This is an excerpt from a story delivered exclusively to Business Insider Intelligence E-Commerce Briefing subscribers. To receive the full story plus other insights each morning, click here.
Target has been inviting certain third-party brands to sell on its website as part of its new initiative entitled “Target +,” according to CNBC. The program is invite-only for brands and will hold sellers responsible for shipping, though Target will accept returns in-store. Early participants include sporting goods company Mizuno and electronics company Casio.
Business Insider Intelligence
The retailer is looking to grow its online product selection, just like Walmart is doing, to become a more attractive e-commerce destination. Having more products from a variety of brands can bring more consumers to a marketplace since it’ll be more likely to have the products shoppers want; this strategy is key to Amazon’s success.
Likewise, Target’s and Walmart’s moves to bring in more sellers could win over new consumers and increase basket size from its existing customer base.
Target’s decision to make Target + invite-only for sellers, for the time being at least, can set it apart in both positive and negative ways.
- Curating Target +’s assortment allows Target to tailor the program to its shoppers’ interests. Target has been keeping an eye on which product categories its shoppers are searching for, helping inform its decisions about which segments it should expand into and, in turn, which brands to invite to the service. This process can help make all of the products on Target.com appealing for consumers if Target understands what its shoppers are looking for correctly. Additionally, the retailer doesn’t have to deal with lesser products or brands bringing down perceptions of its quality.
- Making Target + invite-only prevents the retailer from building a massive selection that can rival Amazon’s and Walmart’s. Target can’t amass the number of sellers and products on Amazon’s and Walmart’s marketplaces by selecting each individual brand, so consumers may be less confident that Target.com will have what they want. Allowing sellers to sign up freely would cause Target’s selection to grow much faster, but it’s unclear if that’s what it wants.
Target is also continuing its private label push, which complements its efforts with Target + to build out its assortment with quality products. The retailer is launching three new brands in the lingerie and sleepwear categories, adding to its stable of private labels that spans a number of product segments.
Adding products through exclusive labels is another way for Target to extend its reach to new segments its consumers want, and between this strategy and Target +, the retailer has the capability to grow its selection quickly and effectively.
Interested in getting the full story? Here are two ways to get access:
1. Sign up for the E-Commerce Briefing to get it delivered to your inbox 6x a week. >> Get Started
2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the E-Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
See Also:
- Target is taking a page out of Amazon’s playbook — but it could face some challenges
- Target is accelerating the lingerie wars with bras that cost under $22
- Walmart and Garnier are piloting an in-store personalization tool
Source: Business Insider – dkeyes@businessinsider.com (Daniel Keyes)