Target ponders shifting design launches to December

Target Corp.'s design partnerships are kind of like your grandmother's precious china: you only want to break them out for special occasions.

Whether it's Missoni or Jason Wu, the Minneapolis-based retailer has perfected the art of whipping up consumer excitement by offering limited quantities of compelling merchandise.

But Target has realized success has come with a double edged sword. The very thing that makes the partnerships special, scarcity, has also bred resentment among consumers who weren't able to purchase the items.

Target has also faced some questions from Wall Street.

During last week's conference call to discuss fourth quarter earnings, an analyst asked Target executive vice president of merchandising Kathee Tesija whether the retailer might consider shifting some of its design partnership launches to early December, to help boost holiday sales.

The retailer generated a relatively poor 2.2 percent same-stores gain in December, which the company blamed on heavy discounting from competitors.

Without being too specific, Tesija suggested the company was open to such an idea.

"So you know, I can't tell you at this point what our design partnerships will look like for the back half, but we are definitely considering appropriate things that our guests would be interested in for that December timeframe where we think we can pick some more business in the gift giving categories."

Target has used its design partnerships, essentially its secret sauce, sparingly. The whole idea is not just to generate revenue but drive people to stores so they can buy other things. But balancing scarcity with demand has been a tricky proposition.

The retailer learned that lesson the hard way last fall when its much hyped Missoni collection sold out in mere hours. A faulty website and reports that some consumers snatched up Missoni merchandise only to resell them on eBay didn't help matters.

As a result, Target made some adjustments with its Jason Wu rollout earlier this year. The retailer experimented with limiting online purchases to two items on sizes and styles. An even bigger concession: offering a limited amount of additional Jason Wu merchandise on Target.com later that week.

Target is particularly sensitive about scarcity. In my conversations with the company, officials took extreme pain to stress that Target was NOT ordering more Jason Wu clothing nor was it replenishing its physical stores with the exception of product returns.