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Richard Lambertson and Suzanne Cassano stand next to a sample of signature decor and accessories from their store Privet House, which Target introduced as a partner in its new design program The Shops At Target, Thursday.

Bebeto Matthews, Associated Press

Robert Van Sickle, right, and Deb Gregg display item s from their dog boutique Polka Dog Bakery, which Target introduced as a partner in its new design program The Shops At Target, Thursday, Jan. 12, 2012.

Bebeto Matthews, Associated Press - Ap

Target enlisting boutiques to create stores within stores

  • Article by: THOMAS LEE
  • Star Tribune
  • January 12, 2012 - 9:39 PM

NEW YORK - Target is attempting to transform retail. Again.

The Minneapolis-based retailer, which pioneered exclusive design partnerships more than 10 years ago, is taking the strategy to a whole new level.

At an elaborate media event in Chelsea's trendy Meatpacking District, Target unveiled on Thursday its "The Shops at Target" concept, which will showcase limited-edition merchandise from five boutiques across the country. The initial items, priced from $1 to $159, will feature everything from dog biscuits and candy to dishes and clothes.

The first exclusive boutique collection will debut in May for a six-week period. In the fall, products from another group of boutiques will be featured for a limited time at Target's 1,754 stores.

"We want to bring these [boutiques] to life through our stores," said Stacia Andersen, senior vice president of Target's home division.

Such an elaborate store-within-a-store approach is rare in big-box retail. Department stores routinely provide stations for such specialty products as Coach and Burberry, but Target is expanding the strategy with a rotation of successful boutiques.

In essence, major retailers "are becoming mini-malls," said Robin Lewis, CEO of the Robin Report, a newsletter that tracks the retail industry. In addition to announcing the boutique partnerships, Target confirmed Thursday it will work with Apple Inc. to test mini-Apple stores in 25 Target outlets this year.

In a way, "The Shops at Target" is a twist on the sometimes uneasy relationship between mass merchandisers and small businesses. Instead of a big box putting a small shop out of business, Target is counting on these boutiques to inject new energy into its own.

Competition watching

With its new concept, Target is seeking to reclaim its reputation as a pioneer in exclusive design partnerships, which began in 1999 with its line of Michael Graves products. Since then, retailers ranging from J.C. Penney to Kohl's have copied the strategy.

"Our competitors have taken notice," said Brian Robinson, Target's director of fashion and design partnerships.

As a result, experts say, Target's exclusivity has lost a bit of ... exclusivity.

The Shops at Target is expected to deliver a fresh, smart update on design partnerships that will be more difficult to emulate, said Carol Spieckerman, president of retail consulting firm newmarketbuilders. By grouping the boutique products under the Target brand, the retailer can enjoy the flexibility of being able to recruit a wide variety of stores.

Products from the boutiques will showcased prominently in the Target stores. At Target.com, the merchandise will be grouped under The Shops at Target and will feature documentaries that explain the merchants' stories.

Richard Lambertson, co-owner of Privet House, said he was unaware Target was scouting his store, which sells antique furniture, artwork and home furnishings.

Target "was like the FBI," Lambertson said. "They knew about us before we knew about them."

Diane and Brian Campbell, who own the Candy Store, said they are confident Target can effectively market their products to a national audience. "They're going to take us seriously," Brian Campbell said.

While the boutiques should create some buzz for Target, the concept is complex and carriers some risk, experts say. Not only must Target constantly juggle inventory from the different boutiques, the retailer must also market those local products to a national audience.

In other words, what might sell well at a boutique in Boston might not succeed in Arizona.

"It's a little more complicated," said Target's Andersen. "Each of the shops has a distinct clientele at the end of the day. But the products are fantastic and will translate across the United States."

Thomas Lee • 612-673-4113

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