Target’s comeback has been built on the key pillars that helped the company earn its “Tar-Jay” reputation as a hip but affordable place to shop.
That’s something the company has returned to as it looks to win back lapsed customers and move the narrative away from the so-called culture wars.
“We’re putting style, design and value at the center of everything we do,” the company shared in a March 3 press release.
The chain also shared its plans to stay a step ahead of its rivals in the affordable apparel space. Key priorities included:
- Maximize our in-house design capabilities and trend-tracking technology to bring new styles to consumers faster.
- Lead with great denim and everyday essentials, with seasonal styles and frequent partnerships driving year-round newness.
That strategy has been working, as the chain reported strong sales in its most recent quarter.
“Second quarter net sales grew 5.3% over last year, with comparable sales growth of 3.8% driven by a 3.6% increase in comparable traffic,” its Q2 earnings release shared.
Those are encouraging numbers, but a new effort from Walmart could derail those efforts.
Walmart launches a fashion brand
Target has built its apparel business around owned-and-operated brands. These are brands the retailer owns, giving it greater control over product development, pricing, and merchandising without sharing revenue with a third-party brand.
Now, Walmart has made an aggressive move into the women’s fashion space with Scenario, “a new women’s fashion brand bringing a romantic, modern bohemian point of view to customers at an incredible value,” the company shared in a press release.
Available now in Walmart stores and on Walmart.com, the 280-piece collection spans apparel, shoes, jewelry, handbags, and accessories, with the vast majority of items priced under $25.
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“Scenario combines feminine silhouettes, vintage-inspired prints and rich textures with versatile pieces designed for everyday life. Think airy blouses, printed dresses, lived-in denim, braided flats and accessories finished with fringe, tassels and artisanal details, all with the style, quality and extraordinary value customers expect from Walmart,” the company added.
Walmart has a clear reason to launch Scenario, according to The Wall Street Journal’s Sarah Nassauer.
“It is part of Walmart’s latest attempt to become a fashion destination for more Americans. Right now many Walmart customers buy their groceries at the chain, but buy clothing elsewhere,” she wrote.
Scenario, she noted, could help the chain sell clothes to a new group of customers.
“Those who do buy clothes are often purchasing basics at low prices — simple T-shirts or leggings — and the women who shop its largest brands tend to skew older. Increasing fashion sales may help the company reclaim ground it has lost to Amazon over the past several years,” she added.
Walmart
Walmart wants more from its customers
The challenge for Walmart is getting customers to move from its low-margin grocery products to more profitable areas.
GlobalData Managing Director Neil Saunders thinks the chain might be able to make that happen.
“Walmart hasn’t suffered from customer defections; on the contrary, it has held on to the vast majority of customers that joined its ranks over the past few years. The opportunity, however, is to get more of these customers to convert from grocery into non-food, including fashion,” he wrote on Retailwire.
Scenario may be able to do that.
“Does it stand a chance? Yes. We can see in our data that Walmart has made good progress in apparel over the past few years and it has moved from a place where folks went to get basics to one that serves a wider variety of needs,” he posted.
Georgeanne Bender, a leading retail consultant, doesn’t think the clothes are the issue.
“Walmart’s problem isn’t what it sells, it’s how it sells it. Even Chanel would look bad crammed on a 7′ fixture. The apparel departments need a visual merchandising tweak,” she shared on RetailWire.
Gary Sankary, another RetailWire Brain Trust member, actually thinks Target has shown Walmart how to make people think of the chain for items that go beyond cheap basics.
“To uplift that perception, they need help. They need credibility from the fashion world to change how shoppers see them. Their competition, Target, has been particularly good at this over the years: designer collaborations, buzz‑worthy collections, hosting events. Those things resonate with aspirational fashion buyers and add credibility to the offers,” he wrote.
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