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[12 comments]

Will Target's new organics venture matter to consumers?

April 9, 2014

Target, when it is not getting bad press for data breaches, is known for working with designers to create unique products at price points that a large percentage of the population can afford. Now, the retailer is looking to apply the same principle to a program called "Made to Matter - Handpicked by Target," which brings together 17 natural, organic and sustainable brands to introduce new items in partnership with the retailer.

The collection will cover categories including baby, grocery, health and beauty care and household products. Each brand working with Target will debut at least one new item to be sold exclusively in Target. In total, there will be 120 new and limited-time exclusive products in the Made to Matter collection. The chain began adding the items last month and will continue to roll out more until the complete collection goes on display in September.

[Image: Target Made to Matter]

Manufacturers participating in the program include: Annie's Homegrown, Burt's Bees, Chobani, Clif Bar & Company, Ella's Kitchen, EVOL, Horizon Organic, Hyland's, Kashi, Method, Plum Organics, Seventh Generation, SheaMoisture, Vita Coco, Yes To and Zarbee's Naturals.

"Our guests are looking for products they can feel good bringing home without sacrificing price and performance," said Kathee Tesija, executive vice president, merchandising and supply chain, Target, in a statement. "We're taking the guesswork out of buying better-for-you products by bringing together 17 trusted brands."

FINANCIALS:     [NYSE:TGT] [ ]

Discussion Questions:

Will Target's "Made to Matter" program improve its reputation among consumers of organic and natural products? Will it ultimately provide Target with a competitive point of difference in the retail marketplace and drive sales at the chain?

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 likely is the "Made to Matter - Handpicked by Target" program to increase sales of natural and organic products for the retailer?

Comments:

Some of these products are actually owned by "agribusinesses" now - which was uncovered when they battled against GMO labeling in California, but some don't...and it's a great idea in any case.

To me, this is the best sign I've seen of Target returning to its roots yet. This is great.

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Paula Rosenblum, Managing Partner, RSR Research

There are at least 3 keys to Target's success with "Made to Matter."

1. Can Target make the program and products matter to their core customers?
2. Will these "new" products from these manufacturers be both innovative and appealing to Target's customers?
3. How long will the "limited-time exclusive" period be exclusive to just Target?

The current trends of "green, conscious/healthy life style" is certainly a good time for Target to be launching "Made to Matter." But the economy is still struggling to recover. So the bottom line question is one of price premium of these products versus perceived value on the part of Target's customers.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

I'm underwhelmed by this program. All but 17 of the products are already offered at other retailers. The new products might be a new scent or flavor. This is not a big commitment from Target for anything new or different. Target may get an initial boost from the advertising campaign that will support the program, but in the long run, consumers seeking organics will probably return to shopping elsewhere.

Target needs to focus on the basics: keeping shelves stocked, exclusive merchandise and customer service, otherwise the chain will continue to get caught in the middle between low price stores, like Walmart and higher priced specialty stores, and the middle is not a good place to be.

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Max Goldberg, President, Max Goldberg & Associates

How does an organization deal with continued bad press? One way is to shift the conversation. This program may be such an attempt to reengage with customers and develop a feel good and consumer-desired concept. On the other hand, this may be a bona fide strategic initiative to develop a significant point of difference vis a vis the competitive array.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

It's a great idea; bundling "better" brands or brands that represent a single idea, especially a "hot" idea. The message is absolutely more clear when spoken in aggregate vs just spread throughout their other goods.

That's one thing, but will it improve the overall impression of Target's stance on "healthy" goods? IMO, yes. The other, more correct answer would be that it surely can't hurt, especially since they are the right brand choices for all three parties: Target, manufacturer, customer.

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Lee Peterson, EVP Creative Services, WD Partners

The Target release states that "products will be available throughout the store, both in the products' usual aisles and as part of specialized collection displays." If all products receive double placement, I'm rooting for the program. If most are integrated into the "usual aisles," the program will get lost. Target is calling it a "collection" -- merchandising it that way will make all of the difference.

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Carol Spieckerman, President, newmarketbuilders

Target continues to look for the silver bullet. Could Target be the next JCP?

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Gene Detroyer, Professor, Independent

I was surprised that most of the brands listed are well-known labels in the organic and natural space, not under-the-radar/niche brands that Target is surfacing for broader public consumption. However, I LOVE the fact that Target is trying to add some excitement to the consumables space, where PFresh conversions have largely have matured out of comp store results and concerns about execution in grocery remain.

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Kelly Tackett, Research Director, Planet Retail

Echoing what others have said, yes, it's nice to see Target in the news for something positive - or at least neutral - even if the story is generated by Target's own PR department. But at the same time, it's hard to get too excited about 120 products out of the tens of thousands of SKUs Target carries...and you can't get much of a "point of difference" when you're selling/doing what everyone else is.

'notcom'

Bundling the products under the "Made to Matter" headline will go a long way in connecting with consumers. While some feel that these established brands undermine the success of the program, I think they help differentiate Target from other retailers. Target has placed the focus on what they offer that is good for the shopper and good for the earth. I think Target has the right idea for their reputation and their customers' loyalty.

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Joan Treistman, President, The Treistman Group LLC

Like the fact "Made to Matter - Handpicked by Target" will introduce 120 new and limited-time exclusive items from these 17 brands and I believe this program will be quite successful.

I'd love to see "Made to Matter" become a mobile retail experience and visit college campuses and/or urban areas where a Target is not easily accessible. The selected brands would appeal to college students and urbanites alike.

This would also help to move Target away from the big-box, discount retailer stigma that keeps some consumers from shopping there.

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Karen S. Herman, Founder & Design Director, Gustie Creative LLC

Target loyalists should respond very favorably to this type of campaign. Much like their efforts with giving back a portion of purchases to local school programs, this should be yet another reason why Target fans will stay connected to the brand.

I know from personal experience (our family) that grocery shopping at Super Target has been a big hit. However, there is always the gravitational pull of the Whole Foods option. If Target does more to promote and bring in more organics, they should be rewarded.

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

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