Target Introduces Club-Sized SKUs

Target ushered in 2010 with a bold initiative that replaced its trademark seasonal merchandise with economy-sized SKUs and other products more typically found in warehouse clubs -- adding a new twist to the value-focused efforts the retailer conducted in 2009.Called "The Great Save," the post-holiday program offers reduced prices on bulk items and a range of other products from Jan. 3 to Feb. 21. The unique inventory includes value-sized SKUs of national-brand products such as PepsiCo's Quaker oatmeal, Del Monte Foods' Del Monte fruit cups, Procter & Gamble's Tide, and Kraft Foods' Nabisco Wheat Thins and Chips Ahoy, as well as Target's Market Pantry private-label water.Some of the products are stocked right on pallets -- a merchandising tactic that historically has been anathema to the aesthetics-driven chain.The department also carries household items ranging from Corning Inc.'s Pyrex to Samsonite luggage in a merchandising tactic that industry watchers have noted is akin to the "treasure hunt" buys commonly associated with Costco and Sam's Club. More than half of stores have also added designer apparel and home decor to the mix, according to a press release.Ceiling signs around the store direct shoppers to the department, which is decorated in bright shades of orange, yellow and red. The colors are used on dump bins, in-line headers and other P-O-P materials carrying price-related messages such as "Incredible Savings." Ceiling signs at store entrances and in the department make the warehouse-club comparison directly, noting that Target's version doesn't require membership fees. Circular features and FSI ads support."This event is a fresh, innovative approach to meeting our guests' evolving needs and providing them with the opportunity to save even more at Target," Kathee Tesija, the chain's executive vice president-merchandising, said in the release.It also is a stark departure from Target's typical post-holiday seasonal effort, which from 2005 to 2009 encompassed a "Global Bazaar" of internationally sourced home decor. (See "Target is 'Bazaar' Again" in Related Articles.) In 2009, the chain adopted an eco-friendly flavor for the effort. (See "Target Starts the Year in Style" in Related Articles.)The switch in seasonal focus away from department-store goods to (primarily) packaged consumables is logical after a 2009 in which Target's slumping sales were attributed primarily to the chain's reliance on discretionary categories rather than household necessities.Other Marketing ActivityStores recently installed ceiling signs around the perimeter to identify various product categories with images of relevant products: makeup near cosmetics aisles, consumers with hand-mixers and lamps for the kitchen and furniture departments. (See Images at right.) In-line headers with similar graphics reinforce Target's value message, with slogans such as "prep for less" and "serve for less" highlighting such products as utensils and dish towels.The mass merchant is taking the informational route with pegboards that help shoppers select dog treats and eco-friendly kitchen tools, as examples. Similar tips are employed on channel strips in other categories, including automotive supplies and bedding.As the chain moved remaining holiday merchandise to clearance, bedding, children's books and other products with Valentine's Day themes began taking over endcaps. As they did in 2009, some endcap headers carry price-related messages. (See Images at right.)Elsewhere, women's apparel rack toppers identify the exclusive, limited-time Rodarte collection by designers Kate and Laura Mulleavy. In December, stores devoted endcap space to Target's "Red Hot Shop" online boutique, which recently launched in partnership with Comcast's DailyCandy fashion and beauty website. The endcaps merchandised such products as Cake Beauty's Cake skincare with signs directing shoppers to the boutique, which will feature different products each month; January's offerings include home decor, cleaning products and an exclusive bracelet designed by artist Julie Rofman. (See Images at right.)In December and January circulars, Target offered store gift cards of: $5 with purchase of two bags of P&G's Iams cat food. $20 with purchase of P&G's Oral-B dual pack Sonic Complete Deluxe toothbrushes. $10 with purchase of a Nintendo DSi and $30 with a Nintendo Wii console. $10 to $50 with purchase of various electric shavers from Philips Electronics North America and P&G's Braun. $5 with purchase of three bags of J.M. Smucker Co.'s Dunkin' Donuts coffee. $5 with purchase of a 42-count box of Novartis Consumer Health's Prevacid 24HR. $10, $15 and $25 with purchases of, respectively, Apple's iPod Shuffle, Nano and Touch models. The Nano offer was repeated later in December. $10 for any new or transferred medical prescription. $5 with purchase of two P&G products including Downy, Tide, Prilosec and Bounce.Other circular features directed consumers online to order personalized candy from Mars Inc.'s M&M's, offered a free one-year subscription to Meredith Corp.'s Fitness or More with purchase of select fitness DVDs priced at $10, and touted pre-made holiday meals that included private-label Archer Farms ham, turkey and coffee. (The meals were available from Dec. 21-24, with advance orders taken in-store and online.)Holiday ActivityIn response to a major snowstorm that blanketed much of the East Coast on the weekend before Christmas, Target extended the hours of most regional stores to accommodate last-minute holiday shoppers. Stores opened at 7 a.m. -- one hour early -- and remained open until midnight from Dec. 21-23. (For more holiday activity, see "Target's Value Message ..." in Related Articles.)

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