Right on Target
Target Corp. knows how to put together an outfit.
The Minneapolis-based chain continues to set the retail world on fire with award-winning ads: For the seventh year in a row, Target won the Heineman Trophy for Best in Show at the Retail Advertising Marketing Association’s (RAMA) annual Retail Advertising Conference.
“Target has won more RAC Awards than any other retailer. They continue to set the standard for engaging and effective work,” said RAMA president-ceo Douglas Raymond when presenting the award in February.
(Target also won for direct mail, multi-media, new media, and magazine ads; sister division Marshall Field’s, including Dayton’s and Hudson’s department stores, won for direct mail, TV, and newspaper ads.)
The secret to Target’s ad success is co-branding. TV and print pair the chain’s private-label apparel with national brands like Windex, M&M’s, and Pringles. Its latest RAMA winner, Pop Art, matched flood pants with Tide detergent. Ads running this year under the tagline, “Color my world,” group like-colored products: Pringles, Coke and Wm. Wrigley Co.’s Big Red gum for red, Windex, Zest, and Scope for blue. (Procter & Gamble brands include Pampers, Pringles, Scope, and Zest.)
The ads are textbook co-marketing. Are they also the tip of the iceberg in a remarkably savvy plan that has national brands paying media freight for the privilege of appearing in Target’s trendy halo? Chairman-ceo Bob Ulrich won’t say.
“Some contribute money, and some don’t,” said Ulrich at Target’s shareholder meeting in May. Different agreements with manufacturers make it hard to generalize Target’s approach to funding co-marketing, he explained. It’s likely that most funding comes through co-op ad funds, but Target reportedly has turned down manufacturers, being choosy about which brands to showcase.
“We’re very positive about promoting our own brands, such as Mossimo and Michael Graves,” Ulrich adds.
Mossimo clothing hit Target racks this year via an exclusive deal, one of a handful that spices up its private-label closet. There’s also Carter’s Baby Tykes for kids clothes, Waverly for home furnishings and stationery, and Eddie Bauer for camping gear. Brands added in 2000 include Liz Claiborne apparel, Martex domestics, and Philips kitchen appliances. Target expands its Waverly textiles line this year with more bedding and its first bath products. But in apparel, which accounts for 25 percent of Target sales, private-label still takes precedence.
“We’ll continue to look at national brands,” Ulrich says. “If it’s a credible brand for our mix and has good long-term potential” that doesn’t conflict with existing private label, Target will consider it. “We also want to give fantastic value to our guests, and national brands don’t always fit that,” he adds.
(Sister chain Mervyn’s, on the other hand, has added national brands such as Nike, Gloria Vanderbilt, and Villager by Liz Claiborne while building its own store brands including High Sierra, Sprockets, and Hillard & Hanson.)
Target’s dedication to private-label apparel is a promotional opportunity for complementary brands beyond advertising. Smart marketers will invite Target along on brand-funded forays outside the store. Other retailers, too, may be open to lending their apparel expertise for brand promotions, such as Roche Pharmaceuticals’ mall tour for Xenecal (May 2000 PROMO). As part of Roche’s lifestyle pitch for the weight-loss drug, large-sized models gave 15-minute talks on image and weight loss, and how to dress while gradually slimming down.
Brands Matter
National and specialty brands play a crucial role as Target expands its SuperTarget format: mass-merch stores with a full-service supermarket inside carrying high-end brands such as Starbucks coffee, Fannie May chocolates, Krispy Kreme doughnuts, and La Brea breads.
Target will double the number of SuperTarget stores by adding 30 or more this year, mostly in the South and Midwest, and will remodel 35 stores it bought from Montgomery Wards, many of them prime real estate in premiere markets.
The company plans to double the number of Target and SuperTarget stores to 1,954 by 2011 and increase the corporation’s total square footage eight to 10 percent per year. Total revenues for 2000 rose 9.5 percent to $36.9 billion, with the Target division accounting for $29.3 billion of that. Marshall Field’s was $3.01 billion, Mervyn’s $4.15 billion.
Playing the Field’s
Target Corp. this year consolidates its 64 department stores under the Marshall Field’s name. Dayton’s and Hudson’s stores get a makeover mid-July through mid-August. Rechristening them all Marshall Field’s lets the division “leverage brand strategy under one name,” says Marshall Field’s president Linda Ahlers, who adds that the unit launched its bridal registry under the Field’s name earlier this year and has had good response.
