November 27, 2013
Paying Less Works for Target Shopper
It turns out, I can be bought. I know this because Target has bought my business. While many people emphasize the chic over the cheap when it comes to the chain, I’m here to say, for me, it’s mostly about price. My guess is I’m not alone.
Follow the money with me:
- The chain is typically within the neighborhood of Walmart when it comes to every day pricing.
- Target.com makes it easy to find coupons to use in stores. Kantar Media reports the Target site gets more than double the average daily visits for coupons (Kroger is second) than any other retailer.
- Cartwheel by Target, the chain’s digital savings tool, adds discounts (typically five percent to 25 percent) on top of its low, every day prices as well as sales items and/or products with coupons.
- The Target REDcard takes five percent off the total bill for each shop. (The program has other perks, but I’m in it mostly for the savings.)
Yesterday, Target announced special exclusive offers for REDcard holders and Cartwheel users to kick off the holiday season. There’s nothing getting me into a store on Thanksgiving or Black Friday, but I might go online to do some Christmas shopping.
"We’re excited to offer our guests more discounts than ever before and introduce great new digital ways to save this year," said Jason Goldberger, senior vice president of Target.com and Mobile, in a statement. "Whether online, on their phones or in stores, Target guests will find deep discounts and competitive pricing on a wide variety of the season’s most popular holiday gifts."
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Recent Discussions
Discussion Questions
Do you see Target’s pricing and promotional aggressiveness as a departure, in any way, from what it has done in the past? Is it the right strategy to help the chain compete for market share in the current competitive environment?
Poll
Target’s value-driven offers are a tightrope act. Yes, the chain does need to compete vigorously against Walmart, Amazon and the big box stores with which it butts heads. And Target has often struggled to communicate its value equation, despite the REDCard program. But “value” is not always equal to “lowest price,” and Target must continue to improve its product development and in-stock execution if it wants to escape the downward spiral of falling prices and falling margins.
Target is searching for a message that will successfully compete with Walmart. Periodically Target tries to challenge Walmart as the low price leader, and periodically they fail. Target’s current push emphasizes price and promotion as well as cheap chic, thereby not completely blurring its brand message, but it feels as if Target will once again get caught in the middle, where it cannot win.
It’s a race to the bottom no matter how you spin it. When it’s all about price — however much George likes it — how does a retailer stand out? At some point, someone, somewhere is paying for it. And the consumer doesn’t care as long as they got “the deal.”
This used to be why so many independents went out of business, because the owners couldn’t sustain the lost margins. I suspect it will be noted when big boxes consolidate or close.
No, Target has always been known for value. Unfortunately for retailers the definition of value shifted when the economy nosedived. The price point of value has decreased and Target is making sure that the consumer still sees them as a great place to find it. This is especially important as Walmart increases its competitiveness to combat its own perceived sales issues.
With the Target REDCard 5% rebate, in my opinion they are a better price option than Walmart. This is the RIGHT STRATEGY. They also price match. This is old news.
While I never considered shopping at Target because they were chic, I certainly shop there because they are cheap. However, when I do shop at Target, I’ve never get the feeling I’m going down Tobacco Road like I do at another big box retailer. Somehow they seem to attract a better class of employee without paying them significantly more and a better class of consumer without charging them more.
While Target is a far cry from achieving sales per unit and sales per square foot of their biggest competitor, it appears they are slowing narrowing the gap. Some of Target’s image comes from site selection. They have strategically avoided low income areas and rural locations.
During this season I would expect Target to emphasize price because everyone else does. While REDcard and coupon deals exist, the rest of the the special sales events of designers and much of the advertising all focus on fashion at affordable prices. Keeping the balance is a fine line, but Target needs to emphasize the fashion image to keep their reputation.
I gave up a day off to do some holiday shopping with my wife this past weekend. This was an attempt to work on the specific items list. We visited five well known establishments and were amazed to see much of the same stuff at the same price point.
In an attempt to put a stop to the endless search through aisles, I kept recommending we put this off until after Thanksgiving when the prices would surely be in line with her planned expenditures. At her insistence, we visited Target and there was that day’s holy grail putting an end to the search for what felt like centuries, at least to me it did.
On the way home and through the pain of my feet, still sore from a long day’s march, I was amazed at the price difference we came across at Target’s store. I have little doubt that many others are feeling the same way and will be back to attempt to secure whatever they can at the best price out there. The point is that even with all the advertising and TV talk, I was not convinced that Target’s pricing would be all that they claimed. But at least in this effort it was, much to my surprise and appreciation. Will the rest of the world find this out? I guess we’ll just have to wait and see.
I’ve felt for a while that Target was caught in a bit of a trap between Walmart and Kohl’s. Walmart does price better and Kohl’s does fashion better. And then there’s Amazon online. That’s the prism through which I view Target.
I think Target has done a relatively good job of finding the middle ground between the two, although I think it’s a vulnerable place to be, long term.
I do think that emphasizing value during Black Friday is a sensible approach. There will be time in the next few weeks to emphasize fashion. But it’s always a balancing act.
According to today’s poll, nearly 90% view Target’s moves as likely leading to increased market share this holiday season.
Unlike its big box competitors, Target benefits from having significant brand equity built around the notion of great product and merchandise selection within an attractive, helpful retail environment. Placing some emphasis on price/value won’t detract from its overall brand strength.
I don’t see Target having altered their direction; they have always been highly promotional around the holidays, as evidenced by their very competitive Black Friday specials. I love their “count down” clock on their Black Friday page. With many retailers opening stores prior to Friday and running spot specials throughout the weekend, Target has created a number of mechanisms that help them to maintain the excitement around this event. Excitement, good specials, and well-run stores add up to great traffic and will translate into solid sales for Target.
As I sit at the airport waiting for my flight to arrive and hope that it is on time or close, I ask myself why I am not a Target customer. Could it be they continue to search for their competitive identity?
I see both REDcard and Pfresh as low ROI, gross margin eroding programs that drive insufficient traffic. The foray into Canada looks like it could be low ROI, too. In 2006 I described Target as “the best retailer” in the world. There was only a little hyperbole in that, since they had great prices, good in stock positions, interesting brands and good display in apparel, and shabby chic in the home business was just too cool. Oh, and did I mention the cutting edge ads? Now, they are going head to head on price with Walmart, and head to head in grocery. That is not the strategy that made them the best retailer in the world in 2006.
Fighting with Walmart on price is like slow dancing with an elephant…one misstep and you are dead.
I highly value Target as an upscale discount retailer and think the company’s more aggressive digital and in-store saving strategies this year will be very effective in enticing holiday shoppers to buy.
These saving opportunities along with Target’s strong commitment to design through owned and exclusive brands will attract me much more than their competition can.
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Target’s value-driven offers are a tightrope act. Yes, the chain does need to compete vigorously against Walmart, Amazon and the big box stores with which it butts heads. And Target has often struggled to communicate its value equation, despite the REDCard program. But “value” is not always equal to “lowest price,” and Target must continue to improve its product development and in-stock execution if it wants to escape the downward spiral of falling prices and falling margins.
Target is searching for a message that will successfully compete with Walmart. Periodically Target tries to challenge Walmart as the low price leader, and periodically they fail. Target’s current push emphasizes price and promotion as well as cheap chic, thereby not completely blurring its brand message, but it feels as if Target will once again get caught in the middle, where it cannot win.
It’s a race to the bottom no matter how you spin it. When it’s all about price — however much George likes it — how does a retailer stand out? At some point, someone, somewhere is paying for it. And the consumer doesn’t care as long as they got “the deal.”
This used to be why so many independents went out of business, because the owners couldn’t sustain the lost margins. I suspect it will be noted when big boxes consolidate or close.
No, Target has always been known for value. Unfortunately for retailers the definition of value shifted when the economy nosedived. The price point of value has decreased and Target is making sure that the consumer still sees them as a great place to find it. This is especially important as Walmart increases its competitiveness to combat its own perceived sales issues.
With the Target REDCard 5% rebate, in my opinion they are a better price option than Walmart. This is the RIGHT STRATEGY. They also price match. This is old news.
While I never considered shopping at Target because they were chic, I certainly shop there because they are cheap. However, when I do shop at Target, I’ve never get the feeling I’m going down Tobacco Road like I do at another big box retailer. Somehow they seem to attract a better class of employee without paying them significantly more and a better class of consumer without charging them more.
While Target is a far cry from achieving sales per unit and sales per square foot of their biggest competitor, it appears they are slowing narrowing the gap. Some of Target’s image comes from site selection. They have strategically avoided low income areas and rural locations.
During this season I would expect Target to emphasize price because everyone else does. While REDcard and coupon deals exist, the rest of the the special sales events of designers and much of the advertising all focus on fashion at affordable prices. Keeping the balance is a fine line, but Target needs to emphasize the fashion image to keep their reputation.
I gave up a day off to do some holiday shopping with my wife this past weekend. This was an attempt to work on the specific items list. We visited five well known establishments and were amazed to see much of the same stuff at the same price point.
In an attempt to put a stop to the endless search through aisles, I kept recommending we put this off until after Thanksgiving when the prices would surely be in line with her planned expenditures. At her insistence, we visited Target and there was that day’s holy grail putting an end to the search for what felt like centuries, at least to me it did.
On the way home and through the pain of my feet, still sore from a long day’s march, I was amazed at the price difference we came across at Target’s store. I have little doubt that many others are feeling the same way and will be back to attempt to secure whatever they can at the best price out there. The point is that even with all the advertising and TV talk, I was not convinced that Target’s pricing would be all that they claimed. But at least in this effort it was, much to my surprise and appreciation. Will the rest of the world find this out? I guess we’ll just have to wait and see.
I’ve felt for a while that Target was caught in a bit of a trap between Walmart and Kohl’s. Walmart does price better and Kohl’s does fashion better. And then there’s Amazon online. That’s the prism through which I view Target.
I think Target has done a relatively good job of finding the middle ground between the two, although I think it’s a vulnerable place to be, long term.
I do think that emphasizing value during Black Friday is a sensible approach. There will be time in the next few weeks to emphasize fashion. But it’s always a balancing act.
According to today’s poll, nearly 90% view Target’s moves as likely leading to increased market share this holiday season.
Unlike its big box competitors, Target benefits from having significant brand equity built around the notion of great product and merchandise selection within an attractive, helpful retail environment. Placing some emphasis on price/value won’t detract from its overall brand strength.
I don’t see Target having altered their direction; they have always been highly promotional around the holidays, as evidenced by their very competitive Black Friday specials. I love their “count down” clock on their Black Friday page. With many retailers opening stores prior to Friday and running spot specials throughout the weekend, Target has created a number of mechanisms that help them to maintain the excitement around this event. Excitement, good specials, and well-run stores add up to great traffic and will translate into solid sales for Target.
As I sit at the airport waiting for my flight to arrive and hope that it is on time or close, I ask myself why I am not a Target customer. Could it be they continue to search for their competitive identity?
I see both REDcard and Pfresh as low ROI, gross margin eroding programs that drive insufficient traffic. The foray into Canada looks like it could be low ROI, too. In 2006 I described Target as “the best retailer” in the world. There was only a little hyperbole in that, since they had great prices, good in stock positions, interesting brands and good display in apparel, and shabby chic in the home business was just too cool. Oh, and did I mention the cutting edge ads? Now, they are going head to head on price with Walmart, and head to head in grocery. That is not the strategy that made them the best retailer in the world in 2006.
Fighting with Walmart on price is like slow dancing with an elephant…one misstep and you are dead.
I highly value Target as an upscale discount retailer and think the company’s more aggressive digital and in-store saving strategies this year will be very effective in enticing holiday shoppers to buy.
These saving opportunities along with Target’s strong commitment to design through owned and exclusive brands will attract me much more than their competition can.