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In the low-priced retail market, Target has differentiated itself by offering trendy, fashionable merchandise. From attractive home décor to kitchen appliances, Target has become a favorite for shoppers looking for a little style at a reasonable price. But Target’s latest decisions reflect a greater consideration of the basics that customers need rather than the things they may want.

For example, Target is replacing its seasonal merchandise displays with bulk-size packages of paper towels, bottled water, and children’s t-shirts. It will transform a portion of each store into a warehouse-type area, similar to Costco—space that the retailer previously used for its Global Bazaar, which offered African-inspired wood carvings and Asian accent tables.

In the slogan, “Expect More. Pay Less,” Target is shifting its emphasis to the “pay less” portion. Especially in the post-holiday season, it seems that customers really want to save more on the basics, so the new Great Save sections will stock “treasure hunt” items, like polo shirts from Ralph Lauren and t-shirts from Calvin Klein, that will remain on shelves only until they sell out. Once they’re gone, they will be replaced with another treasure hunt item.

Customers that shop at both Costco and Target for their different needs may find that the new Target fulfills more of their needs than it did before, so they can make a one-stop shopping trip. But consumers’ current obsession with savings might not last forever; will Target be able to return in the future to its trend-focused image if the Global Bazaar is now a Great Save?

Discussion Questions:

  1. Why is Target using a warehouse club atmosphere in a portion of its store?
  2. Is it risky for Target to compete with Costco?

Nicole Maestri, “Toilet Paper Trumps Décor at Target’s Great Save,” Reuters, January 3, 2010.