Dive Brief:
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In one of the first tests of its turnaround under newly arrived CEO Michael Fiddelke, Target on Wednesday unveiled a slew of back-to-school offers, including 50% off an annual Target Circle 360 membership, the paid version of its loyalty program.
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A limited-edition collab with LoveShackFancy aimed at teens and tweens debuts July 5, and other tie-ups include Overtime, Poppi, Owala and Abercrombie & Fitch Co.’s Hollister brand.
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This year more than 50% of the back-to-school assortment is new, with exclusive apparel, school supplies, dorm decor and other items. Target has also added school uniforms to its All in Motion activewear private label.
Dive Insight:
For those looking to save money, which in this economy spans income levels, the red-letter events like Amazon Prime Day and Target’s Circle Deal Days could have more consumers looking for school supplies earlier than they have in past years.
Target’s summer sale was moved up by a month compared to last year, likely to compete with Amazon’s sale.
For Target, back-to-school season could serve as a test of a turnaround that seemed to show some early success this year. In its most recent quarter, net sales rose nearly 7%, traffic was up over 4%, and the retailer saw growth in all categories — an improvement over last year’s declines in financial performance and customer experience.
Most U.S. households get their back-to-school shopping done at least two weeks and as many as two months before school starts, according to research released Wednesday by PwC. Last year more people than ever looked for deals before summer started.
Cara Sylvester, chief merchandising officer at Target, said the retailer’s back-to-school assortment has “more trend-forward style, great design and unrivaled value than ever before.” This could resonate with the third or so of parents that told PwC that their kids want name-brand or trend-driven items.
Nearly 60% of parents say their child’s preferences influence them, but practical considerations rule, according to PwC’s report. Over half the purchases come from lists provided by schools and over half are guided by deals and discounts, those researchers found.
Analysts are watching for signs that Target’s progress so far this year has legs.
“While Q1 suggests early traction and nice traffic growth, getting that returning lapsed guest reinforces that this will be a multi-quarter ‘show me’ narrative,” Jefferies analysts led by Corey Tarlowe said earlier this month.
