Sam Walton once said “There is only one boss. The customer. And he (she) can fire everybody in the company from the chairman on down, simply by spending his (her) money somewhere else.
It is a rough time in the mass merchandiser sector. Consumers are migrating away from brick and mortar stores like Target seeking the efficiency and flexibility that online shopping provides. Why spend the time schlepping your kids to the mall or shopping center just to shop for school clothes for your children. Most parents dread fighting traffic, the crowds and adding one more weekend task to their already chaotic life. If your family is kid centric like mine, then you can find a dozen reasons why buying junior’s new shoes online from an online retailer like Amazon or the direct to consumer (DTC) webstore from Nike is appealing.
So why would Target focus on the very reason why I don’t want to go their physical store? The answer is simple follow the dollars, teen related purchases account for $117.6 billion in US discretional spending. Target estimates that the youth related purchases account for $25 billion in high margin annual sales. Target realizes that getting kids to buy in to the Target brand of hip, funky, cool clothing will provide the
The answer is simple follow the dollars, teen related purchases account for $117.6 billion in US discretional spending. Target estimates that the youth related purchases account for $25 billion in high margin annual sales. Target realizes that getting kids to buy in to the Target brand of hip, funky, cool clothing will provide the differentiation from their physical and virtual competition.
So off to Target we go… but wait… how do you get kids to follow the plan? Well, this is where it gets tricky because most 10+ year olds can smell a gimmick 100 yards away. During the recession Target lost the bubble on what made them special, they began to differentiate with lower prices, which any marketing class student will tell you is an unsustainable strategy. This was evidenced by their slogan “Expect More. Pay less” however consumers perception of Target indicated that shoppers felt that they were paying more for less.
After years of declining sales Target remembered its secret sauce. To re-capture market share they need to generate sustainable brand differentiation by catering to the wants and desires of their target market (youth). This is dangerous territory because today’s youth can be fickle if they feel pandered to, Merchandiser’s must genuinely seek out their input and then deliberately integrate preteen and teenager input into their product plan. (kids today are inherently suspicions of institutions) and can be very vocal of their displeasure if they feel slighted. Based on their focused research they discovered that kids want to be unique but not different. So how do you walk that fine line. Easy…. Like Target you have kids draw it. Currently, Target engages with close to 1,000 kids ages 4-12 nationwide developing one of their signature brands.
Most retailers conduct research on kids. Target on the other hand integrates kids in the entire process. Kids are advising the clothing designers, helping produce multimedia ads and informing merchandisers of store physical layouts. This approach can sometimes become contentious because well this shouldn’t be a news flash but spoiler alert kids and adults don’t always see eye to eye. So why bother with all this drama? Well Target realized that in order to capture the hearts and minds of the decision making unit they needed to increase the odds. Kids today have a significant sway in consumer purchasing decisions.
Target experienced a shift in its typical consumer from a boomer mini-driving suburbanite mom to an urban ethnic millennial. Target’s strategy is to develop products & marketing material that appeals to the parent’s projection of love while still satisfying the youths need to express themselves. This is a marketing play on Maslow’s hierarchy of needs focusing on the desire for love and belonging.
The school lesson for the day is not to follow the fashionable trend in both business and apparel purchase. This may seem counterintuitive but is it pure genius when you think about it. If you spend all of your time chasing the latest management or marketing fad you may miss the big picture strategy of chasing your consumer which in the end is what the retail game is all about. Paraphrasing Sam Walton “your customer will spend their money somewhere else” if you don’t pay attention to them. So if your consumer wants to buy online and pick it up in the store give it to them. If your customer wants a fun shirt that works for both girls and boys then produce it. So what do you want? Well, if you are like me you want a kid that feels confident in his own skin, one that sticks out from the crowd just enough to be recognized but not bullied and you want value because why should we spend a ton of money on a t-shirt that will get stained or out grown before it goes out of fashion.