Target holds first storewide sale
A week after reporting its first quarterly comp decline in more than two years, Target yesterday ran its first-ever storewide sale. Called #TargetRun, the promotion delivered an extra 10 percent off any purchase (with some exceptions) in stores and on Target.com.
Storewide sales are a regular occurrence at department stores but a rarity for a big-box discounter. For Cyber Monday 2015, Target offered 15 percent off any online purchase but it didn’t extend the promotion to the store.
For #TargetRun, shoppers had to either clip the coupon from Sunday’s circular or text “RUN to TARGET” to get a mobile coupon to use on the day. REDCard members still earned another five percent savings on any purchase. Shoppers were encouraged to share photos and screen grabs on social media using the #TargetRun hashtag.
Although positioned as “just in time for back-to-school gear and Labor Day BBQ stock-ups,” no specific reason was given for the sale.
Reports assumed the sale was tied to the prior week’s second-quarter report, which was in line with expectations. However, comps missed plan — down 2.2 percent — and the retailer slashed its guidance for the year.
“In the second quarter, our No. 1 challenge was traffic, which affected sales in all of our merchandise categories,” Target CEO Brian Cornell said on a conference call with analysts. The drop came as Walmart’s U.S. division showed its largest comp gain since 2012’s second quarter.
The traffic decline was blamed on weakness in traffic-driving categories such as grocery. Pharmacy also declined, although the slip was partly due to the rebranding of those departments to CVS. Smaller fill-in trips declined for the second straight quarter. Some believe the chain is over-marketing “signature” categories (style, baby, kids and wellness) as it tries to recapture its “cheap & chic” reputation.
As typical, the one-day discount came with a few exclusions, including gift cards, prepaid cards, alcohol, dairy milk, pharmacy, optical, portrait studio, and brands including LEGO, Vitamix and several electronics brands.
- #TargetRunDay Is Coming! Save An Extra 10% On Your Purchase — Sunday Only – Target
- Target is discounting everything to win shoppers back amid boycott – Business Insider
- Target Reports Second Quarter 2016 Earnings – Target
- Target’s traffic problems won’t be an easy fix – CNBC
- Wal-Mart earnings: $1.07 a share vs $1.02 estimate; raises guidance – CNBC
Discussion questions: Do the benefits of its one-off storewide promotion outweigh the risks for Target? Are you generally in favor of wide scale promotions as an occasional marketing tool?