Since first conceiving of Cartwheel last year, Target Corp. has adopted a cautious, almost tentative, approach to its digital coupon program. For one thing, Cartwheel represents the first major digital effort created entirely by Target staff. Plus, the process is relatively complex.
After a month into its Beta launch, Target has released some early numbers: more than 200,000 users have redeemed more than $275,000 in digital coupons. Among the products consumers mostly bought were Fresh Berries, Fruittare Popsicles, Dove Hair Care, and Market Pantry milk.
Users with Facebook accounts log into a website, where they can select from a large variety of deals, like 5 percent off Diet Coke or 10 percent off bath towels. Shoppers then purchase the items at a store, where they can redeem their deals at checkout with their smartphones. Users can also earn extra perks by recommending deals to their friends through Facebook.
When Target first previewed Cartwheel to this blogger in May, officials made clear that the program was a work in progress and they were looking for customer feed back. The retailer is especially interested in how to adjust their inventory levels with vendors to entice people with the right deals.
At first glance, 200,000 users doesn’t seem like a whole lot for a retailer which alone employs 361,000 employees. However, aside from using the news media to promote Carthwheel’s Beta launch, Target has not thrown the full weight of its marketing machine into the effort.
“200,000 sounds about right,” said Kim Garretson, a founding partner of digital marketing agency Ovative/Group in Minneapolis.
The number will likely accelerate over the next few months as the program goes viral through social media channels like Facebook.
To move along the process, Target also said this week launched Cartwheel apps for both iOs and Android-based smartphones.
The company would not disclose how many users it eventually wants to sign up. But Target is right to go it slow, said Amy Koo, an analyst with Kantar Retail consulting firm in Boston. For one thing, Cartwheel requires consumers to go through a lot of steps, she said.
“It’s not a frictionless process,” Koo said.
Target certainly knows the value of simplicity. Chief Marketing Officer Jeff Jones recently told this blogger that the failure of its holiday design partnership with Neiman Marcus—50 products from 24 designers sold at two retailers—was partially due to the complicated nature of the collaboration.
“I think simple is better,” Jones said. “Simple to understand. Simple to execute.”
Take Target’s 5 percent REDcard program. Analysts say the program works because it’s simple to understand, five percent off total purchases every time a shoppers uses the REDcard.
Done. Finito. Case closed.
With Cartwheel, Target is asking consumers to devote a lot of time and energy into a program so they can redeem relatively modest deals, Koo said.
Cartwheel could also contribute to a price perception problem with Wal-Mart, Koo said. By offering coupons on certain merchandise, Target is in fact admitting those products are more expensive at Target compared to Wal-Mart’s Every Day Low Prices.
Whether that’s true or not is hardly relevant. Once consumers perceive something about prices, it’s awfully hard to change their minds Cartwheel or no Cartwheel, she said.
Come July, local Target shoppers will see some store employees dressed in black in addition to the usual red and khaki.
These employees make up Target's new Beauty Concierge Service, which provides high level, unbiased beauty advice to consumers.
The program, first piloted in Chicago and since expanded to Los Angeles, will hit 36 stores in the Twin Cities region next month.
Ultimately, Target plans to equip 200 stores throughout the country with the service by the end of the year.
The pros and cons of global trade perhaps have never been so starkly contrasted than this week.
On Monday, the National Retail Federation and other trade groups released a report they commissioned that articulates how the United States benefits from imported goods.
A few days later, Time magazine publishes this searing photo of two workers who perished after a building hosting apparel factories collapsed in Bangladesh, killing over 800 people.
In many ways, these two publications vividly demonstrates the paradoxical world of international economics: the benefits of low cost clothing in one country can often come at the expense of another country.
Bangladesh is a poor country in southeast Asia that’s home to a multi-billion apparel industry where low cost workers make clothing for the world’s top retailers, including Wal-Mart, The Gap, and Minneapolis-based Target Corp.
By using low cost suppliers in Bangladesh and other countries in Asia and Latin America, Americans enjoy cheap prices which allow us to afford a better lifestyle, or says the NRF report:
“Imports are not the bogeyman some Americans believe them to be. On the contrary, they benefit our economy in a number of ways. They provide consumers of all income brackets with a greater variety of goods at lower prices. They constrain inflation. They encourage manufacturers to constantly improve quality and innovate while providing them with needed inputs at lower prices…It is time to give imports the credit they deserve.”
Fair enough. But the report conspicuously omits how the United States’ appetite for imported goods impacts the countries whose citizens produce them.
Target and other retailers have noted they hadn’t knowingly sold products made from the collapsed factory in Bangladesh but that’s almost besides the point.
That incident, along with a deadly fire at another factory last November, demonstrates the systematic poor conditions garment workers face throughout the country.
Target is well aware of these problems, noting that it took action in 2011 to pull out or modify buildings that presented severe fire hazards. The company says it conducts several audits, some unannounced, of its suppliers.
But these audits seem like no match for an entire industry in Bangladesh that’s beset with fire hazards and dubious building designs.
So does Target stay in Bangladesh and help change things? Or does it pull out of the country? Most of its sourcing comes from China and the Americas anyway.
Target declined to comment on its future plans. But the fact remains that retailers’ business models depend on finding cheap sources of foreign labor.
Those business models produce tangible benefits to Americans, as the NRF report notes, in the form of low prices and jobs. But it also produces photos like Time’s pic.
Well, that was certainly unexpected.
Commuters arriving at Grand Central Station in New York this morning got a full blast of Target Corp.’s Expect More motto when they encountered the equivalent of supercharged pop up store.
Called The Dollhouse, the 1,500 square replica foot of a house, complete with bedrooms, patios, and kitchen, features 3,500 items from Target’s Threshold housewares collection, including bedding, dishes, and towels.
“Putting our Threshold collection in a house would be the most natural setting to showcase the brand,” said Julie Guggemos, vice president of product design and development. “Dollhouse invites people into it to experience the product, to touch and feel it.”
Target is known for heavily promoting its exclusive collaborations with designers and musicians. But this project represents one of the retailer’s most ambitious attempts to plug a store brand, one of several private label programs overseen by Target’s sizable internal design staff.
Threshold is really an effort by Target to rebrand its home goods products. Target’s other store brands include Mossimo, Market Pantry, and Archer Farms.
Planting the store smack in the middle of Vanderbilt Hall during rush hour probably required Target to pull a few strings so to speak. Fortunately for Target, the retailer sponsored Grand Central Station’s 100th anniversary celebration.
Workers built the Dollhouse in Queens and then moved the structure to Grand Central where it took them three days to assemble it.
In a further nod to Target’s focus on multi-channel retailing, the house carries about two dozen products shoppers can purchase by using their smartphones to scan a QR code. Target.com will later ship the product.
The Dollhouse will remain up until Tuesday.
No blurry vision here. Target Corp.’s exclusive release of Justin Timberlake’s special edition “20/20 Experience” has been an unqualified success.
Though the retailer would not disclose specific figures, Target did say first week sales places it among the company’s top three best selling albums of the decade. JT also became Target’s best selling male artist since 2002. (He failed, however, to overtake Taylor Swift’s “Fearless” as Target’s best selling first week album of all time.)
Target certainly rolled out the red carpet for JT’s first album in six years. ABC aired a well received commercial created by Target immediately following JT’s performance at the Grammy Awards. Target also threw an elaborate party and concert in Los Angeles on the day of the album’s release last month.
But lost in the hoopla is the album’s content, specifically the hit single “Suit & Tie.” The song contains six references to a swear word that sounds like ship. Rapper mogul Jay-Z, who pops up in the middle of the song, contributes a derogatory word commonly associated with African Americans.
Here are some of the lyrics:
I be on my suit and tie, s*** tie, s***tie (Repeats several times)
D'usses on doubles, ain't looking for trouble
You just got good genes so a n*** trying to cuff you
This blogger is not personally offended by the lyrics. But what’s remarkable about “Suit & Tie” is how these words have slipped into mainstream America in recent years without barely a howl.
And it doesn't get any more mainstream than Target.
“Target’s approach is to support the creativity and artistry of our music partners and the way they choose to present their music,” Target spokeswoman Katie Boylan wrote in a statement.
“As we seek out partners, there are a number of things Target considers, including how the artist's music may resonate with Target's guests,” she said. “We also look at how their past albums have performed in the general market and at Target, as well as broader industry trends.”
It didn’t seem so long ago when Tipper Gore, who co-founded the Parents Music Resource Center, urged Congress to pass a law requiring record companies to slap warning labels on songs that contain “objectionable content.”
Today the record company and artist, working with the Recording Industry Association of America, ultimately decides whether an album requires a “Parental Advisory Warning.” (PAW)
Target said it defers to the industry for PAW warnings.
Wal-Mart, Target’s chief rival, outright bans any album with the PAW label. The retailer also said “it occasionally may refuse to stock music merchandise that may not seem appropriate.”
20/20 Experience does not carry a PAW label and both Target and Wal-Mart sell the album.
Part of the reason is context. “Suit & Tie” is a fairly benign song. And JT is a an artist with a clean cut reputation along the likes of other Target-affiliated artists like Tony Bennett, Swift, Beyonce (Jay-Z’s wife), and Michael Buble.
But then again, the pop band Maroon 5 is not exactly a hard core act. (Lead singer Adam Levine is a guest judge on NBC’s The Voice for Pete’s sake!) The group’s “Overexposed” album features a PAW label, mostly because of the F-bombs found in the song “Payphone.”
For the record, Target does sell the original version of Overexposed. Wal-Mart will only sell the edited version of Overexposed. So by these standards, s*** and n***a are acceptable but f*** is still out of bounds.
Ron Johnson can be rightly credited with reinventing retail twice: first as the Target executive who helped create its “cheap chic” persona and second as the Steve Jobs’ co-partner behind Apple’s famed retail stores.
So why couldn’t Johnson work his old magic on JCPenney? The answer is relatively simple: JCP needed a turnaround guy, not a reinvention guy.
“Mr. Johnson apparently thought JCPenney and Apple were on equal planes…and boy, was he wrong,” said Robert Pasikoff, president of Brand Keys in New York.
Turnaround and reinvention are not necessarily the same things. For one thing, reinvention is best done from a position of strength. If you are going to take big risks, best you have deep reservoirs of cash and good will to draw upon.
Apple and Target were already successful companies when Johnson worked there. His ideas helped keep them on top.
JCP was entirely a different matter. Growth was stagnant. Shelves were messy. Identity non-existent. But all for its problems, JCP was a a financially stable company with a core group of loyal customers.
That may not exactly fire up the Wall Street bulls but at least it’s something. Problem is, Johnson didn’t see much in the old JCP worth preserving.
Johnson’s biggest move was to immediately scrap the coupons and weekly clearance sales that its customers had grown accustomed to.
The reasoning was sound. To constantly discount your merchandise means to constantly cheapen your brands and your stores.
But to quickly eliminate those deals is akin to forcing a drug addict to go cold turkey. The results are messy.
“We told him it was silly, that he was trying to do too much too quickly,” said a former top retail executive who advised Johnson and some JCP board directors.
He requested anonymity so he could openly discuss private conversations.
“Try it out in 30 stores but for God’s sake, don’t roll it out all at once,” he said. “You have to retain the core customers. If you take something away, you have to give them something else.”
It’s easy of course to second guess a freshly fired CEO. But retail is a very conservative business. Customers don’t change overnight simply because you want them to.
Despite Johnson’s pedigree, he probably needed to rack up a few decent quarters or perhaps a year before making such a bold move.
That’s not to say a CEO can’t think big. But that CEO should probably have an equally big cushion should his big idea fails.
Jobs, after all, blew it with Apple TV. And Target CEO Gregg Steinhafel misfired with the retailer’s holiday partnership with Neiman Marcus.
Both men not only kept their jobs but pundits praised them for taking risks. Because years of stellar performance should count for something.
Johnson’s credentials will probably earn him a shot at another retailer.The big question is whether that retailer needs a turnaround specialist or a reinvention guru.
Johnson, at least right now, fits only one of those labels.