May 1st, 2015
Getting Back on Target
Target’s unveiling of a limited-time offering from female fashionista brand Lilly Pulitzer last week—and the overwhelming response—suggests the retailer is returning to its roots. Designer collaborations like the one with Pulitzer (or Issac Mizrahi or Phillip Lim) take the brand back to what made it win in the competitive retail marketplace. Yet a double-edged sword from the near-instant sell-out exists, indicating strategies that worked to solidify the retail giant’s brand more than a decade ago have to be played more carefully to help rebuild and protect its equity moving forward.
Why is revitalizing the brand in order? Target’s past couple of years have been less than rosy. Sales growth has been lackluster. Their data breach amounted to one of the biggest leaks of personal financial information in history. The retailer’s response missteps encouraged consumers to react with fewer store visits. Its foray into Canada and general miss on how Canadian shoppers differ from U.S. consumers resulted in shuttering all 133 of its stores a mere two years after the expansion. As if that’s not enough, they recently cut 15 percent of their corporate office workforce.
The retailer also lost its way in living up to the brand identity that made it distinctive. It delved too deeply into Walmart territory with its ramped up grocery focus, not just in Super Targets, but across most of its stores. The brand that early on earned a consumer cult following (exemplified by its French-sounding nickname “Tar-zhay”), has been diluted. But with a recent corporate shake-up and a focus back on its traditional staple product categories—apparel, baby goods, health and beauty, and home goods—it appears the retailer is getting back on track. Affordable, national brands are back in the crosshairs.
The Lilly Pulitzer venture is distinctly Target: an offering of chic fashion for the closet and household, at an accessible price. But the impact of the Lilly Pulitzer promotion has been debated in the blogosphere. Does the backlash from thousands of disappointed shoppers, who on the day of the unveiling lost their chance at a deeply discounted piece of the brand, outweigh the benefits for Target? Frustrations were unified through hater hashtags. And what of the Lilly Pulitzer brand? Did its highbrow persona take a hit as it offered summer dresses at a fraction of their typical retail price?
From the perspective of why and how brands win, we believe the venture is a clear victory for both entities. Lilly Pulitzer, still no ubiquitous brand name in high fashion, saw its web traffic increase 1,000 percent in one day. That type of buzz and awareness could theoretically be bought, but it wouldn’t be cheap. Target is getting its groove back and even those disappointed by Sunday’s empty racks can’t deny their expectation that Target values affordable fashion.
As Target continues to partner with respected fashion brands for limited time offerings, they will need to tread carefully. While the joint venture strategy is as sound as it was 15 years ago, the consumers who benefit from it behave differently. Target will need to leverage the opportunity to create instant social media buzz and resultant turnkey omnichannel buying demand with care.
Brands matter to consumers. Winning brands are a destination. Promotions create social currency. Authenticity can’t be faked. To hit the bullseye on their success strategy, Target must demonstrate command of how to offer their value equation to a critical mass moving forward.