Now that's entertainment: Target masters the art of selling Hollywood

Discount Store News, April 1, 1997 by Robert Scally

It's hard to escape Hollywood during a visit to a Target store.

And that's not surprising to executives in the home video, consumer products, music and interactive software units of Hollywood's dream factories, who agree that Target is the leader in innovation in entertainment marketing.

Target understands the value of entertainment properties as brands and has been able to weave Hollywood's wares into nearly the entire fabric of its stores, according to executives from the major movie studios.

Walking through a recently opened Target Greatland in Vista, Calif., it was difficult to go anywhere in the store and not catch a glimpse of black and white Dalmatian spots from Disney, feel a bit of Force from Twentieth Century Fox and Lucas Film's "Star Wars" properties or sense the excitement of Warner's "Space Jam."

While Target with its 752 stores may not be able to match the sheer volume of sales generated by Wal-Mart, the world's largest retailer, it has helped to significantly shape the development of the sell-through home video business and sales of licensed merchandise related to entertainment properties.

"Most of their merchandise programs now drive corporate initiatives," said John Dumbacher vp of licensing and retail for Universal Studios and a former Disney executive. "It wasn't that long ago when many of their initiatives were really not tied to merchandise."

Universal succeeded in getting 14 Target executives to come to Universal City in California last year to begin the planning process for a major merchandise push that will be tied into this May's theatrical release of "Jurassic Park: The Lost World," the long-awaited sequel to "Jurassic Park." Target and Universal officials worked together to develop merchandise that will appear in numerous categories in Target stores, as well as some items that will be specific to the chain.

Target was the first chain to set up an executive team to handle licensed merchandise and get those goods into as many sections of the store as possible.

"By doing great in-store displays, with the right advertising and the right displays, it's not difficult to quadruple sales," Dumbacher said.

While Disney's influence on Target's merchandise is obvious and nearly ubiquitous within the stores, the chain has forged strong ties to several other studios as well, particularly within home video.

"We have taken [Target's] vendor of the year award for three years, so it's obvious that Target and Twentieth Century Fox have a very, very strong relationship," said Robert DeLellis, president of Twentieth Century Fox Home Entertainment.

Target's in-house merchandising staff sets it apart from other major discount retailers, industry sources say. "You always know that your product is going to get to where it's supposed to be and will be well displayed," said one executive in the home video division of a major studio.

But Target's home video sales could be better, the executive said. Rigid requirements for signage and some other in-store promotional efforts mean that the retailer is probably leaving money on the table when it comes to home video, the executive added.

But in the next breath the same executive noted that the stiff requirements also mean that Target's home video departments are almost always well-organized and attractive to consumers.

Target frequently cross-merchandises home video in other departments. Movable TV carts, with a television/VCR combo on top and three sides of home video displayed below, can be rolled from one department to another.

At the Target in Vista, Calif., a group of children were gathered around a TV cart located in the boy's apparel department watching Warner Home Video's "Space Jam." Nearby were T-shirts emblazoned with "Star Wars" scenes, and Batman and Robin pajamas, licensed from Warner, were prominently displayed not far away.

Music has played an important role in Target's marketing efforts for several years. The retailer has a history of recruiting country music stars for its promotional efforts.

Amy Grant, a country singer who has crossed over from contemporary Christian music to country to pop, is the current cultural icon supporting the retailer's "Target the Family" charity. Grant's face appears on in-store posters and brochures that tout the corporate giving program, and she endorses the "Target the Family" program on a note inside brochure.

But more often Target emphasizes the music produced by various pop stars, and the retailer has been successful with numerous exclusive albums from various artists.

This year at Valentine's Day, Target sold a special CD from Arista Records' smooth jazz saxophonist Kenny G that was priced at $6.99.

Instrumentalist John Tesh currently has an exclusive record in Target, "John Tesh Anthology," and last summer, singer/songwriter Jimmy Buffet, known for his tropical-themed tunes, was part of a summer promotion.

Books also play a big role in entertainment merchandising at Target. Books related to various properties, such as the "Star Trek" series, are often merchandised together.