Retailer of the Year 2021: Target
Record-breaking sales growth upon record-breaking sales growth: that’s how Target’s described the last two years, with owned brands playing a significant part. In fact, in the second quarter of 2021, sales of the retailer’s private brands outpaced all company growth, seeing a year-over-year sales lift in the “mid-teens.”
In Q2 this year, Target’s total sales were up more than 30% or $6.6 billion on a two-year stacked basis. The retailer said in March, regarding its Q4 2020 financial results ending Jan. 30, 2021 that owned brands represented a third of its sales, with four brands eclipsing $2 billion in sales (Cat & Jack, Up & Up, Threshold and Good & Gather).
Owned Brand Leadership
Some hallmark moments:
• A New Day, launched in 2017, the brand reached $1 billion in sales by its first anniversary;
• Cat & Jack, launched in 2016, surpassed $2 billion in 2017;
• Good & Gather, launched in 2019, the food line made its first billion in 2020;
• And in February, All in Motion, Target’s new activewear line reached $1 billion in sales, making it the 10th owned brand to do so.
The chain developed a new vision for its owned brands five years ago that blended art and science, listening closely to its guests for insights and empowering its design team of artists.
“When we set out to create new brands or design products within existing brands, it always starts with our guests. Our talented design team creates products with — and for — our guests with a keen eye on exceptional design at an incredible value,” Julie Guggemos, SVP, chief design officer, owned brand product design and management, told Store Brands. “They all play a distinct role in our total portfolio, anchoring intently to our unique guests’ needs and values like inclusivity, sustainability, quality and incredible value for all.”
The retailer doesn’t just say it’s going to represent more voices, it’s doing the work — and through its store brands. In total, Target wouldn’t share how many suppliers it works with within its private brands but said suppliers play an integral part in how they innovate. The retailer said it looks for suppliers that bring ideas to the table as a way to maintain the style and feel that guests have come to expect.
Like all retailers, the peak pandemic period pressured Target and their suppliers to keep shelves stocked across the store, and they’re still working together against new challenges. “During a time that has had a profound impact on our guests and communities, the Target team has remained agile and thoughtfully curated a magical mix of products to meet their needs but also brought them joy when they need it most,” Jill Sando, EVP, chief merchandising officer, told Store Brands.
She added: “From the strategic partnerships we create, to the beloved national and DTC brands we bring to our assortment, our owned brands play a key role in continuing to differentiate Target. Our portfolio of owned brands brings something special to every category, driving traffic and excitement with the incredible design and value found exclusively at Target."
A Circular Future
The last major pillar of why Target has emerged as the 2021 Retailer of the Year is its commitment to using owned brands to drive a sustainable supply chain and eco-friendly future. In June, the retailer rolled out Target Forward, a broad sustainability pledge that includes a call to have 100% of its store brand products be designed for a circular future within the next two decades — eliminating waste, leveraging regenerative and recycled materials, sourcing responsibly, and creating products that are durable that can be easily repaired or recycled.
“This sustainability strategy reaches every corner of our business and sets our aim to be a market leader in creating and curating inclusive sustainable brands and experiences by 2030 and a net zero enterprise by 2040,” said Hennington. “From fostering an equitable, sustainable supply chain to designing and elevating sustainable brands, our commitment will take our owned brand portfolio to the next level and fuel continued growth.”
Through its store brands, Target will strive to design owned brand items that meet what its shoppers are looking for but also to reach a circular future, eliminating waste, sourcing sustainably and more. Just as it has elevated owned brands, the next chapter will include elevating sustainable brands.