Target Executives Reveal Holiday Strategy: Digital Push, Deals 'Key To Winning The Season'
Target is planning for a very digital Christmas.
For the make or break selling season, the retailer expects 35% of online orders to be picked up in store, where 1,000 locations will double as distribution centers amid a flurry of holiday initiatives – from a new Wondershop featuring over 2,000 new products to a Spectacular advertising campaign and a mini movie starring John Legend, executives said.
Target CEO Brian Cornell, Rick Gomez, senior vice president of marketing, and Mark Tritton, chief merchandising officer, offered a sneak peek of its holiday strategy at the retailer’s New York offices today.
Let’s Make A Deal
This year, a hefty 60% of Target’s holiday messaging will tout value, as deals are the top purchase driver for the season, executives said. To that end, the chain is bringing back its “10 Days of Deals” push, which generated 5.4% year over year comp store sales gains in 2015. What’s more, free shipping on all products starts today, and will extend to January 1. “Communicating value is critical to winning the season,” Gomez said. Other holiday deal perks include $10 off $50 purchases on a special product category per week.
Target is hoping to repeat 2015’s marketing success, when the company’s messaging outperformed Amazon and Macy’s in terms of branding recognition and breaking through the advertising clutter, Gomez said. This holiday, Target is devoting 55% of its marketing mix to digital platforms from Pinterest to YouTube, and 35% to television in a bid to up its storytelling push and reach Hispanic shoppers.
The Toy Story “Spectacular,” Trolls And “Our Generation” Dolls
The retailer also offered a glimpse of its new Spectacular television spots, which tell the story of putting on Toycracker, an actual eight-minute musical that will air during the network broadcast premiere of Frozen on ABC Dec. 11, starring John Legend and Chrissy Teigen.
In the Spectacular commercials, the show’s directors, a girl named Marisol, and Target mascot Bullseye the dog, are featured backstage putting together a Broadway style production, the stars being the toys on Target’s wish list. It’s not surprising that toys get top billing in the spots: Target generates about 50% of its annual toy sales in the fourth quarter.
This year, Target’s toy mix features 1,800 proprietary products, including 50 exclusive dolls from the new Troll movie; 100 only-at-Target Star Wars items; and expanded eye, hair and skin-tone combinations from the Our Generation doll collection aimed at better representing multicultural consumers.
Modern Looks In Home And Apparel
The retailer is also building off the success of its hot home business, as well as apparel, which has posted seven straight quarters of growth. Big pushes this year in apparel and home include modern looks from Target’s exclusive Cat & Jack children’s line, on-trend faux fur and lace items for grownups, and in home products, copper barware and Scandinavian-inspired holiday décor.
Target’s Take On The “Geek Squad”?
To lift the underperforming consumer electronics business, Target is expanding its tech services to products beyond mobile devices. Target Mobile reps are becoming Target Tech reps in more than 1,500 stores and can now assist guests with all electronics. It’s also betting big on gift items such as the Series 2 Apple Watch and voice activated speaker Google Home, building on the hot connected home category.
Presidential election drama aside, CEO Cornell expects to “rise above the noise” of political uncertainty. “Unemployment is low, fuel prices are low,” as are food prices, he said, setting the stage for “a good holiday season.”