• Retail Dive

Target debuts Cat & Jack baby box subscription service

Dive Brief:

· Target on Thursday announced the launch of a new boxed service for Cat & Jack baby clothing. The boxes, which can be ordered as a quarterly subscription at the start of a new season or as a single order, are available in "limited quantities while supplies last," according to a post on the company's Bullseye blog. The next box is available in April.

· Each box is fixed at $40 and filled with six to seven apparel items that have not yet debuted in stores. Products range from bodysuits and leggings to rompers and a special rotating gift, with sizes available in newborn through 24 months. Unwanted items can be returned online or in stores for the value of the individual product, the company said.

· The new service is one of many ways the company is looking for growth. As Target continues to make significant physical and digital investments, CEO Brian Cornell on Wednesday told CNBC on Squawk Box that, "The winning retailers of the future are going to combine great physical assets with the ease that comes along with that digital interact." That said, for the "foreseeable future" he acknowledges that most sales will still occur in stores.

Dive Insight:

These days nearly everyone, from upstarts like Stitchfix to e-commerce behemoth Amazon, is getting into the apparel subscription game, and now it's Target's turn to play with one of its most popular private label brands.

But retailers considering getting into the subscription business should know it's not a magical money-making solution. Making the model work requires a keen understanding of the core consumer and a killer design team to curate the latest styles.

As Nicholas Hodson, principal at global consultancy Strategy&, told Retail Dive last year, "a subscription is the ultimate test of your merchandising skills." But Target, known for its "cheap chic" flair, is confident that consumers will delight in items "handpicked" by its designers.

In fact, the company has doubled down on its design team over the last year, relying on them to dish up compelling and unique products for over 12 private label lines that cater to various lifestyles. Opalhouse, an "eclectic" and artistic home decor brand, will be the latest private label brand to debut beginning in April.

The Cat & Jack box adds to the company's existing beauty box service (which is currently sold out) and a strategy that banks on the thought that customers "love convenience and discovery." These two sentiments certainly make subscription or boxed services in general a good fit, however launching such a service comes with its fair share of challenges.

"For retailers, subscription services ensure there is a steady monthly revenue coming from the customer," Julia Fowler, co-founder of retail and fashion technology company Edited, told Retail Dive last year. "However, the disadvantage is that with so much competition in the market, brands continually need to assess their price points, assortments, and ability to meet the customer’s needs, lest the consumer cancel or choose to go to another retailer."

Boxed services are only one of many ways the company is looking to remake its "Tarzhay" image into a brand that is convenient and stylish both in stores and online. Regardless of channel, Cornell this week told CNBC his goal is "to make Target the easiest place in America to shop." While subscription boxes certainly won't be the crux of such a strategy, the mass merchant can't afford to sidestep these kinds of growing trends

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