer.

Sorry, the truly great brands build value for their customers, not their marketing agencies who tout being sold out and pissing off customers as being good for business.

Max Goldberg
Guest
7 years 1 month ago

A bit of both. Yes, Target regained some of its fashion cache with the sell-out launch of Lilly Pulitzer. But at the same time this episode reinforced a big Target flaw—constant out-of-stocks. And to add insult to injury, the items quickly found their way onto eBay at significantly higher prices.

The same is true for Target’s website, which has been plagued by problems since it broke away from Amazon. Target was successful in driving consumers to the site, but then offered an unsatisfactory experience.

Target needs to rebuild its image with consumers. In that regard, the Lilly Pulitzer launch was both a blessing and a curse.

Joel Rubinson
Guest
7 years 1 month ago

I think it’s probably a good thing but I would have wanted to analyze social media before committing to an answer. To make it a great thing they should have given those in-store some kind of special insider’s ability to get the out-of-stock items before others (maybe they did—not sure).

Steve Montgomery
Guest
7 years 1 month ago

I understand that scarcity may equal desirability, but allowing some resellers/entrepreneurs/scalpers to empty racks doesn’t seem like a good business practice. Yes, Target got an unbelievable amount of publicly from the event but much of it was about how mad and disappointed customers were.

While it may not have eliminated the problem, I might suggest they should have limited the number of items a customer could buy from the collection so at least those that lined up outside the stores had a decent chance for making a purchase. Not sure how that would be handled online but I assume that it could be if it was found to be something they wanted to accomplish. Yes, there would still be people who would work to cheat the system, but then at least Target could say they tried.

J. Kent Smith
Guest
7 years 1 month ago

Hard to characterize starving customers for product as a success BUT it is encouraging to see Target have hit. Still one gets the sense all is not well while shopping the stores—the execution of the spring programs hasn’t had the dynamic punch of years gone by. One gets the sense that the confidence is lost, that they’re no longer “going deep.” One hopes they get their mojo back, where we can expect bold launches across the store backed by style, inventory and excitement.

Kelly Tackett
Guest
7 years 1 month ago

Target did several things right with this launch. The company picked a designer/brand that already had a dedicated following who likely already shop Target—unlike say Peter Pilotto. The assortment extended beyond apparel into other categories, which Lilly purists are likely to find more appealing from a quality perspective. Target also made some of the apparel available in plus sizes. Target needed a high-profile win in a core category. The scarcity issue and the subsequent publicity certainly accomplished that.

That being said, I doubt the assortment was large enough and the inventory deep enough to truly move the needle in terms of overall sales. Additionally I don’t think we can really judge whether Target has got its groove back from a single designer collaboration. I’ll be convinced when I see a wholesale improvement in merchandising across the store, most specifically including the food aisles.

Did Target limit per-shopper purchase quantities for the collection? It should, if only to make it harder for the profit-seekers to hoard.

Adrian Weidmann
Guest
7 years 1 month ago

Any time a retailer or brand can get 60 to 90 seconds on every news channel across the country because of the overwhelming success of a product or initiative it’s a good thing. The short-term results are invaluable to Target. In the aftermath of the euphoria, the reality of the new online economy threw cold water on the hot topic. Reports quickly emerged that many of the Lilly Pulitzer products that were ravaged off the shelves at Target were now being turned around and sold at inflated prices on eBay and through other online vehicles. Perhaps those scalping limited edition items are following in the footsteps once held only by those scalping sporting event tickets?

Dick Seesel
Guest
7 years 1 month ago

This is the biggest hit (and miss) since the Missoni introduction a few years ago. Yes, it’s good for Target’s brand cachet that they are forming successful alliances with wanted brands. But their feet must be held to the fire as far as poor execution and customer service. In what way is this fundamentally different from the problems that plagued Target when it couldn’t keep shelves full in Canada, or when its website crashed after its Amazon alliance ended?

Dr. Stephen Needel
Guest
7 years 1 month ago

The idea that this is a good thing is “spin” at its worst. Yeah, some people might say, “It will be faster next time” but others, my guess is more of them, will say, “Target screwed me last time, screw them this time.”

David Livingston
Guest
7 years 1 month ago

I had no idea what Lilly Pulitzer was. Target had these really sexy commercials running that were eye catching. Just from the commercials I knew Target was on to something. If they are running out of product, get more. As for future launches for its designer products, don’t change a thing. If it’s not broke, don’t fix it.

Shep Hyken
Guest
7 years 1 month ago

This isn’t like Target was out-of-stock at a store. They literally sold out of every item they had in the luxury offering. In other words, it was a limited offering, and the next time the customers will know it and be ready. I also believe Target will be ready as well with a larger inventory. While there are some consumers who were late to the party, Target should be very happy. And, the success means that they will do more of the same, which will make the consumers happy. Marshal Cohen’s quote at the end of the article sums up it up. The consumer will say, “I’m not going to miss the next time.”

Tim Smith
Guest
7 years 1 month ago

Can’t see this as win due to the items showing up on eBay and the negative social media commentary. The everyday “guest” has another bad experience. Credit card hacks, out-of-stocks and now a website crash on a launch they hyped from which many (it seems like from reports) were shut out.

Cathy Hotka
Guest
7 years 1 month ago

What a bomb. Target basically offered merchandise it had no intention of selling. Is annoying customers really such a hot business move?

Roger Saunders
Guest
7 years 1 month ago
A segment of Target shoppers is there for the “adventure.” Those adventuresses come in all ages and income groups. Based on the Prosper Monthly Consumer survey, Target shoppers are also not so peeved as the headline may state. Sure, the press continues to bring up the issue of the data breach from 18 months ago, and they are quick to tout the closing of Canadian stores, while many of those reporters perhaps have never been to Canada, much less the former Target stores there. Consumers point to high net promoter scores for Target in grocery (+44.6 percent vs. all grocers at +33.8 percent), HBA (+17.7 percent vs. all at 1.4 percent), children’s clothing (+11.5 percent vs. all -21.1 percent). In each of these categories, Target far outdistances their competitors among the discount stores. Target does fall slightly below all competitors for sporting goods, linen and bedding, and women’s clothing on the NPS. At the same time, they outpoint discount stores in each of those merchandising categories. The Pulitzer story put their name in the press.… Read more »
David Zahn
Guest
7 years 1 month ago

How many retailers (J.C. Penney anyone?) would have handed over their first-born child for this “problem”? Sure—it COULD have been better. I see this as a success in that we (and customers, and the media, and competitors, etc.) are talking about Target and how they sold out (this is not like selling out of a CSD—this is fashion, excitement, limited supply, etc.).

I vote for this as a terrific thing for Target.

Li McClelland
Guest
Li McClelland
7 years 1 month ago

Failure. If they were going for cachet and loyalty, Target has messed up. Again. With such a limited assortment and available stock, the firm would have been smart to limit Lily apparel solely to in-store shoppers where they could more easily limit the number of purchases per person and also perhaps get some other additional items into the cart at the same trip.

The resale scalpers do what they do, but they are not the “guests” Target needs for its day to day survival. Many regular every week or every month customers are not happy with Target right now. That’s because most “guests” have figured out what’s going on with the limited edition designer stuff that ends up on eBay.

Kenneth Leung
Guest
7 years 1 month ago

A bit of both. They are perceived to have gotten the brand mojo back in terms of the collaboration. There hasn’t been excitement around the brand and good news for a while.

However, they need to do a better job with grey market buyers in terms of limiting number of item purchased, and crashing the web site is not acceptable given there are people who maybe looking for something OTHER than this collaboration….

Overall, making some waves is what the brand needed, and it worked. Now comes the hard part of profitability and assortment when they are not launching the next collaboration.

Ed Rosenbaum
Guest
7 years 1 month ago

From a sales viewpoint, this was a success. From a PR view, I am not so sure. Obviously this is not the first time Target had a colossal hit. Nor is it the first time the website crashed. They should have been able to foresee this after the last time not so long ago. Maybe they do not learn from their mistakes. Something is not right when the items Target sold at 11 are being resold for far more money at 2.

Peter J. Charness
Guest
7 years 1 month ago

Let’s see from the retailers standpoint, the margin was good, turns were “pretty quick” and the publicity was outstanding for low cost. From the customer standpoint, it helps re establish a “fashion forward” leadership brand and helps set a sense of urgency in terms of buying now. Are customers disappointed that the products sold out before they got to them? Sure. Will they be shopping earlier and more often in the future? Probably.

Kai Clarke
Guest
7 years 1 month ago

It is a bit of both. Target should ensure that their products are in high demand, but not enough that their target markets are upset and they end up losing customers. This is bad for any business, regardless of the reason. Target should avoid repeating this in the future.

Suzanne Rutledge
Guest
Suzanne Rutledge
7 years 1 month ago

Whether you consider the launch a success or failure, Diana Harbour of The Red Dress Boutique was able to take advantage of the sell out for an extra $100K in sales. The CEO and founder of the online boutique was not surprised by the frenzy, but took to Twitter to offer 20% off her clothes, which are brightly-colored and reasonably priced, just like the Lilly for Target line. Kudos to a young, female entrepreneur who capitalized on the disappointment of shoppers and paid attention to her competition by creating opportunity for her own business. She continues to grow her loyal customer base and not frustrate them, as Target did.

Brian Kelly
Guest
7 years 1 month ago

A few months ago, a new CEO and his team promised to restore Target unique relationship with its guests. This was going to happen with programs like Lilly Pullitzer and in order to be more inclusive it would be expanded to include plus sizes.

In this context, Lilly Pullitzer didn’t meet anyone’s expectations. It is a violation of the trust Target hopes to rebuild.

Further, via the official response on “Bullseye View,” CMO Tesija said “shop early and often.” Target sold out within an hour.

Missoni was the beginning of the last brand slide. It is not something to compare this mess to so that feelings might be assuaged.

Despite rearranging the deck chairs, has Target learned?

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