Target is another well-known big-box department store and a marketplace online. They’re one of the stores that utilize one of the oldest tricks in the book for retailers to increase eCommerce sales. That’s creating private label brands. That's why it's essential to understand the private label definition. Originally, Target was known for its cheap yet chic clothing in the early 2000s. However, by the 2008 and 2009 recession, they weren’t doing so well. That’s when Target Private Label Brands started growing.
Merona and Mossimo was one of Target’s first private label brands. Over time, they began to look dated; they lacked a sense of brand identity. This is because they started having too many products over different themes.
Target’s CEO, Brian Cornell, planned a big turnaround for the company that started by introducing new Target private label brands. Repositioning can be quite difficult for a brand to do. This is because customers will typically hold onto what brands used to be.
The Gap is a great example of a brand that unsuccessfully tried to make a comeback. Due to brand fails like these, Target decided to completely discontinue brands like Mossimo and Merona. Even though they were still generating revenue, they were not as lucrative as they once were. Keep in mind that people also take advantage of private label dropshipping.
The Start of Target Private Label Brands
Back in 1995, the first Target Private Label Brands were introduced. Archer Farms was the very first owned food brand. The private label consists of essential food items that most customers would purchase on a regular basis. This included bottled water, bread, pasta, milk, and more.
Target has grown its private label brands over the years. They even expanded into different categories. They now have the brand Room Essentials for home decor items. Heyday is their private label for electronics. Cat & Jack is their well-known brand for kid’s apparel.
Some Target Private Label Brands
After Target realized how successful their private labels could be, they went all out. They also didn’t disappoint. There are now 48 private label brands under Target’s name. 10 of the brands are worth a billion dollars.
Target was able to secure $1 billion in market share during the first quarter of 2021. During this time, their private label brands increased 36%. That is their strongest growth to date. They did this by changing a few details about their times. This included increasing their quality and ditching the plain and cheap look.
Big retailers like Macy’s and Walmart are making an effort to do the same. Some have partnered with celebrities to launch private labels. Others focused on improving product quality and even packaging.
Many years ago, when you’d see private labels in the grocery stores, the products were associated with being low-quality. Brands quickly discovered that they had to differentiate themselves. By increasing the quality and charging a fair price, they were able to become more appealing to consumers.
2017 was full of growth for Target as they added many private label brands. These included Goodfellow & Co., Project 62, A New Day, JoyLab, and more.
Target Private Label Food Brands
Favorite Day is one of the newest Target Private Label Food Brands. It includes items like French brioche, ice cream bars, blueberry streusel, and chocolate lava cakes. Target’s goal was to appeal to the diverse palates of many consumers. Many of them started to appreciate the small pleasures in life during the COVID-19 pandemic.
The private label brand’s savory and sweet products include everything from snacks to bakery goods, candy, beverage mixers, and more. All the products are designed with self-gratification and indulgence in mind. They’re all priced below $15, too.
The Favorite Day products complement those under Good & Gather. They generated $2 billion in sales during 2020. Target expanded the brand with Good & Gather Signature. It’s a premium line consisting of 60 products. These include specialty coffees, pasta sauces, gourmet pizzas, and more.
Target strives to perform consumer research in order to understand what their consumers want, before creating a new brand. Favorite Day was no exception. 11,000 Target consumers were consulted over multiple rounds of research. This was done in order to learn about their everyday schedules, stressors, and to perfect the brand’s recipes.
Target Private Label Clothing Brands
There have been 30 new Target Private Label Clothing Brands that have launched over the past 5 years. They range from women’s clothing that includes inclusive sizing, home collections, and more. Auden and Colsie is a popular sizing inclusive women’s clothing brand. Pillowfort and Cloud Island are Target private labels for babies and kids.
10 of the Target Private Label Brands generated at least $1 billion in sales. 4 of them were able to reach the $2 billion mark. It’s believed that some brands imitate well-known products from other companies. These include All in Motion, Target’s activewear collection, and Opalhouse, their home and decor brand.
Target also sold Champion’s C9 line which consisted of affordable athletic wear until 2019. After removing the brand from the shelves, they created their own brand for activewear. It featured similar designs, graphic patterns, color blocking, and similar price points to Champion.
Even though some private label brands had unoriginal products, they excelled at driving company sales. Target’s stylist items are unique to the brand and company which is what draws customers back in. It’s also what entices consumers to fill up their carts with items they didn’t originally want or plan on purchasing.
Target is Driving Sales
Target’s sales from private labels have gone up almost 30% since 2017. They reached $94 billion in 2020. The company also thrives off of its tactics to showcase up-and-coming brands both online and in-store.
There have been 22 direct-to-consumer bands since 2016 that have chosen to work exclusively with Target. These brands sell their products only at Target locations and that’s what keeps consumers coming back. It creates something that is referred to as the “Target Effect.” It's a phenomenon that when you go into a Target store to shop for specific items, you end up purchasing a bunch of products that you didn’t know you needed.
Some big-box retailers might focus on their low prices being their selling point. However, Target also brings in consumers that value good design. The retail industry is no stranger to imitation, and it’s been going on for decades. It can happen by accidental influence or by design.
Private label brands were built on identifying what works and trying to come up with how to manufacture it for less. Many fast fashion brands, such as Zara and H&M, have succeeded by copying runway designers. Big-box retailers like Target and Walmart chose to invest in private label brands. Target and Walmart private labels take their ideas from other designers.
The Amazon private label brands can also be thrown into the mix. They use data to determine the top-selling types of inventory and use it to their advantage. The company then creates private labels to duplicate the products and sell them at cheaper price points.
It All Comes Down to Strategy
Target has a great private label strategy, and they utilize it to their advantage. They focus on 3 different areas of investment. These include trend research, R&D, and design. That’s what results in sales increases of Target Private Label Brands and also keeps consumers excited about shopping at the store through the kitting technique.
The company has proven that its approach is an ideal path to victory. It provides just what consumers want: high-quality and exclusive products, affordable prices, and strong designs.
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Frequently Asked Questions About Target Private Label Brands
Does Target Have Private Label Brands?
Yes, Target has private label brands. In fact, they have 48 private labels and 10 of them are worth a billion dollars. In 2021, Target’s private label brands rose by 36%.
What Is an Example of a Private Label Brand?
An example of a private label brand includes Target’s brand Good & Gather. It’s a food and beverage brand that replaces brands like Simply Balanced.
Who Is Target’s Biggest Competitor?
Target’s biggest competitor is Walmart. They have more than 4,500 stores in the United States and more than 5,000 internationally. Another big competitor is Amazon due to their eCommerce options.