Target takes on dollar, deep-discount rivals with new launch
Target Corp. is entering new territory price-wise with the debut of its newest private brand.
The retailer is introducing Smartly, a line of essentials and personal care products, aimed at budget-conscious shoppers. The new brand includes more than 70 everyday items, from body lotions to paper plates to razor blades, with most items priced less than $2. (The full range is $0.59 to $11.99.) The line will arrive in Target stores and online starting Oct. 14, with new products rolling out through early 2019.
Target has launched more than 20 owned and exclusive brands during the past couple of years. Smartly stands out for its aggressive pricing, with products costing approximately 70% less than similar products from national brands, according to Target. The pricing undercuts rivals and also Target’s previously launched store brands.
“The introduction of Smartly is another example of how we are listening to consumers and bringing them solutions to make their lives easier,” said Mark Tritton, executive VP and chief merchandising officer, Target. “Smartly offers incredible value, looks great and most importantly, gets the job done. It broadens our assortment to give guests even more options to find the product that’s right for them, regardless of their budget.”
Target is positioning the brand not only at price-conscious shoppers, but also at those who live in small spaces without ample storage for the type of bulk merchandise that warehouse clubs sell. Products are available as single items and also offered in small multi-packs.
“Smartly offers the affordability of bulk shopping without buying in bulk,” Tritton noted in a blog post on the company’s website.
Target said its product design and development team “doubled down” on design and key attributes for the brand. For example, liquid hand soaps will be found in fragrances such as Rain Shower and Lavender, and all-purpose cleaners will be available in scents like Ocean and Citrus Grove.
Smartly’s packaging is modern and fun, featuring irreverent expressions such as “smells like well, nothing” on a bar of unscented soap and “no dishes tonight” for disposable plates, and “does the dirty work” on dishwasher powder.
Survey: Kwik Trip, Wawa and Quik Trip tops with consumers
Convenience trumps price and quality when it comes to shopping for food in the convenience, dollar and drug store channels. And shoppers favor regional retailers over larger ones.
That’s according to a new study by dunnhumby, which found that Kwik Trip, Wawa and Quik Trip are the top three retailers for food in the $291 billion U.S. convenience, dollar and drug channels. The report studied what drives retailer preference among shoppers of smaller format grocery channels and analyzed consumer emotional sentiment and preference for 37 of the largest retailers in the three channels.
The 10 retailers with the highest consumer preference index scores are: 1) Kwik Trip, 2) Wawa, 3) Quik Trip, 4) Speedway, 5) CVS, 6) Sheetz, 7) Cumberland Farms, 8) Walgreens, 9) Dollar Tree, 10) Turkey Hill.
“Consumers today are starved for time and as a result are making more quick food shopping trips to convenience, dollar and drug stores,” said Jose Gomes, president of North America for dunnhumby. “The goal of our study is to understand macro trends in the convenience space, and to provide retailers with a benchmark for how they are performing on the different drivers of consumer preference.”
Key findings from Dunnhumby’s “Retailer Preference Index” study include:
• Convenience plays a much bigger role in customer preference than price and quality. Convenient locations, hours of operation and speed play a big role in store preference.
• Quality-focused regional retailers such as Kwik Trip, Wawa and Quik Trip have stronger connections and customer preference compared to the larger retailers with higher store counts.
• Retailers ranked higher in the RPI tend to have a lower proportion of franchisees/licensees than retailers ranked lower. On average, retailers in the top half of the ranking are 7% franchised. By contrast, retailers in the bottom half are 48% franchised.
• Convenience stores stand out from the drug and dollar channels in their strength in meal destination and their weakness in price.
• Drug stores are stronger in quality, rewards, and digital compared to convenience stores and dollar stores.
• Dollar stores are strongest in price but are weaker than convenience stores and drug stores in quality and convenience.
• Six in 10 convenience store customers shop dollar stores and drug stores at least three times a month.
• Fifty percent of dollar store customers shop the other two channels regularly.
• Fifty percent of drug store customers cross-shop the other two channels.
The study found that there are six drivers of customer preference:
• Convenience – Customers are interested in convenient locations and hours. They want to be able to get in and out quickly and they want fast and easy checkouts. Customers also want the right variety of food and beverage products.
• Price – Customers want lower prices than other stores and their preferred brands to be in stock.
• Quality – Customers want quality products, clean stores and bathrooms, and a safe location.
• Meal Destinations – Customers want appetizing, ready-to-eat food, fresh produce and healthy food options.
• Discounts and Rewards – Customers want relevant, easy to use discounts and coupons that reward them for shopping.
• Digital – Customers want easy ways to shop online, and want stores to have an mobile app that makes shopping easier and provides useful information.
“By building loyalty and preference with customers, convenience retailers can improve the performance of existing stores rather than having to continually build top line sales through acquisition, which could be more challenging moving forward because of higher interest rates and the rise of digital and alternative food channels,” Gomes said.
Gap reaffirms that its stores are ‘open to all’
Gap Inc. has joined a public education campaign that promotes inclusion and diversity.
Gap announced it is signing the “Open to All Business Pledge.” and urging other businesses to declare they are “Open to All” and oppose discrimination.
The retailer joins Yelp, Levi Strauss & Co., Lyft, as well as more than 1,500 small businesses and 200 nonprofits, in partnering with Open to All, a public education campaign focused on the principles that affirm when a business opens its doors to the public, it should be open to everyone on the same terms. Gap said it will feature the Open to All window cling in select stores across America.
In addition, the company will post Open to All signs at its headquarter buildings in San Francisco, New York and Albuquerque, as well as at its distribution centers in California, Ohio, Tennessee and New York.
“Together, our brands celebrate equality for all in our workplaces and communities globally,” said Art Peck, president and CEO, Gap Inc. “Not only does this foster inclusivity, creativity and contribute to a more just world, it also helps us be more competitive in the marketplace and better serve our customers. We’re proud to join the Open to All coalition and stand with other businesses to welcome all customers to our brands.
Last month, Gap Inc. was ranked as one of the world’s most diverse and inclusive companies for the second consecutive year in the annual Thomson Reuters Global Diversity and Inclusion Index, which scores companies using environmental, social, and governance metrics. Earlier this year, Gap Inc. was the only U.S. retailer to make the 2018 Bloomberg Gender-Equality Index.