Will a curated marketplace strategy be an online game changer for Target?

Discussion
Source: Target.com
Feb 26, 2019
George Anderson

Target is looking to differentiate its online marketplace from rivals Amazon.com and Walmart. The retailer’s answer is Target +, a choice assortment of products from third-party sellers meant to complement the goods it sells online.

“Target + provides guests with a curated selection of product choices that enhance our existing assortment, with the perks they enjoy from Target, like five percent off with a Target REDcard, free shipping and easy in-store returns,” said Rick Gomez, Target’s chief marketing officer and digital officer, in a statement.

The retailer is recruiting “best-in-class specialty and national brands” that are looking to sell directly to consumers. Target is concentrating on recruiting third-party sellers to strengthen its presence in key categories, including consumer electronics, home goods and toys.

Target has been working with Casio, Kaplan Early Learning Company, Mizuno, Music123 and Serenity Health & Home Décor as it looks to expand its marketplace, reports TechCrunch. Third parties that join Target + will be responsible for shipping and related costs, CNBC reports. Target will accept returns of goods purchased from third parties in its stores.

DISCUSSION QUESTIONS: What do you think of the Target + initiative? Will it help Target to gain online market share?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Sales and margin growth require exactly this kind of execution that Target is pursuing."
"I love this move from Target. Rather than parroting Amazon, they are leveraging their historic strength of merchandise curation."
"If well executed, Target could become the e-commerce behemoth with products you can actually trust … and who doesn’t want that?"

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20 Comments on "Will a curated marketplace strategy be an online game changer for Target?"


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Ken Cassar
BrainTrust

I love this move from Target. Rather than parroting Amazon, they are leveraging their historic strength of merchandise curation. The role of merchant as curator is threatened by Amazon’s algorithmicaly driven merchandising strategy. This might be right for Amazon, but certainly isn’t the right move for all retailers.

Cathy Hotka
BrainTrust

Curated cheap chic is one of the reasons Target has been so successful. When customers can find a gorgeous hallway mirror for $39, they’ll come back again and again. Smart merchandising and careful selection can only enhance Target’s reputation, and attract new customers.

Rick Watson
Guest

It’s very difficult to “curate” a marketplace. Seller upload fees and your labor costs are so high. SKU mismatches occur and things slip through the cracks. Is Target ready for all this? I hope so!

Jeff Sward
BrainTrust

Attracting and retaining customers in this market requires some level of differentiation in brand promise, or product, or marketing, or …

If the retailer can’t build a moat of some kind, or if it shares too broad a range of product with other retailers, then it pretty quickly becomes race-to-the-bottom stuff. Sales and margin growth require exactly this kind of execution that Target is pursuing.

Liz Adamson
BrainTrust

While curating products that fill the holes in its existing assortment will be good for existing customers, I don’t see it as a strategy to gain new ones. In the online marketplace space, Amazon is the dominant competitor and is branded as the Everything Store, and it delivers on that with its billions of product listings. Amazon shoppers, especially Prime members are not going to have a compelling reason to switch to the Target marketplace. Returns in-store could be argued as a differentiator, but Amazon does make it pretty easy to send back returns. I don’t see Target impacting Amazon’s market share with Target+.

Larry Corda
Guest

Amazon maybe branded the “Everything Store,” but the problem is it’s not well curated. Shopping on Amazon is easy if you know exactly what your looking for. The items that Amazon suggests based on what other people bought in addition to that product is usually irrelevant. Let’s not dismiss the market share of people who are anti-Amazon. These people are potential customers for a competitor. Remember, Sears and Kmart were once the “Everything Store” and look where they are now.

It’s easier getting to the top than staying on top. Retailers are becoming too focused on what Amazon is doing and trying to replicate Amazon rather than focusing on their customers, their employees, their business and what they do well and then continue to build upon their successes. Target’s approach to the marketplace is rather intriguing and differentiates them from Amazon.

Anne Howe
BrainTrust

Target certainly has had an edge in sharp and chic curation, so this move fits their brand promise well. But their real test will come in execution of shipping and managing returns without leaking margin. The curators are second-guessing shopper taste, but investors are second guessing why the stock price remains suppressed.

Rich Kizer
BrainTrust

Brilliant. I’ll say it again – keep your eyes on this company. They seem to do their well-thought-out thing, and then they do it very well.

Ben Ball
BrainTrust

I give this move a “thumbs up” if only because it gives current Target loyalists a way to fill more of their needs at Target.com and keeps them off Amazon. The curation should make the selections offered in any given category more in keeping with the Target guest’s preferences for style and price point. Good move if the curation part of it is rigorously implemented.

Cynthia Holcomb
BrainTrust

It seems Target is the first to re-invent the third-party seller space. Electronics, early learning, etc. are available more broadly and easy to shop via specification filters. A meaningful opportunity is a Target+ curated home collections, ranging from dishes to towels to furniture. Leveraging the Target POV against Amazon’s vast, non-curated, time-intensive to search catalog. Conversely, Walmart’s new MoDRN collection puts Walmart in the private label furniture business. It’s smart of Target to curate and leverage the well-known and well-received Target POV with third-party sellers. More to sell, more Target to love.

Rick Watson
Guest

Hi Cynthia, curious on your take on what Target is “reinventing” here. Lots of sites claim that Amazon is too hard to discover and shop and their strategy becomes “we are curated.” One way to say that is it’s less convenient to shop there. 😉 Would love to hear your take.

Cynthia Holcomb
BrainTrust
Hi Rick. Walmart and Amazon 3rd party sellers sign up and can post most any products they want to. Product images are bad, in fact, most 3rd party sellers are the digital equivalent of jobbers, selling off old inventories or very cheaply made new products. Thus the excruciating time it takes to shop Amazon and Walmart. Target’s reinvention of 3rd part sellers is Target functioning as a buyer for a retail store, which they are. Meaning 3rd party vendor products are carefully selected and individual products specifically CURATED season after season, merchandised to further enhance Target’s design point of view. Curation in this manner requires only a few good merchants curating the Target vision. Giving Target the best of both worlds, curated, consistent and constantly evolving new products from 3rd party sellers, curated to leverage the Target brand, customer experience, and sales. Sure, Target needs to handle returns. Returns are opportunity costs, easily overshadowed by Target’s ability to curate from the best of 3rd party sellers. Thus avoiding the cost of all things required to… Read more »
Adrian Weidmann
BrainTrust

Selecting, curating and developing high-profile/design private labels offered at affordable prices has been Target’s strength in developing their loyal brick-and-mortar shoppers. Why not do the exact same thing for your digital online customers? Kudos for Target not trying to out-Amazon Amazon, but rather being true to what made their brand so successful.

Rick Watson
Guest

Color me a little skeptical. They are losing the selection battle to Wayfair and Amazon. More third-party sellers isn’t the only answer. I’m surprised they aren’t announcing investing a lot more in private-label. They will go right to ChannelAdvisor, Feedvisor, CommerceHub — just watch. And then what? What’s hip and “Tar-jay” about the same prices and products as Amazon but without Prime?

“Curated” is not a unique consumer value proposition. It’s a market entry approach. Every marketplace starts out as curated until the systems are automated enough to handle what’s going on. If this comes with supply chain services, now we are talking.

Joy Chen
BrainTrust

Target is successful for its exclusive curated assortment strategy so it is unclear how this approach delivers on that. To provide a broader assortment is not the same and Amazon owns that.

Ken Morris
BrainTrust

If the products “curated” from third-party best-in-class specialty and national brands are available exclusively on Target.com, then it will help increase Target’s online market share. However, if these products are also available on Amazon and Walmart.com’s marketplace, then it won’t be a significant bump for Target.

The challenge with limiting its offering is that it makes it difficult for Target to be the first place consumers look for products. With more than 50 percent of consumers starting their product searches on Amazon, other marketplaces are competing with this top-of-mind status. Once a consumer finds the product they like on Amazon, oftentimes they will just buy it rather than shop around. Being the first place the customer looks really matters.

Jasmine Glasheen
Staff

Target has an outstanding reputation and, as I see it, this is only going to add to the retailer’s pull.

Target already stands out from other value-based retailers by selling higher-quality merchandise that stands up (better than others) to the rest of time.

There’s a big opportunity for Target to build on the perception of quality with a highly-curated online selection. If well executed, Target could become the e-commerce behemoth with products you can actually trust … and who doesn’t want that?

Craig Sundstrom
Guest

I’m of mixed opinion of this: on the one hand, they rose to fame on “curating.” Remember “cheap chic”? At least there was the perception that they did; OTOH, that’s yesterday’s news, pre-internet, and now you can find anything you want and it really doesn’t matter where it comes from if you order online.

But whether this idea succeeds or not — however vaguely one defines the term — no, it’s not going to be a “game changer.” Nothing will be. (Let’s all hold hands — virtually — and repeat the mantra “fix the essentials, fix the essentials…”)

Patricia Vekich Waldron
BrainTrust

If well executed — not just the merchandise curation but order, delivery and return execution — Target stands a good chance of increasing customers’ visits, loyalty and purchases.

Oliver Guy
BrainTrust

Great to hear Target grasp the nettle on a curated assortment – I really like this as part of Target+. Curation is one of the key areas Gen Z consumers seek and this is spreading to older demographics.
What is key however is that the curation is appropriate and contextual to the consumer – without being “creepy.” Without that, market share may not benefit.

wpDiscuz
Braintrust
"Sales and margin growth require exactly this kind of execution that Target is pursuing."
"I love this move from Target. Rather than parroting Amazon, they are leveraging their historic strength of merchandise curation."
"If well executed, Target could become the e-commerce behemoth with products you can actually trust … and who doesn’t want that?"

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