PL apparel aims at differentiation - private label - Target Power Merchandising

Discount Store News, April 18, 1994

Private label continues to dominate Target's apparel offerings, with some Merona products actually priced higher and apparently made better than some national brands.

Target's merchandising strategy attempts to differentiate its offerings from its competitors,' polishing its upscale image with better quality assortments, even if that means setting higher prices, and keeping abreast of fashions.

"We've become good trend marketers," chairman Bob Ulrich said. "It used to be that discounters would copy the department stores and get the looks for the next season. Our guests today are more sophisticated than that."

Despite its emphasis on Merona, Honors and Trend Basics private labels, Target still claims that its apparel offerings are primarily national brands.

Target has long been perceived as the more stylish choice, said Bob Guelich, senior vp and gmm. "We'll try to sustain that with extra attention to styles and colors and trends."

As Target enters new markets, however, its signature apparel departments are producing less positive reactions from new customers than its housewares and domestics departments. Consumer surveys of shoppers in Chicago and Columbus, Ohio, markets that Target entered over the past 2-1/2 years with its Greatland concept, show that in head-to-head competition with Kmart, Wal-Mart and Venture in Chicago, Greatland ran a distant fourth when shoppers were asked what stores they choose for buying children's clothing. Of all respondents, 5.7% named Target Greatland as their first or second choice, 16.6% named Kmart, 10% for Venture, and 9.1% for Wal-Mart.

That pattern is repeated in shoppers' preferences for men's and women's apparel, with 2.9% mentioning Target Greatland for men's wear and 2.7% for women's wear. Unlike children's wear, which roughly one in three prefer to shop for in discount stores, only one out of eight chose a discounter for adult clothing. Within that smaller base, Kmart and Venture led the pack, with about twice as many mentions as Target Greatland, with Wal-Mart sandwiched in between. Target entered the Chicago market in March 1993.

The survey of 285 households in the greater Chicago area was conducted in February 1994 for DSN by Leo J. Shapiro and Assoc. This survey and sample size is comparable to an earlier one conducted in the Columbus market in February 1993. Target entered this Ohio market in December 1991.

Among Columbus shoppers, 6% mentioned Target Greatland as either their first or second choice for children's clothes, and 3% named the chain as their preferred retailer for men's and women's apparel.

The survey results make Kmart the clear winner in Columbus, with a 21% mention as first or second choice for children's clothes, 14% for men's, and 12% for women's. Meijer was second to Kmart with mentions of 11% for children's, 8% for men's and 6% for women's.

Despite the survey's findings, Ulrich said, "We are getting outstanding results out of Chicago. We think that for customers, it's more acceptable to shop in a Greatland environment than in other discount stores of the past."