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'The Shops' Bring Indy Feel to Target

January 13, 2012

Respondents to a RetailWire poll last week thought the strategy of placing Apple stores within select Target store locations was an excellent (42 percent) to good (39 percent) strategic move for the chain.

Now comes word that Target's plan to open shops within its stores is not just limited to Apple. The company announced it will sell limited-edition merchandise from independent specialty shops as part of a concept called "The Shops at Target." Merchants will include:

  • The Candy Store in San Francisco — retro candy and confections from outside the U.S.;
  • The Cos Bar — beauty care products and cosmetics;
  • Polka Dog Bakery in Boston;
  • The Privet House in Connecticut — vintage furniture and accessories;
  • The Webster from Miami — clothing and accessories.

"This puts Target at the frontier of what's next in retail," Brian Robinson, director of fashion and design partnership at Target, was quoted as saying by The Associated Press. "We're building on that sense of discovery by offering our guests a chance to experience one-of-kind specialty stores and boutiques through collections that have been specifically tailored to their wants and needs."

Unlike the 25-store test with Apple, Target intends to offer merchandise from the specialty shops in all its locations as well as online. "The Shops" will offer 400 items ranging in price from a $1 nail file to a $159.99 ottoman sold on Target.com.

"This whole thing has been surreal since we're such a small business," Diane Campbell, co-founder of The Candy Store, told Bloomberg News. "We're a true mom-and-pop."


Discussion Questions:

Discussion Questions: Will Target have a hit with "The Shops at Target" concept? What reaction, if any, do you expect to see from Walmart and other competitors?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How would you rate the likelihood of success for 'The Shops at Target' concept?


Selling unique, exclusive merchandise has been part of the Target formula for a long time, and this venture is certainly true to the brand position. It moves Target further away from the pure price-and-commodity positioning of the past couple of years (complete with its own mini-dollar store at the entrance).

But there are a couple of cautions for Target to consider: First, can the company forecast demand (and execute) more accurately than with some of its recent missteps like Missoni? Second, do "The Shops" truly reinforce Target's value position, not just the "coolness factor"? If Target can succeed on both fronts, this looks like a winning idea.

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Dick Seesel, Principal, Retailing In Focus LLC

I've said it for years, "'Retail lives and dies by the answer to just one question, 'What's new?'"

Smart for the brand, the employees who work there, buzz and most importantly -- profitable sales. A real winner of an idea.

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Bob Phibbs, President/CEO, The Retail Doctor

Target is again trying to lead innovation in retail and effectively compete both up- and down-stream. As I've written before, if it can deliver an Apple service proposition, it will succeed there and a similar requirement applies to other "shops within the store."

That said, this is not a new concept, only new for now! Macy's became the dominant department store in the 1980s when many were struggling to compete with specialty stores like The Limited. While a retro-strategy, the fact that Target is testing innovative ideas (innovation being relative to competitors!) bodes well for them.

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Phil Rubin, CEO, rDialogue

I love this idea and it would draw me to Target. We grossly underestimate the power of uniqueness. When you think about it, Mother Nature is built on this principle -- the biggest discovery of our childhood was that no two snowflakes are exactly the same. Actually in nature no two things are the same. It was human kind that invented boring sameness that sends shoppers to sleep. Can you spell JoS. A. Bank?

So bringing in small shops that show me something I've never seen before is a most appealing concept and I'll be there. In a way this is putting more structure on the product demos at Costco. There you can run into a guy demoing an intriguing new product. Of course they disappear a week later never to be seen again.

That said, one of the challenges is getting through to the consumers' sub-conscious mind that it's time to WAKE UP; that something new is happening. Our brains are so conditioned to the same old same old. No one goes to Walmart thinking "I wonder what exciting new thing I'll see today." For the most part we've created the "comatose shopper."

You go Target -- the more unique, intriguing and inventive, the better.

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Ian Percy, President, The Ian Percy Corporation

This is certainly going to be a hit and others will follow. Big retail stores are going to struggle if they don't find innovative ways to use the retail space and drive foot traffic. Part of why COSTCO and the TJX Company (Home Goods, TJMaxx and Marshall's) are so successful is the treasure hunt quality they bring to retail. A consumer never really knows what they will find in the middle of a COSTCO.

John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

I'm a fan and advocate of the concept, "The Shops at Target" with my usual disclaimer, "depending on how well it's planned and executed." If laid out and performed well, this concept elevates the Target shopping experience up to another level and it speaks directly to Target's consumer market. The concept might also help to bring an appreciable number of new destination shoppers into the store with more frequency. The Apple store alone will accomplish this. Specialty shops, particularly with a local flavor, will add even more.

What will kill the execution, however, is if the stores are too small or too limited compared with their "regular" stores, or if the stores are not well staffed, or do not carry ample inventory, etc. And of course, the economics and financials need to be a benefit to the stores as well as to Target. If Target is too greedy, the plan will fail.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

Shopper's want to be surprised and delighted to discover or unearth that special unique something. Target is taking a great step to transform the retail store experience to augment and differentiate itself from the online world. 'The Shops at Target' concept will showcase limited-edition merchandise for a select period of time that will allow shoppers to discover something new. The challenge will be to sustain this cycle of new and unique merchandise to keep the 'surprise and delight' factor consistent for the shopper experience. Bringing the old world 'bazaar' experience to retail is a great idea that should be great for small 'mom and pop' businesses. The in-store experience will be communicated and will be further amplified by social media and digital shopper marketing communication channels. This concept will be successful and success will always be copied by others.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

All of a sudden, Target is NEW and FRESH. "The Shops at Target" will offer shoppers the opportunity to enjoy new products, new placements and new ideas. They will like that.

But like all things that are new and fresh today, there comes a time when they can become stale or burdensome, particularly when competition tries to duplicate "The Shops at Target." So, Target, start already to develop your next act for when a success of "The Shop and Target" era has ended.

Gene Hoffman, President/CEO, Corporate Strategies International

Properly executed, it is a winner. It enhances Target's appeal as a destination and exposes the specialty retailers to a customer base that they would not have reached.

The issue other competitors will have is their current positioning. Walmart's position as a price leader does not lend itself to this concept in the same way that Target does. As Richard pointed out, Target has offered unexpected items such as Missoni before with great (sales) success.

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Steve Montgomery, President, b2b Solutions, LLC

This strategy delivers on what shoppers desire from the physical retail store. IF the physical in-store experience doesn't have something unique to offer versus the digital/mobile experience, the magic and pleasure of shopping for discovery in addition to necessity goes away.

Execution will the the true test, but once again Target shows its willingness to be a true innovative merchant. I would seek out a visit to a Target store that offers "The Shops" concept. And I'm guessing the social buzz will be a big plus. The unfortunate part is that it will be available only in a limited number of stores.

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Anne Howe, Principal, Anne Howe Associates

I'm glad to see that Target finally stepped up with a 2.0 version of its limited availability brand strategy. This one checks quite a few boxes.

1. Price transparency-hedging exclusivity
2. Traffic-driving newness
3. Reputation-girding small business support
4. Master-brand-supporting moniker
5. Frequency-driving treasure hunt/planned scarcity

My only concern is that, unlike the growing number of online marketplaces, Target isn't just passively granting space to third party sellers, they are actively managing the execution of a revolving door of new brands, in multiple categories, under tight-ish time constraints, and with companies not used to executing under a large-scale wholesale model.

If it comes together, this will be a nice addition to the portfolio.

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Carol Spieckerman, President, Spieckerman Retail

I was excited when I heard about the concept, but was underwhelmed when I learned about the details, and disappointed.

What I'm reading is more of a "supplier diversity" initiative rather than a channel for local independent shops to get exposed at local Target stores.

The only thing I see here is just a different twist of their $1 section they have near the front of the store....

Ed Dunn, Founder, (Stealth Operation)

Fantastic approach and out of the box thinking by Target. I would expect this to be a success on several fronts. It will further enhance the Target brand as a mass retailer with style, it will keep the customer interested and the brand in the forefront of their shopping minds, and it will add incremental sales.

Walmart is a great retailer, but not able to execute this type of innovative retailing. Additionally, Walmart is strictly an efficiency and price driver. That is their brand message. When they deviated from that into more stylish concepts, it failed.

As far as other competitors, well most retailers are too stuck in their own "price driven boxes" and cannot think this creatively. Their approach will be to try to find concepts to put in the stores, find the partners to do it, have those partners fund it and it will fail miserably. This is not something you can charge slotting fees, ad fees, marketing fees for, and get rebates on. Target is on the correct track.

Phil Masiello, President, VALUChain Associates

I love it! This is taking the idea of constantly refreshed (digital) content to retail. Shoppers, and regular human beings, have a craving for the "latest thing." The success of twitter news streams and increasingly speedy networks is a testament to this. Kudos to Target for using the store as a showroom for fast-turning, micro-curated merchandise.

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Liz Crawford, SVP, Strategy & Insights, Head of ShopLab, Match Drive

Long live the Treasure Hunt!

Way to go Target.

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Ben Ball, Senior Vice President, Dechert-Hampe

Walmart has tried this to a certain extent with leased space. Meijer did this years ago with both leased space and their own stores-within-stores. Both have fewer today.

Anne Howe is correct. It's a great concept, however, the devil is in the execution. My experience with Target and their inability to deliver a Starbucks-like experience at their kiosks within their stores lends me to think that execution will be a major stumbling block.

Their test with Apple will tell a lot.

There is no question that Target does better than most in merchandising and experience than stores of their type. However, executing in a shop in the store concept will present all together different challenges.

Any real reports out there on how JC Penny is doing with Sephora store within a store? I have no data on that, however, as JC Penney does this and continues to move towards standalone locations, it would be an interesting comparison.


Brilliant and so spot on for the Target brand it will be hard for its competitors to follow suit. Supply chain concerns are real but this is a win/win, in my opinion.

Lisa Bradner, Chief Strategy Officer, Geomentum/Shopper Sciences

I think it's a great idea, but like so much in retail, the devil's in the execution. But this is a strategy that begins to address a fundamental reality for many retailers -- their stores were originally sized for a very different economic environment. Now those stores are simply too big.

Ted Hurlbut, Principal, Hurlbut & Associates

Absolutely. They already have a hit with limited releases of designer apparel.

It's not a new concept, rather a beautifully repackaged concept. Department stores, have had "designer" offerings within their walls for decades (think Polo at Macy's). But Target has taken this one step further, repackaged it, and it feels new, exciting, and appealing.

The beauty of the concept is that Target has cultivated the brand personality that allows them to introduce these types of concepts. They have clearly defined their distinction amongst the mass merchandisers and it will be very difficult for anyone to duplicate it.

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Carlos Arámbula, Strategist, One Ninth & Co-founder of MarcasUSA, One Ninth, MarcasUSA LLC

Target may have a hit, but this is yet another example of the massifying of something small and handcrafted. Apple and Missoni are one thing: High-end brands with great known appeal. But taking small, artisanal businesses and making them mass is an assault, frankly, on that which creates character in neighborhoods around this country. The Candy Store is a component of the special flavor of Russian Hill in San Francisco, as Polka Dog is to the South End neighborhood it inhabits in Boston. So the hit Target may have is actually a hit on American ingenuity and individuality.

Lisa Bayne, CEO, Artful Home

What will make this more than a "cool factor" PR benefit for Target is that it is a truly multi-channel strategy. The availability of the goods at all locations and online gives the Target shopper access to unique good where and when they want them.

Target is taking the concept of curation that runs through many of the boutiques they have chosen for this program and extending it to "curate" the best of independent retail for their customer base.

Look for this to be heavily promoted via Target's strong social media presence as well.

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Martin Mehalchin, Partner, Lenati, LLC

New concepts can bring innovation and new value for shoppers when well executed, as panelists have discussed very well. "Shops at Target" are a great idea, and can add fun and excitement for the destination. Retailers must differentiate clearly on a continuing basis to keep shoppers loyal; the bar is constantly raised.

This is a great opportunity to feature smaller companies with unique products and explore a variety of offerings. Like any good idea, competitors may imitate, but first out can lead and win. Again, key is bringing small companies to a national marketplace -- and deliver the shopper experience with a bit of fun ... easily and seamlessly.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Taking advantage of the big-box footprint provides unique opportunities for retailers who have a loyal customer and a trusted brand. Best Buy has done some interesting things (Pacific Home & Kitchen), and Target will be able to work closely with their partners to ensure a good experience and consistency with regards to their guests' expectations. Other retailers may stumble a bit with such initiatives if they simply try to turn their location into a "mall" and they don't have a solid store experience of their own; or if they try to plug in partners that don't fit with their own brand.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

Target is on to something, bringing some shiny objects to lure customers in to the store. Hopefully there is identified brand affinity for the "Shops" that Target is bringing in and therefore sales will ensue.

In any event, one would hope that increased foot traffic will yield more sales for Target's core products.

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Bill Hanifin, CEO, Hanifin Loyalty LLC

I think the shops could be successful, but probably not in all markets. I watched the video and immediately thought, "This could help teach America how to explore a store again, not just look for the lowest price." This brings back my stated, "Passion of shopping."

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Jerry Gelsomino, Principal, FutureBest

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