In a strong competitive move, Target has announced plans to introduce 12 new private-label lines in its stores, offering up appealing clothing and housewares that will only be available there. A couple of them already have made their mark, suggesting that the retailer has hit on an effective means to compete in modern markets by ensuring that its products are distinctive enough to draw people in to their local stores.

For example, Cat & Jack is a children’s wear private label that already has earned $2.2 billion in sales, just a year after its introduction. More recently, Target added a private label it calls A New Day, selling a modern aesthetic for women’s clothing with pieces featuring versatile patterns and prints. On the horizon are Project 62, which promises to make a mid-century design style available to Target consumers purchasing home goods, and a menswear line called Goodfellow & Co.

The marketing to announce these arrivals is cohesive, in that it highlights that there is “More in Store,” rather than specifically targeting any single private-label line. Seeking to ensure that customers realize what they can find under these private labels, Target is promoting them through conventional advertising channels, in-store signage, and special events. The online communications also will provide 360-degree views of the clothing on offer, so that customers can get a sense of the vast range of new product lines before they visit the store.

Part of Target’s confidence in its line extension strategy stems from marketing research that shows that young consumers are far less interested in specific, national, name brands. Thus, private-label options appeal to them, as long as the product is good, because they have no need to acquire a national brand—unlike previous generations. In turn, its announcement of the 12 new private labels sparked approximately 900 million media impressions.

In its effort to “completely reinvent the way we are developing brands and marketing those brands,” Target thus seeks to respond to changing markets and continue to appeal to various demographics of customers. Then it hopes that they come to regard the red bulls-eye as the targeted place to find just the products they want and need.

Discussion Questions:

1. What kind of product line extension is Target pursuing, and what are its reasons for doing so?
2. Will more private-label brands help Target boost its sales?

Source: Adrianne Pasquarelli, “Target Kicks Off Aggressive Marketing of New Brands,” Advertising Age, September 8, 2017