Target is the early star of Christmas – online
On Target’s third-quarter earnings call last month, CEO Brian Cornell expressed optimism about the retailer’s prospects for the holidays. Wall Street, however, was not impressed with the chain’s raised forecast which was not as high as analysts expected. Based on early results, however, it appears Mr. Cornell may have taken an under-promise and over-deliver approach in his remarks on the call that day.
According to data pulled from Slice Intelligence’s panel of over five million consumers, Target’s online sales grew 39 percent on Black Friday and 76 percent on Cyber Monday vs. the same days last year.
“Target offered aggressive price points on key items during Cyber Week 2017 and compounded that with an additional 15 percent discount across all of target.com during Cyber Monday,” Ken Cassar, vice president, principal analyst, at Slice, told RetailWire.
The retailer’s online sales represented a 44 percent increase over Cyber Week 2016, said Mr. Cassar. Target.com’s growth outpaced both Amazon.com and Walmart.com
Target’s online sales grew 24 percent during the third quarter and now account for 4.3 percent of the retailer’s total, up from 3.5 percent last year. The chain has also pursued greater integration with its physical store operations with in-store pickup and returns. Today, 1,400 of Target’s 1,800 stores are set up to fulfill online orders.
A key element of Target’s holiday marketing effort are eight new retailer-owned and exclusive brands across key categories including baby, kids, men’s and women’s apparel, accessories and home.
Last month, Target launched Hearth & Hand with Magnolia, an exclusive label co-designed with Chip and Joanna Gaines, which features 300 giftables, home décor and tabletop items. Most of the line is priced at under $30.
Mark Tritton, chief merchandising officer for Target, said the launch of Hearth & Hand “set the perfect tone for the holidays.” Before the Nov. 5 launch of the line, Mr. Tritton said, “Guests were shopping online in the early hours and lining up outside our stores across the country. And based on early demand, we’re implementing our inventory contingency plans to quickly replenish items that are already selling through.”
Target, which has struggled with its menswear sales in the past, appears to have found something with its Goodfellow & Co. label. Bloomberg reports the fashion is on par with H&M, and sales of the line are up 10 percent over Target’s previous offerings.
- Target posts big gains as Black Friday crowds converge online – The Brief Blog/Slice Intelligence
- Target Q3 2017 Results (Earnings Call Transcript) – Seeking Alpha
- Target has a plan to end the Christmas sales madness – RetailWire
- Target Lures Guys to Its Stores With Beer and Beard Wax – Bloomberg
- Target’s holiday forecast disappoints, sending shares lower – CNBC
DISCUSSION QUESTIONS: Does Target have the right marketing, merchandising and operational plan in place to make significant gains this holiday season and beyond? What are the biggest challenges it faces?