Target has big plans for EXPLODING Sales-Look what’s coming
During what is being dubbed “the retail apocalypse”, superstore Target is hitting the bullseye on profits.
What is the secret to Target’s success? Private Labels.
Sales of private labels, lines not marketed or tagged exclusively with Target’s name or brands, have skyrocketed the earnings of the superstore.
Analysts predicted an enthusiastic 0.7% growth in Target’s sales, but newly released reports from the company show an increase of 1.3% – almost doubling the estimates.
Executives from Target were quick to credit its private brands such as Cloud Island, Cat & Jack, and Pillowfort. Neil Saunders, managing director of GlobalData Retail, wrote in a note to investors,
“Not only are these brands credible and compelling, but they are also helping to differentiate Target from rivals.”
Just how successful have the private brands been? The line of children’s clothing, Cat & Jack, raked in more than $2 billion in sales within the first year. Not too shabby.
The swift minds who control Target are hoping to springboard off of their success by launching four additional private brands. Hitting the racks this fall are a women’s clothing line, A New Day, and menswear brand, Goodfellow & Co.
In case your home feels left out, you can soon fill it with products from Project 62.
Diving into the over-crowded athleisure market, Target will debut Joy Lab.
In total, the company is scheduled to release 12 new private label brands over the next 18 months. Here is a link to Target locations around South Florida and beyond.
But they are not the only ones with a private-label trick up their massive sleeve. It is rumored that shopping giant, Amazon, is developing private brands and is expected to release more news of their ventures soon.
Target’s (and potentially Amazon’s) victory, however; does not bode well for all. In a recently published article from Business Insider, they point out that private labels are contributing to slowing sales of traditional brands.
Not all markets are able to sustain private labels in today’s economy.
In grocery chains, for example, the “stigma of ‘generic’ goods has lifted”, according to a note by Barclays. In simple terms, consumers are leaving behind name brand foods and buying store brands. Trader Joe’s has its own brand of almost everything, and offers items for a consistently low price.
Brands like Nestle, and consumer conglomerates including Procter and Gamble and Unilever are facing what Barclays calls a “sphere of despair.”
New “generic” brands are emerging to cater to wallets open to the no-frills items. These, coupled with low brand loyalty, are spelling trouble for the big names. It is possible that we could see some major brands attempting to de-brand themselves to offer a generic-looking product line.