Target’s Target Market, Decided By Kids?

 

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.
TargetIt 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 inTeenage Consumer Spending 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.

 

 

 

 

 

 

 

Google Analytics: How to Know If Your Marketing is Working : Social Media Examiner

Social Media Marketing Podcast 133, in this episode Christopher Penn will talk about how to use Google Analytics to improve your marketing.

Social Media Marketing Podcast 133, in this episode Christopher Penn will talk about how to use Google Analytics to improve your marketing.

Sourced through Scoop.it from: www.socialmediaexaminer.com

Where would your brand be without Google Analytics?

5 Ways to Improve Customer Loyalty With Social Media : Social Media Examiner

Looking for ways to nurture customer relationships? Discover a five-step plan to help you boost customer loyalty with social media.

Looking for ways to nurture customer relationships? Discover a five-step plan to help you boost customer loyalty with social media.

Sourced through Scoop.it from: www.socialmediaexaminer.com

Social Media is one of the most exciting ways to build your brand and establish trust with the customer and ultimately improve customer loyalty.

Steph Curry and Kevin Durant Can Play on the Same Team and Still Sell Sneakers

Currently, one of the biggest sports news stories is Kevin Durant’s decision to leave the Oklahoma City Thunder and join the Golden State Warriors. The Warriors, coming off a record setting 73-win season, just added one of the best 5 players in the NBA to already stacked roster.

KD
Art: Bailey Brautigan, Forbes http://www.forbes.com/sites/kurtbadenhausen/2016/02/14/the-nbas-endorsement-all-stars-2016/#2db05ded5096

Durant just signed a maximum contract with the warriors worth $54.3 million for two years. Durant also makes an amazing amount of money off the court: $36 million a year in endorsements. In 2014 he signed a 10-year deal with Nike to create a signature shoe worth about $300 million. Nike pitched to Steph Curry in 2013, but funny enough, they forgot to change the name of the presentation from Kevin Durant. Curry’s father Dell was quoted by ESPN talking about that Nike pitch meeting:

“I stopped paying attention after that… They have certain tiers of athletes. They have Kobe, LeBron and Durant, who were their three main guys. If he signed back with them, we’re on that second tier.” (Strauss, 2015)

Nike offered Curry less than $4 million a year. Curry signed with Under Armour (UA) and his signature shoe became the bestselling signature shoe other than Michael Jordan (Strauss, 2015). Curry has also signed many endorsement deals Including JBL, Brita, and Degree. His off the court earnings topped $12 million for the last season (Badenhausen, 2016).

Curry
Art: Bailey Brautigan, Forbes http://www.forbes.com/sites/kurtbadenhausen/2016/02/14/the-nbas-endorsement-all-stars-2016/#2db05ded5096

Basically immediately after the news of Kevin Durant signing with the Golden State Warriors, speculation on how it would affect their shoe endorsement’s started flying.  For example, Yahoo NBA insider Adrian Wojnarowski tweeted:

I’m going to argue this isn’t true. The KDs and SCs operate in separate spheres, appealing to different segments, and are going to work together to sell a lot of sneakers and make a lot of money. The signature market can be broken into four segments by how they use basketball shoes.

User Segment:

  • Functional
    • Care about the function use of the shoes to play basketball
  • Everyday Wearers
    • Want a shoe that they can wear all the time
  • Fashion
    • Fashion forward, wear the shoes for mainly for looks and brand
  • Collectors
    • Buy lots of shoes, first releases are important, not concerned with functionality

To analyze the difference in marketing strategy from Nike and UA, let’s look at the most recent release of each player’s signature shoes: KD 9s, and Curry 2s.

Looking at Nike’s strategy for the KD 9s, they are targeting primarily functional adult users. Watch the ad Nike released July 1st 2016:

The ad shows Durant driving to the basket making defenders turn to smoke. The purpose of the ad is to try and convey how the KD 9s will help you on the court. How the shoes will make you better as a player. Wearing the KD 9s isn’t necessarily about the “KD” on the back. Nike is creating shoes that are designed by Durant to be great basketball shoes. The other video released on Nike Basketball’s YouTube page to promote the KD 9s was just a discussion between Durant and the shoe’s designer, Leo Chang. Their conversation is mainly about the functionality of the shoe and its features

In contrast UA’s approach is not about the shoe’s functionality. They market the Curry 2s only based on the brand associated with Curry’s popularity and skill. The message is more: “if you like Curry, you’ll like these shoes.”

While the first KD 9 ad had no talking, the first Curry 2 ad starred Jamie Foxx narrating as Curry shoots jumpers. He talks about how Curry changed the game of basketball. There is no mention of what makes the shoes better. No features, no claims of basketball success attributed to the shoes. Just Curry being Curry. Curry’s other breakout ad was titled “Rule Yourself.”

It depicts 1000s of Steph Curry clones practicing dribbling and ends with the tag line “You are the sum of all your training.” Again, this is a very person-centric, not a shoe-centric ad. It is about work ethic and how you as an individual have control over your destiny. UA is primarily targeting Everyday Wearers. They are trying to convince people to buy Curry 2s to look and be like Curry.

This is also apparent in how they price the shoes. KD 9s start at $150, Curry 2s are $130. UA has consistently kept Curry’s signature shoe at a lower price than many of the other signature shoes. They are targeting an audience that is buying shoes for everyday use. These consumers are budget conscious. Nike is trying to sell people on the KD 9’s functional ability. These users, if they think the shoe will be the best for them to play basketball in, will pay extra for this advantage.

Because Nike and UA are targeting very different consumers with their shoes, I wouldn’t expect a lot of cannibalization between the two. Durant moving from OKC, a small market team, to Golden State, a big market team, will probably help him increase sales. When Carmello Anthony moved from Denver to New York City he saw a jump in sales (Powell, 2016). Basketball success also helps drive revenue, and the Warriors this year have a very good chance of being good. The top 5 bestselling jerseys in the NBA last year, 4 where in the finals this year: Curry, James, Bryant, Irving, Thompson. Although Curry’s Under Armour shoes are selling like crazy, remember Nike still rules the NBA. Until Under Armour can get a few more marquee signers, it is unlikely that his success will dampen the Nike who has 75% of all NBA players under contract.

Sources:

Badenhausen, K. (2016, February 2). NBA Endorsement All-Stars. Forbes.

http://www.forbes.com/sites/kurtbadenhausen/2016/02/14/the-nbas-endorsement-all-stars-2016/#2db05ded5096

Powell, M. (2016). Sneakernomics: What Kevin Durant to the Warriors Really Means for the Sneaker Business. Maine: NPD.  https://www.npd.com/wps/portal/npd/us/blog/2016/sneakernomics-what-kevin-durant-to-the-warriors-really-means-for-the-sneaker-business/

Strauss, E. S. (2015, October 7). You won’t believe how Nike lost Steph to Under Armour. ESPN.

http://espn.go.com/nba/story/_/id/15047018/how-nike-lost-stephen-curry-armour