Target wants a bigger slice of Apple’s pie

Discussion
Rendering: Target
Feb 26, 2021

Target announced yesterday that this month it is debuting a new and “enhanced shopping experience” for Apple products in the chain’s stores and online.

The retailer said the plan consists of specially designated Apple shops inside 17 of its stores in 10 states with more to follow. The shops are intended to bring the technology giant’s products, including AirPods, Apple TV, Apple Watch HomePod, iPad and iPhones, along with accessories, into a single location in stores. Each shop will feature new lighting fixtures and displays. Target consultants who have received “specialized training” from Apple on the company’s tech will staff the shops.

Apple will also get standalone treatment on target.com with the same products highlighted online along with an expanded selection of accessories.

Target will give its REDcard holders, whether they buy in stores or online, an additional five percent discount on Apple products when they purchase with their cards.

Customers also have multiple choices for ordering and receiving their Apple purchases including going to a store and speaking with a tech consultant or through Target’s Drive Up, Order Pickup or Shipt same-day delivery services.

Christina Hennington, executive vice president and chief growth officer at Target, said Apple’s products are a draw for the chain’s customers. The two companies have been working together for more than 15 years. She said, “This new model was created with Target’s guests in mind, and we’ll continue to learn and enhance the experience through future rollouts later this year.”

The Apple shops are part of a larger trend toward strategic partnerships at Target. The retailer has collaborated with Disney, Levis Strauss and Ulta Beauty. The intended goal, according to Target, is to make the retailer “the ultimate destination for the most sought-after national brands, alongside its stable of coveted owned brands.”

The retailer announced last November plans to open Ulta Beauty at Target shops at more than 100 of its locations and online this year. The two said they were expecting to open “hundreds more” with the 1,000-square-foot shops staffed by Target staff trained by Ulta. The shops feature Ulta’s in-store digital tools, including its GLAMLab, virtual try-on tech.

DISCUSSION QUESTIONS: Do you expect Target’s “enhanced shopping experience” will grow the chain’s sales of Apple products in its stores and online? How do you assess the retailer’s progress towards becoming “the ultimate destination for the most sought-after national brands” and “coveted owned brands?”

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Braintrust
"As mall traffic declines, Apple gains broader omnichannel reach, boosting sales. Target is on track to dazzle consumers as an increasingly attractive shopping destination."

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21 Comments on "Target wants a bigger slice of Apple’s pie"


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Mark Ryski
BrainTrust

This is a smart move by Target. Technology is part of life, and there is arguably no stronger tech lifestyle brand than Apple. Not only does broadening the profile and selection lend itself to increased Apple sales, but Apple makes Target “cooler” and even more relevant. Target continues to make great product/brand moves and this is yet another one.

Neil Saunders
BrainTrust

Over recent years, Target has spent a lot of capital on making its stores welcoming and engaging. It is now looking for categories where it can generate higher sales by being even more impactful and interesting, and by providing better customer service. Electronics, and in particular Apple devices, represent one of those opportunities. While current displays at Target are perfectly acceptable, they are subpar compared to Apple’s own stores and even the Apple concepts at rivals like Best Buy. Moreover, Apple products can get a little lost in the wide array of gadgets that Target sells. For a popular, high value product this is something of a lost opportunity that the new mini shop will help remedy.

David Naumann
BrainTrust
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
9 months 8 days ago

Apple is one of the country’s strongest brands and has a cult-like following. As Target promotes this offering and expands it to more stores, it will increase store traffic and sales. The store-within-a-store concept has proven to be successful with other brand combinations and this should be a winner. The only potential pitfall is, will Target be ready for the increased consumer demand for post-purchase questions, issues and service? While Apple products are very intuitive, they still need an element of customer education for users.

Brandon Rael
BrainTrust

Retail collaborations, aka “mashups,” are critical strategic partnerships, and it’s a win-win situation for both brands. Target has already had an outstanding run, and Best Buy has proven that companies can benefit from a strategic partnership with Apple.

Apple is placing its bets on both Best Buy and Target, as both companies draw so much traffic as it stands. It also allows the iconic tech company to extend its physical retail reach without the significant capital investments of opening additional store locations, hiring additional staff, and all the necessary infrastructure to run things.

Convenience and accessibility matter, and physical retailers are as relevant as ever.

Oliver Guy
BrainTrust

I absolutely love this and wish it would come to a Target equivalent in the U.K. The ability to have a (near) full service Apple outlet in a more convenient location would be amazing. Many retailers are not able to show Apple kit off as well as Apple does so this approach works wonders for consumers and should drive traffic into Target stores. It could well be that this near department store type approach is a winner all around.

Cathy Hotka
BrainTrust

Genius. (Sorry.) Apple’s demographic is Target’s demographic, and with long lines to get into Apple stores, Apple customers would certainly approve. What an exciting partnership!

Gene Detroyer
BrainTrust

Over the years we have all become more tech savvy. I have learned that when my phone or computer is not cooperating to reboot, then voila, it works. But obviously there is more to tech than that and the vast majority of us still and will always need help. This is a great idea. especially for the Target stores that are not located near an Apple store. Target has about 2,000 stores, Apple less than 300.

Target is also sending a serious message here, “Go ahead make a $1,000 or more purchase here and have no worries.” And, while it is not a requirement to buy the Apple product at a Target to get the Target help, it plants the reason in the consumer’s mind to buy the product at Target rather than online directly from Apple.

That is the way retailers should be thinking.

Ricardo Belmar
BrainTrust

Great point about the price – Target is now showing these products as a luxury purchase in the store. The message is truly “you can get everything you need at Target, at any price.”

I see two kinds of Apple buyers. Those that know exactly what they want to buy, and those that need to “try out” the product before buying. For the former, Target is a great destination for them if they are also a Red Card holder, but also provides more convenience than the Apple store if you live in the suburbs vs. a city downtown area. For the latter, it’s one more option (in addition to Best Buy) to try it out. And for those that think this is a risk to Best Buy – I don’t think so. The typical Target shopper is probably not thinking about this purchase as a computing device or major electronics purchase. It’s a lifestyle purchase for them and isn’t that why they shop at Target in the first place?

Jeff Sward
BrainTrust

This is the highest compliment that these two brands/retailers could pay each other. A perfect marriage. Target gets one of the premier brands in the market and Apple gets great off-mall exposure. Good for Apple. A huge feather in the cap for Target.

Lisa Goller
BrainTrust

Partnerships like this are on the rise because companies can’t do it all on their own.

As mall traffic declines, Apple gains broader omnichannel reach, which will boost sales. Target is on track to dazzle consumers as an increasingly attractive shopping destination.

This move elevates Target’s image by teaming up with Apple’s premium brand for a superior in-store experience. Target’s private label prowess earns loyalty through exclusivity. National brands will want to work with Target, as consumers find the chain even more magnetic.

Ricardo Belmar
BrainTrust
Although Target already sold Apple products in their electronics department and nine years ago announced a similar “partnership”, this is yet another strong move by Target to cement their position as the modern department store. For Target this is a match made in heaven, drawing more attention to a popular set of products that Target customers are surely in the market for already. Add this to their other recent branded partnerships (Disney, Levi’s, Ulta) and their private lines, plus grocery, and shoppers have every reason to return to Target visit after visit. For Apple, this is about access. Apple stores are largely mall-based outside of urban/downtown areas so this gives them a prominent off-mall destination that has built-in popularity across a demographic that aligns well to Apple. Coupled with their presence in Best Buy stores, this will ultimately give them great access to shoppers they otherwise might not reach as easily. Many comparisons will be drawn to Best Buy, but that relationship still has an advantage over Target – Best Buy has some ability to… Read more »
Harley Feldman
BrainTrust

Focusing on and highlighting Apple products will grow Target’s sales. Often people look at Apple products as separate items instead of also looking at the Apple infrastructure for the integration of the products. Having the Apple specialty store within a Target where experts can be approached means the excellent features of Apple products and their ability to work together can be communicated to customers, increasing the chances of a sale.

Target is making progress as a national brand shop. This will take some time until customers get used to it and think of the brands at Target instead of at the brand’s own stores. Over time, Target will continue to make progress as a one-stop shop helping the national brands grow within Target’s stores.

Phil Rubin
BrainTrust

The quote on the topic, direct from Target, says it all (to me at least): “This new model was created with Target’s guests in mind.” This customer-centric experiential strategy is what retail going forward must be in order for it to succeed. It is such a basic strategy yet all you have to do is shop most brands, in any channel, to see and experience how exceptional such a strategy and experience is today. Including Apple in RedCard’s value proposition is icing on the cake. Smart move and one that will succeed and, apparently, expand.

Richard Hernandez
BrainTrust
Richard Hernandez
Director, Main Street Markets
9 months 8 days ago

I love this collaboration but with one caveat – I really hope they put in staff that are very savvy with Apple product and can recommend solutions without having to go to a physical Apple store. Where I used to live, the closest Apple store was four hours away and the Best Buy in town was able to correct a hardware issue on my phone.

David Adelman
Guest

Brilliant! Target is quickly becoming the “mini-mall replacement.” This strategy will draw more consumers into Target stores and create a one-stop-shop for customers wanting national brands plus Target’s unique private labels.

At the same time, Target will be reducing expenses by requiring less staff and greater revenue streams from their tenants. Target will bring in new consumers to their stores that may have never visited before.

By introducing in-store branded shops, Target has also accelerated the customer experience by having highly trained brand ambassadors selling their products directly from their stores-within-a-store.

It’s a win-win for everyone!

Cynthia Holcomb
BrainTrust

Excellent news! Welcome after the challenges of the past year where the ability to shop a physical Apple store required time and timing just to enter the store — while at the same time, it has been a breeze to shop at Target. Target is perfect for the store-within-a-store concept housing great brands many people trust and shop for regularly. Target, one-stop shopping loaded with tons of new and interesting shoppable styles for everyone.

Gary Sankary
BrainTrust
This sort of focused attention on one specific line of products will absolutely grow Target’s sales in these categories. Target is really excellent at selecting strategic partners whose brands compliment their own and Apple is certainly one of those. The congruency of their target customers overlap really nicely. For Apple, this gives them increased attention in the market and takes away at least a bit of space and signage from their competition in Target; Amazon and Samsung. For Target they now have specially trained team members, courtesy of Apple, in their stores who can engage customers in selling these items. These aren’t impulse items, they require a higher degree of interaction and sales knowledge to close the deal. Now Target has the team to do it. I think a really big deal here is the extra 5% off Apple products for Target Red Card holders. Discounts on Apple products are few and far between, and I think this will resonate well with Target guests, and may even drive a few extra Red Cards into their… Read more »
Kai Clarke
BrainTrust

This can only improve Apple’s in-store sales at Target, but the real question is what impact will it have (if any) on Apple’s sales as a manufacturer? As long as this is a full Target investment, and does not require additional Apple resources, then Apple will consider it a win.

Shep Hyken
BrainTrust

More space in the store could mean more Apple products. What are they giving up to do so? Target wants to be the destination retailer, and they have some stiff competition. They have done a great job growing and then navigating through the rough waters of COVID-19. I’ve got total confidence in them that they are doing the right thing for their business. (I’ll even buy more stock!)

Brian Cluster
BrainTrust

Apple is the powerhouse technology brand that has been at Target for 15 years and Target has drastically improved its experience in multiple departments in the past years. With all of that experience and common demographics in many of their stores, why only expand to 17 stores or less than 1% of the stores? It is an exciting store-within-a-store concept, but many of us may not see this experience where we live until 2022. Definitely a more test-and-learn approach vs. the Ulta rollout.

William Passodelis
Guest

Brilliant — absolutely brilliant!

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Braintrust
"As mall traffic declines, Apple gains broader omnichannel reach, boosting sales. Target is on track to dazzle consumers as an increasingly attractive shopping destination."

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