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Will Target’s Exclusive Offerings Drive Its Top Line Higher?

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Exclusive brands generate strong sales

One of the key catalysts behind Target’s (TGT) top line returning to growth is its focus on differentiated product offerings. These exclusive “only-at-target” brands generate strong growth, besides strengthening its product portfolio. For instance, the company’s kids-oriented brands including Cat & Jack and Pillowfort continue to witness strong demand. The company’s kids clothing brand, Cat & Jack, went on to generate more than $2 billion in sales in the first year of its launch.

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A look at new brand launches

Besides Cat & Jack and Pillowfort, the company’s other exclusive brands including Cloud Island, Isabelle, Goodfellow, A New Day, JoyLab, and Project 62 are also resonating well with shoppers and are expected to generate strong sales.

In January 2018, Target launched Universal Thread, a denim-based women-centric lifestyle brand within the price range of $5.00 to $39.99. Universal Thread is priced approximately 10% below the company’s current offerings. More recently, Target unveiled Opalhouse, its new “eclectic” home brand with a wide variety of furniture, bedding, and home décor items mostly under $30.

Alongside its own home brands, Target entered an exclusive partnership with Magnolia and launched Hearth & Hand, a home and lifestyle brand with items ranging from $0.99 to $129.99. Most of these products are priced under $29.99.

The company’s value pricing and wide varieties are expected to accelerate its sales in coming quarters. However, competitors aren’t sitting idle. Recently, Walmart (WMT) offered a glimpse of its redesigned home shopping page on Walmart.com and is focusing on exclusive brand launches and its revamped website aimed at driving its e-commerce sales higher. Meanwhile, Amazon (AMZN) has also ramped up its home furnishing offerings.

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