In recent months, Target has acquired Dermstore.com, Cooking.com and CHEFS Catalog. Wondering what’s behind these acquisitions? Casey Carl, Target’s president of Multichannel, explains the strategy and how these companies fit into the Target family.
How will these acquisitions advance Target’s business?
The acquisitions of CHEFS, Cooking.com and DermStore.com help us give our guests more of what they want — product, content and choices — in categories that are most important to them, specifically Cooking and Beauty. All three companies offer our guests a broader assortment of products, prestige brands and rich, meaningful content — including expert advice, how-to videos and recipes.
Why these particular companies? Why now?
As I mentioned, these companies represent categories critically important to our guests. As evidence, in 2012, Beauty outpaced our total company sales growth. Also, we know that 70 percent of our Beauty guests research products online before making a purchase. That means we need to be able to give them deep content, expert advice and recommendations so they can feel confident making their purchases. DermStore.com helps us with that.
With the increasing popularity of cooking channels and celebrity chefs, the kitchenware market has boomed in recent years. Trends show premium brands and personalities continuing to expand online. CHEFS and Cooking.com are two established brands at the front of this trend. Also, given the importance of kitchenware to registry, there are some exciting opportunities to integrate our businesses to grow our registry and capture new guests. These are companies with small, nimble, scrappy teams. They’ve built up great brands and e-commerce sites. We’re going to learn a lot from them.
Are there plans to integrate these companies into Target’s core business?
Absolutely. The challenge is to do it without disrupting their business and protecting what makes those companies special without Target. What’s most exciting is the integration of private labels across platforms to help drive traffic and sales. As early as this holiday season, we will begin carrying CHEFS’ private label (already selling at Cooking.com) on our site. Next year, we’ll carry the product in our stores.
Also this holiday, CHEFS, Cooking.com and DermStore.com brand portals will be accessible through our site, giving guests access to high-end brands and rich content through one Target.com experience. Next year, we will integrate CHEFS and Cooking.com into our registry experience. These are just a few things in the works. There’s much more to come.
Does Target have plans for additional acquisitions?
We don’t have an acquisition strategy, per se. We have a business strategy. And as part of that business strategy, we are always looking for opportunities to better serve our guests and strategically grow our business. In that pursuit, we identify opportunities and ask ourselves: Is there a solution we can buy or build? Can we partner with somebody established in the industry with deep expertise? Or does it make sense to acquire a company with that expertise? All questions are always on the table.
What does the future hold for these partnerships?
We’re excited for all three companies to join the Target family. Many of their team members are already loyal Target guests. We’re equally excited about everything they bring to Target. Beyond assortment and content, these are smaller companies that can help teach us how to think more entrepreneurially and strengthen our e-commerce expertise. I’m thrilled to have them on board.
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