Can The Santa Experience Save Brick-And-Mortar Retail This Holiday Season?

Can The Santa Experience Save Brick-And-Mortar Retail This Holiday Season?

This is a quaint idea, but as the data published by ShopperTrak for Black Friday 2019  showed there is no putting the digital shopping genie back in the bottle, especially not after companies like Target and Walmart have ramped up their digital commerce efforts to battle Amazon.

Some holiday traditions are easy to explain — things like wrapping presents, drinking hot chocolate and baking cookies are all neatly summed up with the knowledge that the vast majority of people like opening presents and eating cookies.

Source: Can The Santa Experience Save Brick-And-Mortar Retail This Holiday Season?

Doubling Down on Digital Infrastructure Thematic Leader

Doubling Down on Digital Infrastructure Thematic Leader

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Adding two Middle-class Squeeze call option positions ahead of earnings this week

Adding two Middle-class Squeeze call option positions ahead of earnings this week

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Weekly Issue: A Number of Our Thematic Leaders Well Positioned for the Holidays

Weekly Issue: A Number of Our Thematic Leaders Well Positioned for the Holidays

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Targeting the Middle-class Squeeze, Target unveils Smartly, but will it work?

Targeting the Middle-class Squeeze, Target unveils Smartly, but will it work?

 

When a company brings out a new product line, more than likely it is looking to tap into a demand channel in order to grow revenues, its consumer base or both. What we see with the new consumer staple brand, Smartly, that is being launched by Target is an attempt to catch the tailwind associated with our Middle-class Squeeze investing theme. That theme focuses on cash-strapped consumers that facing tepid wage gains or rising costs and pressured disposable income are changing where they buy the products they need and in some cases sacrificing well-known brands for more affordable prices. It’s what made the Dollar Shave Club such a thorn in the side of Proctor & Gamble’s Gillette razor and razor blade business.

With Target, odds are they are trying to use Smartly to lure cost-conscious shoppers back into their locations, hoping it can convert the traffic into buyers of other items. It sounds a lot like the loss leader strategies of yore, but even in those cases the question is will the traffic (if it comes) convert to buyers? The jury is out on that for now.

 

Target Corp. is wading into a new territory: $1 toiletries.

The Minneapolis-based retailer said it is planning to launch a new brand for consumer staples called Smartly with more than 70 products, including razors, toilet paper and dish soap, mostly priced under $2. The products will be offered at stores and online in mid-October.

Mark Tritton, Target’s chief merchandising officer, said the new line of consumer staples is an attempt to compete with generic brands at drugstores and discount chains. “It’s about showing people that I don’t have to go to Aldi or I don’t have to go to Dollar General to find what I’m looking for,” he said in an interview.

Meanwhile, the market for generic consumer staples has become more crowded. Last year, Brandless, a San Francisco-based startup, began selling staples such as fluoride-free toothpaste and dish soap, priced at $3. German grocer Aldi has also been opening more locations in the U.S. and gaining traction by selling a pared-down selection at rock-bottom prices.

The competition has forced players such as Walmart to revamp their brands. In 2016, the big-box chain scrapped a discount store brand in sparse blue packaging called Price First as part of a wider reworking of all its private-label products. The company now sells its lowest-priced groceries under Great Value and toiletries under Equate, with boxes and bottles more reminiscent of traditional brands.

Source: Target’s Answer to Discounters Is an Even Cheaper Store Brand – WSJ

Target adds AR, but still focused on stores

Target adds AR, but still focused on stores

Target has been one of those retailers that in our view has been lost between the shift to digital commerce offerings from Amazon (AMZN) and club/warehouse ones from Costco Wholesale (COST) and others. What we find interesting is how Target continues to baby step its way into the Connected Society with GPS maps being deployed for its stores and augmented reality (AR) applications for certain products.

Then again, when a CEO continues to focus the business model on the old way of doing business – retail sales in stores – rather than the business model that consumers are embracing (as evidenced by the monthly retail sales data), it’s bound to be messy. Change is hard, especially given Target’s store count, but Costco and Walmart (WMT) have found digital religion, why not Target?

Target is taking on the beauty market, bringing in augmented reality (AR) to develop its Target Beauty Studio.

A collaborative project with Perfect Corp.’s YouCam Makeup app will allow customers in 10 stores the opportunity to “try on” different shades of makeup using a digital screen before they make a purchase. While Target plans to bring the technology to more stores this year, it still plans to offer in-store beauty experts.

The news follows comments from , who has said he still believes the brand’s brick-and-mortar stores are central to its strategy — even with increasing eCommerce sales.“The winning retailers of the future are going to combine great physical assets with the ease that comes along with that digital interaction,” Cornell told CNBC in February.

“For the foreseeable future, the majority of U.S. retail sales will still take place at stores,” according to Target CEO Brian Cornell.

In addition to investments in its stores, Target has been rolling out delivery services in Florida and Minnesota after acquiring Shipt in 2017.  The purchase “significantly accelerates” its digital fulfillment efforts, the company said at the time, and could bring same-day delivery to approximately half its stores in early 2018.

Source: AR, Men’s Products Come To Target’s Beauty | PYMNTS.com