Dive Brief:
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Target has reworked its largest home goods private label, Threshold, part of a merchandising overhaul under CEO Michael Fiddelke. Threshold notches almost $3 billion annually, the retailer said Tuesday.
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As with other recent efforts from Target, there’s a focus on affordability. Prices on some Threshold items have been lowered, including a $20 price cut on certain comforters.
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Merchandising improvements include presentation in stores that makes it easier to imagine how complementary items would work in the home. The brand also added more than 800 new items to the assortment.
Dive Insight:
Threshold, which launched in 2012, is getting the upgrade that Fiddelke promised months ago, with quality improvements and a more extensive range. The project is part of a $1 billion, multiyear turnaround.
Barware and serveware have been refreshed, bedding fabrics include gauze and textured cotton and much of the decor now has “elevated finishes.” Target is smoothing customers’ decision-making process by expanding choice and showing how items — which span traditional to contemporary — might go together. In its research, Target found that many people mix styles when furnishing and decorating their homes.
“As we've refreshed Threshold throughout the year and continue to rebuild our Home business, it's exciting to see how guests are already responding to the merchandising authority we bring with a range of styles, elevated design, and incredible value,” Mara Sirhal, Target senior vice president of home merchandising, said in a statement.
Target is pushing that last proposition at a time when prices on many essentials have exploded and consumers of all income levels are focused on their budgets. The retailer already touted the price cuts on Threshold items last month — adding to some 10,000 reductions throughout the store — as consumer sentiment took another dive. That move continued a series of price decreases the retailer launched in March.
The mass merchant’s customers are responding to those moves, according to recent store checks from Jefferies analysts led by Corey Tarlowe. Promotions and merchandising improvements appear to be getting people’s attention, they said in a Sept. 25 research note.
“We continue to believe investors may be underappreciating the magnitude of TGT's merchandising transformation and its potential to support sustained traffic growth and margin expansion over time,” Tarlowe said.
