Target, one of the US’s largest retailers has bucked the downwards sales trend afflicting almost every other physical retailer across the planet by focusing on high quality, great value private labels. It’s been building out infrastructure to upgrade its digital offerings. Target (NYSE:TGT) has made developing private labels a key part of its strategy. PRIVACY POLICY. Target’s private label strategy – good quality, mid priced, great value – is driving growth whilst other retailers struggle October 12, 2019 Target, one of the US’s largest retailers has bucked the downwards sales trend afflicting almost every other physical retailer across the planet by focusing on high quality, great value private labels. Target is going deeper into the grocery space, with a new in-house brand that focuses more on differentiation, and less on cheap goods. And as comparable store sales continue to rise, the stock price is trading at an all-time high. Apparel retailers have been advancing a private-label strategy for years. It's a simple strategy: create attractively packaged brands, sell them at reasonable prices, and let customers see them on store shelves. “Target has a long history of leveraging their perceived ‘design’ aesthetic via private label or exclusive brands, and this shows they are willing to refresh those brands once consumers are no longer responding,” said Gehani, noting that 30 percent of Target’s sales currently come from its private label brands. The retailer has introduced Good & Gather, a grocery line, to its owned-brand portfolio. Target has committed to the strategy of using private labels to drive traffic, and it continued to do that through 2018. That’s precisely where its private label program comes into play. It plans to phase out its Archer Farms and Simply Balanced brands, and cut back the Market Pantry line. Target’s Answer to Discounters Is an Even Cheaper Store Brand Retailer to add line of $1 consumer staples as it joins the battle for price-conscious shoppers Target plans … Target is a model for what a great private label strategy can look like. Greater Minneapolis-St. Paul Area. The eighth-largest retailer in the United States, it is a component of the S&P 500 Index. Clothing isn’t the only private label strategy Target is promoting. And Target thinks they can bring in more. How did Target do it? By Cale Guthrie Weissman. Target's strategy of differentiating merchandise through the development of private labels is not only a way to attract consumer attention but also potentially to … Acceleration north of 10%, he said, is “a huge number.” What’s clear is that its apparel strategy is paying off. “Our teams have done a fabulous job of curating our own brand assortment, really having the right assortment in front of the guests,” said CEO Brian Cornell during the earnings call when asked about the apparel boost. Shop Target online and in-store for everything from groceries and essentials to clothing and electronics. Private Label Strategy for Vendors This approach has worked for the retailer, giving consumers a reason to visit its stores, and it shows that having a brick-and-mortar presence remains important. Good & Gather brings that strategy to groceries. Target is putting some extra marketing oomph to promote the 12 new private-label brands it recently introduced to store shelves, according to Ad Age. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The company said that, so far, this launch has been successful. And Kohl’s has Sonoma as its billion-dollar in-house brand. By the end of 2020, the Minneapolis-based discount store retailer expects the brand to include more than 2,000 products. ... $69.5 billion chain's aggressive strategy to return to growth by producing a dozen new private brands, the first of … Target (NYSE: TGT) has launched over 20 private-label brands across nearly all of its categories. To compete in the grocery wars and gain market share from competitors such as Aldi, Amazon and Walmart, supermarkets are bolstering their private-label efforts. Finally, best-in-class private label brands develop a distinctive and highly recognizable visual identity and follow a consistent messaging strategy. Plus, there are plenty of everyday staples like milk, eggs and other favorites that never have those ingredients anyway.". Now, Target plans to apply that same strategy to groceries, and it could be a game changer. Amazon has focused on boosting logistics in the name of speed; Walmart has worked on leveraging its already-massive scale to create a viable digital program; and Target seems to have focused on both while also offering a more curated selection. It will allow the company to strengthen its connection to its customers and build goodwill by offering attractive items at value pricing. That, coupled with the fact that private labels are cheaper than third-party products, have helped the company grow profits while trying to differentiate itself from other players like Amazon and Walmart. Nov 2017 – Jul 2019 1 year 9 months. LED light fixtures in nearly every Target store’s ceiling design save the equivalent energy needed to power nearly 40,000 homes each year. 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