Will ending school charity be an epic branding fail for Target?
In 2010, Target set a goal of donating $1 billion for education by the end of this year. Last month, the retailer celebrated reaching that goal, having donated to schools both inside and out of the U.S. Now, Target says it will end its "Take Charge of Education" program next spring and shift to health and wellness initiatives as the focus of its cause marketing efforts.
The shift in Target’s charitable initiatives is in line with the company’s focus in stores, where it is has identified wellness as one of four "signature" categories in which it intends to make greater investments.
Target’s education program, which first began in 1997, sent one percent of the total purchases charged to REDcards to schools designated by the cardholders. According to the retailer, only 10 percent of those who have a card were participating in the program.
The retailer said that it will continue to donate five percent of its profits to communities once the education program is ended next year.
Source: Target infographic: “What does $1 billion for education look like?”
Amy Koo, an analyst with Kantar Retail, told the Star Tribune that she thinks Target may be making a mistake. The chain’s core customer (young families with kids) is very interested in efforts to support education. Also, Target will be wading into an area of cause marketing that already has many corporate supporters, particularly in the food and drug retailing channels.
- Target will end school charity program, shift giving focus to wellness – Minneapolis Star Tribune (tiered sub.)
- We Did It! Target Gives $1 billion For Education – A Bullseye View
- Target ending $32M ‘Take Charge of Education’ school giving program – Minneapolis/St. Paul Business Journal
- Target may remove big food from store shelves – RetailWire
Discussion Questions
Do you approve of Target’s decision to end contributions to schools and instead direct its cause marketing dollars to health and wellness initiatives? What will Target need to do with its new program to ensure it achieves a unique cause marketing positioning?
Poll
BrainTrust
Zel Bianco
President, founder and CEO Interactive Edge
Ryan Mathews
Founder, CEO, Black Monk Consulting
Target has stated its objectives are health and wellness. It should support them across the store. If this means ending the education initiative, so be it. Both General Mills and Campbell’s have done a far better job than Target in aligning with education. Target needs to be creative in its approach to wellness and not become a me-too player.
This issue is 100 percent agenda driven, which will have the schools angry on their side, and the health and wellness groups happy on their side. Target can do what it chooses to do in regards to donating their funds. As bottom-lines continue to shrink, there is only so much any of us as retailers can do with the amount of funds set aside for donations, and this problem will get worse as online sales grow, taking even more bottom line away from brick-and-mortar stores.
In the old days (yes, I’m getting there) Campbell’s soup used to build huge schoolhouse displays in our store and give us tons of labels for education vouchers for our local schools as incentive. Other cereal companies did likewise, as did a lot of local suppliers. Since the advent of the big box stores the funding has disappeared, as demands for extreme low pricing dried up the resources for the funds we used to receive to help out these causes, and it is not coming back this way ever.
We as retailers must choose who we like to help, and we do the best we can, but the demands for donations have far exceeded our ability to give to everyone, and therein lies the problem which will not go away anytime soon. So in my opinion, every retailer of all sizes must choose who they would like to help and leave it at that, and still you will have many organizations left unhappy as they no longer can get all the funds they want for their own projects.
A stronger move could have been to refocus on health and wellness in schools. Simple programs such as providing healthy breakfasts have been shown to have a wonderful impact on student achievement and this would have been a great way to embrace the health and wellness trend without appearing to abandon education. Target is a well-rounded company that sells a wide variety of products for nearly every part of life — they should emphasize that inter-connectivity.
I know the holiday season starts earlier and earlier every year, but is it time to be discussing A Christmas Carol already? If not, why is Target auditioning for the role of Scrooge?
Taking something away that is critical to your core demographic just isn’t good business. Health and wellness are critical problems in our society but they are being addressed by lots of folks while education is not.
I live in the metropolitan Detroit area. Last week there was a story on the evening news about a young woman who had managed to graduate from high school. She was the first in her family to do so and, apparently, the only person in her neighborhood to achieve this milestone.
What does it say about the need to support schools when the fact that a student has actually graduated from an American high school — and somehow made it to college — gets more airtime as the plight of Syrian refugees because it is a more unusual story?
If Target wanted to fund multiple initiatives it should have done so in parallel, dividing all of the fund-raised dollars evenly until all the tracks hit their goals.
It might be too late to reevaluate this decision but — if so — somebody in Target’s marketing department ought to be sent to the corner wearing a dunce cap.
What we don’t know for sure is the extent to which Target customers are aware of their education initiative. Cause marketing has at least two objectives: supporting well-deserved initiatives and gaining positive brand equity for the marketer.
I assume that Target’s good citizen behavior is related to these goals. Health and wellness seems to have more universal relevance. And it may very well be that the mention of these goals resonates better and creates more awareness.
Those would be good reasons to switch from schools without any serious downside risk. In fact Target may generate more good will with more of its customers and prospects as more of them directly relate to the cause of health and wellness.
Target is right to change their charity program, otherwise it gets stale and makes the receivers dependent. Times change and so should a charity program to keep up the excitement. With any new project a retailer must educate or inform their customers so it can have the desired effect.
The unintended consequences of this change might have been foreseen. Given where Target wants to position itself in the future a considered judgement was made that this is the right move. However, I agree with others who have stated education was a cause that is better aligned with Target’s current customer base.
The focus on health and wellness seems to be connected to the CVS Partnership. This area appears to be more in the wheelhouse of drug retailers. I am sorry that Target isn’t maintaining its support of the arts in schools, which is a natural fit with their equity, as well as a white space in the market.
Companies choose their causes based on that particular cause’s appeal to their target market.
Schools and education would appeal to moms of young families, likely of all income levels.
Health and wellness moves up a bit higher on the Maslow’s pyramid in my mind. Families who are satisfied with the educational offerings in their communities (or just send their kids to private school) and adults without children (and thus more disposable income) will start thinking about organic food, exercise, etc.
So, does this signal that Target is trying to go after a more affluent market?
Let’s invest the time in praising Target for showing other retailers and corporations the value, benefit and community appreciation that they have been a leader in cause marketing programs. This Minneapolis-based set of professionals have been great stewards in investing back into the community.
Asking a question that, in effect, dictates that they should continue to always keep their contributions in the same contribution area smacks of big brother demands. Let’s trust Target, as well as other retailers, to make their decisions as to how they might choose to invest funds, and then offer them the thanks that they deserve.
Yes. Spreading the cause marketing dollars around is a smart and beneficial idea for any company. Changing their charitable initiatives from time to time is good PR and good for business. Health and wellness is a year round focus that also ties into Target’s core assortments and their customer base.
No, I don’t agree. I think they should find a way to support both education and health. They are moving to sell their pharmacy department to CVS and may eventually let them take over
the HBA business.
I don’t know about “epic fail.” Target will find a compelling way to activate. Seems to me that Target is a brand in “turnaround.” Brand Target needs all the nurturing it can get.
There are several business issues:
Health and wellness has a lot of ambiguity around it, a bit of “beauty is in the eye of the beholder.” Works for CVS, but Target’s relationship with ALL families requires something more emotionally powerful and intentionally more obvious. Health and wellness is a tactic. Childhood education is a strategy.
Comments on the Star Tribune article suggest that the current program could be more focused, better managed and aggressively leveraged.
All change comes with risk.
That’s why we say retail ain’t for sissies!
Having led a corporate foundation for a large company for many years, a couple thoughts come to mind. On one hand, companies and their foundations always need to tie their CSR giving to causes that make sense to their customers. When this changes, hopefully a good transition plan and communication takes place.
At the same time, schools and nonprofits depend on corporate partnerships but they know that this can evaporate when the emphasis changes. But it certainly doesn’t make it any easier for them when it happens, and I am much more in favor of long-term partnerships than a “flavor of the month” approach to CSR giving. This approach helps develop relationships, fosters volunteerism and can keep things dynamic.
Hopefully Target will really focus on developing a long-term approach on their wellness emphasis. Unfortunately that won’t reduce the impact to all of the groups no longer funded.
It is not up to me to approve or disapprove, it is up the the customers. But I don’t think most of them shop at Target because it has supported schools and I don’t think most of them will quit shopping at Target because they stopped and are now going to support wellness.
If Target wants any of these initiatives to succeed they are going to need to do a better job of marketing. They don’t seem to be getting a lot of bang for the dollars they are donating.
Look at what CVS has done with eliminating cigarette sales and the PR they continue to get out of the initiative.
The groups that received funding will be unhappy and vocal within their circle for a short while after the end of the education funding. Then people will forget and it shouldn’t impact them long term.
Safeway recently discontinued eScrip and many schools were vocally upset back in August, but they seem to have moved on and quieted down.
Target seems to be in a bit of a strange phase right now. Their service levels aren’t what they used to be and pricing in grocery isn’t great anymore. Giving CVS the HBA category would be like suicide for velocity in the stores, in my opinion….
This is genius. Target is going to pursue the yoga pants market and the health and wellness line in their store while promoting to clustered events such as 10k marathons sponsored by the local community, full of word-of-mouth adults who talk regularly to each other about health and wellness.
I’m a little bit of an education crusader, so I’m personally disappointed to learn that Target is shutting off its donation spigot to America’s schools. The $1B in past donations is commendable, however, and any business has a right to alter its cause marketing strategy.
I suspect that on reflection, Target determined that its education commitment was no longer delivering the kind of soft returns—reputation, shopper loyalty, community involvement—that it hoped for.
One could also argue that a program launched in 2010 with such a huge goal had too long a time horizon. Fatigue may have set in, among shoppers and the Target marketing team, and many underlying circumstances have changed in the interim—in the company and the market.
It makes a certain cold sense, of course, for Target to select a CSR initiative partly based on the profit contribution of a related merchandise category. School supplies tend to be low margin and highly seasonal, after all.
I want to commend Zel Bianco for his creative and thoughtful suggestion in this discussion. Target would indeed do well to aim some of its health and wellness charity toward school programs. I hope they are listening.
It is always tough when you want to stop doing something, the beneficiaries will always object. Question is, how much does Target benefit through the school charity to drive its red card program? I am sure originally the program was designed to drive the REDcard program, but the reality is retailer private label credit hasn’t picked up. At this point given limited margins, Target has to pick and choose which charity to pick to drive REDcard signup.