For Target, it’s all about building buzz for its unconventional blend of high-style offerings and low-rent prices. Discounters, such as Wal-Mart, became the darlings of the retail industry this decade as savvy shoppers refused to pay full price and spurned department stores. But Target disdains the typical approach of “stack ’em high, price ’em cheap and watch ’em fly,” says consultant Candace Corlett of WSL Strategic Retail. Instead the discounter, regally referred to as “Tar-jaay” by its devotees, has made a name for itself with its upscale-downscale hybrid. “Target is the Kmart for Yuppies,” gushes Megan Tracy, 28, a Chicago ad exec. Target’s trend-spotting staff has kept the discounter ahead of the curve on everything from cashmere cardigans to Day-Glo dinnerware. Target also scored with its stylish line of housewares designed by postmodern architect Michael Graves. “His toaster is a little object of art,” raves 36-year-old Cleveland hospital worker Teresa Duke, who dropped $40 on one even though she usually skips breakfast.
Initially a Midwestern phenom, Target is now pushing into the fashion-conscious Northeast and spending big to put up more than 100 new stores by the end of next year. Target is shooting for the same turf as Wal-Mart, which is also expanding aggressively in New England. Wal-Mart already dominates discounting, with nearly three times as many stores as Target’s 881 nationwide. But analysts expect the Northeast’s urban dwellers to embrace Target’s hip attitude and help propel the Minneapolis-based retailer into second place among discounters, ahead of struggling Kmart. “Wal-Mart appeals to an older customer, and Kmart doesn’t enter the conversation,” says Corlett. “Target takes risks.”
Target’s new ad campaign is designed to transform the bull’s-eye into an icon of affordable chic. Target is spending a big chunk of its quarter-billion-dollar ad budget to put the bull’s-eye on everything from commercials on MTV to the sides of suburban water towers. The frenetic, quick-cut TV commercials–created by Peterson Milla Hooks, a tiny Minneapolis ad agency–are backed by a hip-hop version of Petula Clark’s bubble-gum classic “A Sign of the Times” (they follow a separate fashion campaign created by the Kirschenbaum Bond ad agency). There’s even a big bull’s-eye staring down on Times Square, ground zero for grabby advertising. Says Pellegrene: “We want to make our logo as big as the Nike swoosh.”
Target has certainly been on a sprint for its parent company, Dayton Hudson Corp. Target’s profits have nearly doubled in the last four years and now account for three quarters of Dayton’s bottom line. But today’s hip store can quickly become tomorrow’s distressed merchandiser. Analysts warn that Target could miss the mark trying to cater to the fickle fashion sense of the American bargain hunter. And eight years into an unprecedented consumer spending spree, Target is treading into treacherous territory in the Northeast, where shoppers have short attention spans and cutthroat competition killed discounters like Woolworth and Caldor’s. So far, however, executives at the fast-growing store chain have managed to aim at just the right target.
