Target stokes price war with new Smartly private label
Starting Oct. 14, Target will roll out a new private label essentials and personal care line, currently including 70 products like body lotion, paper plates, straws, sandwich bags and razor blades. Most items are priced under $2 but range from $0.59 to $11.99, the company said on its A Bullseye View blog.
The new line was designed mostly with price in mind, according to the company, which estimates that Smartly products cost roughly 70% less than national brands. More products will be added to the line through early 2019, the company said.
The line touts "fun" packaging too, for instance: "ammonia 'fights grime,' dishwasher powder 'does the dirty work' and toothbrushes are 'smile worthy.'" The products are also sold in small multi-packs that the company said offers value-conscious shoppers living in small spaces "the affordability of bulk shopping without buying in bulk."
Smartly is just the latest private label brand to join the ranks of Target's "cheap chic" portfolio. Where this line differs from the swaths of trendy apparel and home decor brands though, is that it leans heavily on the side of cheap, not chic. With an average price point under $2, the brand is a competitive move against rivals like Walmart.
It may also be a defensive move against disruptors like Brandless. The e-commerce CPG company made a lot of noise when it launched last year with a selection of 110 items all priced at $3. Its mission was to eliminate the "brand tax" with a direct-to-consumer model, modern aesthetic and unique product offerings. The company was named Retail Dive's 2017 Disruptor of the Year because within a year it had already put established brands on notice.
Target may be one of them. Packaging and delivery decisions around the new line certainly fit with its strategy of catering to urban millennial shoppers. The line will be available to order online for Order Pickup and Drive Up, or to ship through Target Restock. Selling small multi-packs is also a convenience play for urban shoppers living in tighter quarters.
Last March, CEO Brian Cornell announced a $7 billion investment to redesign the store and digital operations. As part of that, the company embarked on a multi-year plan to construct more than 100 small-format stores that cater to urban, suburban and college campus areas. These small stores are stuffed with Target's new private label lines like A New Day, Universal Thread and Project 62. In many ways, these stores are a defensive move against Walmart, whose prices on the whole tend to be cheaper and who generally caters to a more budget-conscious shopper.
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