October 31, 2013
Target Guests Should Expect to ‘Pay Less’ This Christmas
It will still be chic, but Target wants all its current and prospective guests to know that they can shop on the cheap in its stores and on Target.com this holiday season.
Aside from everyday low prices and special promotional deals, Target offers:
- Five percent off all purchases to REDcard Rewards members;
- Additional discounts to guests using its Cartwheel app;
- Price matching. Target will match the price of qualifying items between Nov. 1 and Dec. 21 if a guest finds the same item for less in a local competitor’s ad or at select online retailers.
Janney Capital Markets analyst David Strasser also thinks Target will become more aggressive in its pricing tactics for the holidays.
In a research note, Mr. Strasser pointed to falling customer traffic over the past three quarters and intense holiday competition as factors that are leading Target’s management to consider sacrificing some margin to drive greater revenues.
BrainTrust
Recent Discussions
Discussion Questions
Do you think it is wise for Target to put greater emphasis on consumer savings this holiday season? Which of the various steps Target is taking to promote price do you think will be most effective?
Poll
The Big Boys are trying to make sure that no one beats them on price, which will make it tough to stand out in the marketplace for smaller retailers.
It has been said that retail is not for sissies many times here, and the upcoming holiday season is crucial for many bottom lines. Target is doing what they need to do, to fight Walmart, and the consumers will win.
In America’s heartland, the primary reason for picking a retailer is price. My guess is that the RedCard is the driver. That 5% is real and immediate. I have no clue what Cartwheel is, and price matching has too much fine print and too many restrictions.
There’s a thin line between rewarding your customers and becoming Walmart. If Target forgets where that line is, it will lose more than a few holiday sales.
Target is in a tough situation. When Target plays the low price game, it loses. Walmart and Amazon own that mantle. Rather than try to win the price battle, Target should emphasize unique products and overall customer value.
It’s true. Target costs less.
Shoppers looking at decorative mirrors found beautiful ones at Target for $34.99, and similarly beautiful ones at Kohl’s for $212. But because I was so wrong about the direction JCP took during the Johnson era, perhaps I’m wrong to assume that lower prices are better….
The devil is in the details: what is a “qualifying item”? Is a door buster at Walmart on Black Friday a “qualifying item”? It wasn’t in 2012. Their “REDcard” is really effective – when the cashier says your total is $30 and you swipe the REDcard and abracadabra, it’s $28.50 that makes quite an impression. I wonder how long Target can continue that.
Most of the retailers still in business are keenly aware of the 4th quarter challenges for fiscal year 2013. This holiday season will be aggressively searched for price, including delivery costs, followed by availability by a larger number of consumers than ever before. To think otherwise will be disastrous. The only good news is consumers are less inhibited to use e-commerce means to squire a product or service for an important gift. Target seems to be very aware of these challenges and has correctly positioned the company to engage this worsening retail market.
Probably one of the best kept secrets about Target of late is their pricing. They are better priced than Walmart and better than the supermarket in key categories. Would that have been even possible to imagine only a short time ago?
Target has been able to be successful on value rather than price. Nevertheless, price is part of the value equation. There is nothing wrong with telling that part of the story as well. However, it may not be the best strategy for Target or anyone else to allow it to be your primary message.
Consumers are slowly learning that Walmart is not always the best priced and sometimes not even close. Walmart likes to shout it from the rooftops. Even so, if you do, you have to be the best priced, not just commit to matching someone else. Simply being a match player makes the consumer wonder why they didn’t just buy it at the other retailer in the first place.
Very quietly, Target has changed perception. Their challenge will be not to become to obsessive in messaging as to leave out all the other factors in the value equation that their customers have come to expect from them.
Waiting for Walmart to launch their efforts, but I don’t think the price competition between the two is the issue. Most people who have a reasonable location choice are either a Target customer or a Walmart customer. Discount retail is overbuilt for the demand in most markets.
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The Big Boys are trying to make sure that no one beats them on price, which will make it tough to stand out in the marketplace for smaller retailers.
It has been said that retail is not for sissies many times here, and the upcoming holiday season is crucial for many bottom lines. Target is doing what they need to do, to fight Walmart, and the consumers will win.
In America’s heartland, the primary reason for picking a retailer is price. My guess is that the RedCard is the driver. That 5% is real and immediate. I have no clue what Cartwheel is, and price matching has too much fine print and too many restrictions.
There’s a thin line between rewarding your customers and becoming Walmart. If Target forgets where that line is, it will lose more than a few holiday sales.
Target is in a tough situation. When Target plays the low price game, it loses. Walmart and Amazon own that mantle. Rather than try to win the price battle, Target should emphasize unique products and overall customer value.
It’s true. Target costs less.
Shoppers looking at decorative mirrors found beautiful ones at Target for $34.99, and similarly beautiful ones at Kohl’s for $212. But because I was so wrong about the direction JCP took during the Johnson era, perhaps I’m wrong to assume that lower prices are better….
The devil is in the details: what is a “qualifying item”? Is a door buster at Walmart on Black Friday a “qualifying item”? It wasn’t in 2012. Their “REDcard” is really effective – when the cashier says your total is $30 and you swipe the REDcard and abracadabra, it’s $28.50 that makes quite an impression. I wonder how long Target can continue that.
Most of the retailers still in business are keenly aware of the 4th quarter challenges for fiscal year 2013. This holiday season will be aggressively searched for price, including delivery costs, followed by availability by a larger number of consumers than ever before. To think otherwise will be disastrous. The only good news is consumers are less inhibited to use e-commerce means to squire a product or service for an important gift. Target seems to be very aware of these challenges and has correctly positioned the company to engage this worsening retail market.
Probably one of the best kept secrets about Target of late is their pricing. They are better priced than Walmart and better than the supermarket in key categories. Would that have been even possible to imagine only a short time ago?
Target has been able to be successful on value rather than price. Nevertheless, price is part of the value equation. There is nothing wrong with telling that part of the story as well. However, it may not be the best strategy for Target or anyone else to allow it to be your primary message.
Consumers are slowly learning that Walmart is not always the best priced and sometimes not even close. Walmart likes to shout it from the rooftops. Even so, if you do, you have to be the best priced, not just commit to matching someone else. Simply being a match player makes the consumer wonder why they didn’t just buy it at the other retailer in the first place.
Very quietly, Target has changed perception. Their challenge will be not to become to obsessive in messaging as to leave out all the other factors in the value equation that their customers have come to expect from them.
Waiting for Walmart to launch their efforts, but I don’t think the price competition between the two is the issue. Most people who have a reasonable location choice are either a Target customer or a Walmart customer. Discount retail is overbuilt for the demand in most markets.