By Elizabeth Holmes
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 5, 2017).
To understand what today's clothing shoppers want, take a look
at the beer aisle.
Niche craft brands are stealing share from traditional beverage
behemoths, as customers hunt for something that feels special. The
same is true in beauty and grooming, where startups are getting all
the buzz.
Target Corp. is taking note and cleaning house, shedding some of
its stalwart brands and launching more than a dozen new ones over
the next 18 months in apparel and home furnishings. To make room,
the men's and women's Merona line and men's Mossimo offering will
be phased out, having grown too big and homogenized to garner
shoppers' affection, executives say.
Faced with slumping sales and stiff competition from rivals,
including Amazon, Target hopes the new launches will give shoppers
a reason to come into its stores.
Each new brand has a defined personality and purpose, Target
says, and isn't a nondescript label. "People are looking for
something that is more curated and meaningful to their specific
lifestyle," says Mark Tritton, Target's chief merchandising
officer. The goal is for A New Day, a more fashionable line of
women's classics, and Goodfellow & Co, a modern menswear
collection, to make an emotional connection with shoppers --
something Merona never was able to do.
The new names, which will begin to appear this fall, are meant
to complement the remaining brands, allowing each to have a clearer
point of view, Target says. The athleisure-inspired JoyLab, for
shoppers going from "crunches to brunches," will be marketed as a
fashion brand, while the existing C9 Champion line is positioned to
emphasize performance. Project 62, a home brand with a modern
aesthetic in the works, will be displayed alongside the more
traditional Threshold brand.
In addition to the launches, Target is making changes that it
says reflect how customers want to shop today. Rampant discounts
and promotions, which Target says have diminished customers' trust
in retailers, will be kept to a minimum with the new brands. Thanks
to better lighting and more mannequins, displays will resemble a
boutique in a mall more than a big-box chain. New racks and shelves
will allow for cross-merchandising, like displaying shoes alongside
dresses.
Total Target sales fell 5.8% last year, to $69.5 billion. Sales
at Target stores open at least a year fell 1.3% in the first
quarter. The chain reported a "small decline" in apparel same-store
sales in the first quarter.
The Minneapolis retailer is investing heavily in its new brand
strategy, hoping to boost profits with fresh interest in these
high-margin categories.
Half its apparel and accessories will be overhauled in the next
two years, and more than a third of its home offerings. "Brands
become a great differentiator," says CEO Brian Cornell. Target
wants to draw customers from struggling rivals, including
department stores and specialty chains that are closing
locations.
The brands coming this fall will take a page from the playbook
of Cat & Jack, a collection of children's apparel and
accessories that Target introduced last summer to replace the
clothing lines of Cherokee and Circo. The older labels were seeing
same-store sales gains in the single digits, according to Mr.
Tritton. "They weren't underperforming, we just felt they had
overstayed their welcome," he says. Shoppers wanted clothes that
were more stylish and durable.
Cat & Jack sales have surpassed Cherokee and Circo apparel
sales combined, with same-store sales rising double digits and
total sales set to top $1 billion in the first year. Even as it
swells in size, Cat & Jack's style focus remains the same,
Target says, with bright colors, whimsical graphics and clever
slogans. When customers wanted edgier, more fashion-forward styles
for slightly older children, Target launched a brand called Art
Class. It, too, is selling well, offering "validation of why we
need multiple brands with unique aesthetics," says Michelle Wlazlo,
senior vice president of apparel and accessories.
With many customers browsing online before coming into the
store, Target has done more with its in-store displays to help
shoppers make the connection. Both Cat & Jack and Art Class
have their own landing pages on Target's website, with graphics and
color schemes specific to the brands replicated in store displays.
For Cat & Jack, a three-dimensional hot-air balloon calls
shoppers' attention to the store shelves.
To create niche adult brands for an audience as large as
Target's -- 30 million people walk through its doors every week --
the company relied on insights consumers gave its market-research
and design teams.
Real shoppers will appear in some of the new brands' marketing
materials alongside models. "Consumers are looking for brands they
can relate to," says Rick Gomez, Target's chief marketing officer,
and "seeing people like themselves" helps draw that connection.
Write to Elizabeth Holmes at elizabeth.holmes@wsj.com
(END) Dow Jones Newswires
July 05, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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