Target on Tuesday announced a partnership with global corporate venture firm BCG Digital Ventures to conduct a 14-week "innovation sprint," where their experts (including designers, engineers and investors) will work with five Target team members to develop a portfolio of new growth efforts, according to a company blog post.
The five team members are working out of Digital Ventures’ centers in New York and Los Angeles, the company said. This week, they’re split into groups doing immersive customer behavior research in six cities nationwide. Each group has a mix of Target and Digital Ventures employees, including ethnographers, venture capital investors, product managers, designers, engineers and growth specialists, among others.
The retailer also revealed on Tuesday a home and lifestyle brand designed with Chip and Joanna Gaines — the duo behind Magnolia and the hit HGTV show "Fixer Upper."
Target’s work with BCG is part of an attempt to shift its innovation focus from futuristic pilot projects and long-term visions to programs, ventures and growth opportunities that can have a nearer-term impact on the retailer’s core business. Chief innovation and strategy officer Casey Carl left the retailer in May and Minsok Pak took up the role of executive vice president, chief strategy and innovation officer this week.
Carl accomplished quite a lot in his two-and-a-half years at Target, lending the retailer an innovative mindset and an air of entrepreneurial spirit. He was a guiding force behind Target's LA25 "store of the future" program, along with a vertical farming initiative, the Target + Techstars accelerator program and other efforts. Pak seems to be a continuation of that innovative mindset.
"From an innovation perspective, Target's most important business objective over the last four years has been to evolve to meet the changing digital needs of its customer," Matt Sargent, senior vice president of retail for Frank N. Magid Associates, told Retail Dive via e-mail. "Given that Target's customers have flocked to Amazon's Prime and Prime Now options at high rates indicates that this business objective has not been met."
Target will leverage the new products and businesses that come out of the partnership "to explore new and compelling business cases that are natural extensions of our brand and expertise, and support Target’s strategic priorities," the company said. “This is a unique partnership with tremendous potential — and we’re excited about the passion, inventiveness and entrepreneurial commitment being brought to bear from Target and Digital Ventures," BCG Digital Ventures partner Anthony Koithra said in the blog post.
Meanwhile, the launch of Hearth & Hand with Magnolia is part of Target’s concerted effort to double down on exclusive brands and designer partnerships. The mass merchant plans to unveil 12 new private label lines in apparel and home to cement its "Tar-zhay" image, a key differentiator that helps offset the price war the retailer and its rivals are in when it comes to grocery and consumables.
"In a retail environment where differentiation has never been more important, we’re doubling down and introducing more than a dozen new brands to provide guests with even more reasons to choose Target,” Mark Tritton, Target executive vice president and chief merchandising officer, said in the post. "Partnering with Chip and Joanna to create a modern farmhouse collection available only at Target allows us to offer an aesthetic we know our guests will love, and the quality and affordable prices can’t be beat. That’s the magic of Target, and we can’t wait for our guests to enjoy this collection for years to come."
The brand is a multi-year effort rather than a limited edition like many of the retailer’s other lines and features more than 300 items including tabletop, home décor and gifts. It comes just in time for the holidays with most items under $30. The brand is also positioned to work alongside Target’s community giving efforts. Magnolia will work with Target House at St. Jude Children’s Research Hospital to redesign its dining room ahead of the holidays, according to the company. Target House provides free long-term housing for St. Jude patients and their families.
"At the core of the Magnolia brand is the desire to make homes beautiful, but with a focus on family and practicality. We want to create spaces that families want to gather in," Joanna Gaines said in the post. "We’ve always dreamed of working with a retailer to create a collection that could reach more people at a more affordable price point. Coming together with Target not only allows us to design beautiful pieces for people all over the country, it also allows us to help communities in a bigger way than we could have ever imagined."