On Target: Differentiating Through Owned Brands
Upbeat instrumental music plays throughout. A mother pushes her cart up to a Valentine’s Day display in a Target store. Her daughter, clutching a teddy bear, runs up excitedly and lifts a pink container of candy off the shelf.
Jill Sando sits interviewing in an office.
JILL: We are building brands.
Jenny Breeden interviews.
JENNY: We build them 100% with the guest at the center.
Christina Hennington interviews.
CHRISTINA: Owned brands delivery on strategic value, on loyalty, and economic value for Target. We really can manage the process from end to end.
Rick Gomez interviews.
RICK: And by having that internally we're able to be more flexible we're able to have more control of the end product.
An assortment of home-goods products are displayed: candles, candle holders, cocktail glasses, an ice bucket, and blankets and throw pillows. In Target, the little girl puts a product in her mom’s cart with a smile. A narrator speaks in voice over.
NARRATOR: This is the story of how Target has built a portfolio of owned brands that drives relevance, traffic, and growth in a crowded retail landscape. It's an exploration of unique capabilities that builds a portfolio of compelling owned brands with a curated collection of national brands and exclusive partnerships for an assortment that is uniquely Target.
Women consider paint colors around a conference table filled with binders, someone draws a design sketch on a piece of paper, a colorful display of Good & Gather products line a shelf, and designers pick clothing off a rack.
CHRISTINA: The proof point is really in the numbers, right? $30 billion worth of owned brands business and growing, and we've just been building tremendous credibility over the years to build out what is a portfolio of brands that rivals some Fortune 100 companies.
Images flash by as Christina speaks. Models wear activewear, and a logo appears in the top right corner beside text.
ONSCREEN TEXT: all in motion™
Childrens toys and items appear beside a logo of a smiling cloud.
ONSCREEN TEXT: cloud island™
A model poses beside men’s grooming products and a sneaker. A logo appears in the top right corner of the screen.
ONSCREEN TEXT: Goodfellow
& CO
Arts and crafts items appear beside a logo.
ONSCREEN TEXT: mondo
LLAMA
Someone holds a stuffed doll, and a colorful rainbow arches across a shower curtain. A logo appears in the top left corner of the screen.
ONSCREEN TEXT: pillowfort™
A bed rest pillow is displayed alongside a well-organized desk. A logo appears in the bottom right corner.
ONSCREEN TEXT: room
essentials™
A record player appears beside a pair of white headphones.
ONSCREEN TEXT: heyday™
The screen divides into red rectangles. White text appears in the top left.
ONSCREEN TEXT: On
Target
A white Target Bullseye logo appears in the bottom right of the screen. Now, the rectangles shift through brand images before settling into red rectangles again. A white Target Bullseye logo appears in the top right of the screen, and text appears at the bottom.
ONSCREEN TEXT: Owned
Brands
NARRATOR: This is on Target differentiating through owned brands.
White text appears within a red rectangle.
ONSCREEN TEXT: The power of
owned brands
Rick Gomez interviews from an office. White text appears in the bottom right of the screen.
ONSCREEN TEXT: The power of
owned brands
White text appears in the bottom left of the screen.
ONSCREEN TEXT: Rick Gomez
Executive Vice President &
Chief Food, Essentials & Beauty Officer
RICK: Target's owned brands play a critical role for Target. They drive traffic to our stores, they drive traffic to our site. They also differentiate Target from other retailers. They're driving top line growth and they're driving profit growth for us.
Jill Sando interviews from an office. White text appears in the bottom left of the screen.
ONSCREEN TEXT: Jill Sando
Executive Vice President & Chief Merchandising Officer
Apparel & Accessories, Home & Hardlines
JILL: We have spent decades building capabilities that allow us to deliver exclusive owned brands for our guests that deliver on their needs and their wants and that is more complicated than people realize and requires multi functions to do that. You need to have insights that then guide a brand strategy
Christina Hennington interviews from an office. White text appears in the bottom left of the screen.
ONSCREEN TEXT: Christina Hennington
Executive Vice President & Chief Growth Officer
CHRISTINA: Brand management. This is really where we identify the white space – what we want to do for the guests. Then it's in design. What products are we building? How were we making them? And you need to have a sourcing team who can go and then have that produced. So sourcing them, manufacturing them, bringing them to life and then flowing them through the supply chain. A woman wears the activewear as she stretches. A warehouse is shown.
As Christina speaks, a designer designs activewear on a laptop. A woman strides into the Target Sourcing Services office. Employees work in cubicles, then garment workers sit at a line of sewing machines. A woman wears the activewear as she stretches. A warehouse is shown. Jill interviews.
JILL: By really leveraging our scale, by being laser focused on the features and the benefits, the material choices that we put into the product, we are able to deliver better value for our guests and more value for Target, from a profit standpoint.
Christina interviews.
CHRISTINA: The amount of time, money, capital and infrastructure that we have built behind owned brands over the last 30 years would be really difficult to replicate at this scale.
As Christina continues to speak, a consumer product tester samples food from a Target employee. In a conference room, designers mull over different product packaging options.
CHRISTINA: We have invested in insights and research that allow us an ability to understand our guests at a deeper level and then we've proven over time that we can turn those insights into real meaningful products and of course, it allows us an ability to offer the kinds of value that our guests have come to expect because we're cutting out a lot of intermediaries and reducing that cost
Home goods products – candles, candle stands, and a candle accessory set – sit on a display table. Mannequins display jeans, slacks, and t-shirts with unique designs. Good & Gather products are stocked neatly on a product shelf. Employees gather in a conference room for a Cat & Jack meeting. Flavored Favorite Day whipped dairy toppings are shown, as well as Figmint kitchenware products. The Figmint team is shown discussing products in a conference room.
NARRATOR: Target's owned brand portfolio consists of more than 45 brands including anchor brands like Good & Gather and Cat & Jack as well as fast growing brands, like Favorite Day. All our examples of our ability to design, build, and scale brands quickly and continuously.
Rick interviews. A variety of Good & Gather products flash on screen.
RICK: One of my personal favorites is Good & Gather. It's actually our largest owned brand it's over $3 billion in sales and we launched it just in 2019. So, in just a matter of a handful of years, it's already become really a powerhouse brand.
Favorite Day products flash on screen. Product testers are shown cooking Favorite Day Red Velvet Pancake and Waffle mix in a kitchen. A customer shops for Favorite Day pink chocolate chips and Valentine’s chocolates.
RICK: Favorite Day is a brand that we developed and launched during the pandemic and we identified the opportunity for something a little sweet, a treat. And so it's a brand that's really all about sweet and savory indulgence and since we've launched that brand it's been delivering double digit growth every year and has now become one of the fastest growing brands in the industry.
Jenny interviews. Employees meet in a Cat & Jack conference room. A mom shops for Cat & Jack clothing for her daughter in a Target store.
JENNY: In 2022, in Cat & Jack, we sold 360 million units of Cat & Jack kids clothing and accessories. What that translates into is 8 items for all kids under the age of 12 in the US. So, to have scope and reach of that scale and that magnitude for a single brand like we have it just tells me that there's a relevance of that brand, of the style, of the quality that we're delivering there that's really, really connecting with our guests.
A display showcases the Auden brand of women’s underwear. Other Target-owned brands are shown: Threshold, Good & Gather, Cloud Island, and Goodfellow & Co.
NARRATOR: Our owned and exclusive brands account for approximately a third of our total sales and even more of our gross margin, helping to sustain key enterprise investments in growth. And because of our tailored guest centric approach to creating, managing, and scaling our brands, owned brands will continue to be an engine of growth and profitability for years to come.
Red rectangles sweep over the screen. Then, white text appears within one.
ONSCREEN TEXT: Brand
management
Employees work in a Figmint conference room.
White text appears in the bottom right of the screen.
ONSCREEN TEXT: Brand
management
Christina interviews.
Christina: At Target we're very intentional in trying to bring our guests the best of what we think will serve their needs. We start with brand management, at the heart. And this is what good consumer packaged goods companies do. They think about the customer they're serving, they research that market intently, they look at the needs that they're trying to meet, and then they build out brands that are in service of that white space.
Bill Foudy interviews from an office. White text appears in the bottom left of the screen.
ONSCREEN TEXT: Bill Foudy
Senior Vice President &
President Owned Brand Sourcing & Development
BILL: We're not just putting a label on something. Ee're not just creating something that's a cheap alternative to what a national brand has built. We're building brands and those brands have equity.
Jill interviews.
JILL: There is both work that our brand management team does to support individual brands but we also are very invested and focused on creating a sum that's greater than the individual parts. So we intersect the needs of a category, the needs of a guest with a brand portfolio to make sure that we don't have redundancy, that we have clear reasons for being, and that we have a portfolio that is unique, distinct for Target, and relevant for what our guests want.
Carlos interviews in an office. White text appears in the bottom left of the screen.
ONSCREEN TEXT: Carlos Saavedra
Senior Vice President
Brand & Portfolio Management
As Carlos speaks, Auden employees gather around a worktable.
CARLOS: The role that brand management plays in the simplest form is about identifying the strategic roadmaps for our brands over the next few years. So, we've taken the best of the discipline in terms of deep guest understanding, insights, research, and really pairing that with strategic analysis, really identifying what are the strategic roadmaps for our brands, and we've really done that at the pace of retail which, as anyone knows moves incredibly quickly. And so we are able to launch, grow, and invest in our brands in a much faster way.
Jill interviews. A collage of owned brands logos appear beside still images of their products: Hyde and Eek! Boutique, Universal Thread Goods Co., Room Essentials, and Cat & Jack.
JILL: Target's owned brands give us an exclusive, and affordable, and on trend in a relevant offering, that is designed in partnership with our guest. So, it is literally co-created with our guest to deliver on their wants and their needs. It is not about just delivering aesthetic, it is not just delivering style, it is about delivering the functionality, the features, the benefits, the values… and that's what owned brands do for Target and for our guests.
Christina interviews.
CHRISTINA: We pride ourselves in curating an assortment. Really thinking through what does the guest need and what is our role in finding just the right amount of choice and differentiation that they can decide for themselves, but not perplexing choice. And we do that by leaning on, certainly our owned brands – and we've talked a lot about them – but the role of national brands and partnerships.
A customer smiles as she considers a display of kitchenware items at Target.
NARRATOR: You can clearly see the role of brand management in action in our home category, as we re-evaluated our kitchenware space.
Carlos interviews.
CARLOS: If you look at, kind of, kitchenware brands over the past, call it 10 years, there hasn't been a lot of newness, a lot of innovation within the biggest brands out there. And honestly it's a fairly fragmented space. And so, what that left guests with was with a choice. They could either have style and performance, or they could have a really affordable price. And we just don't think guests should have to choose between those. With the introduction of Figment – our new kitchenware brand – we were able to deliver incredible style really just amazing colors a real focus on performance. Like, we know guests need to know that this is going to work, and all at an unbeatable value. There was a lot of conversation as we looked at the kitchenware space of whether we should expand threshold in that space. And if you go back to what brand management is all about, it's really about anchoring in these states. Really understanding what is the guest looking for. And we felt that we would be stretching the brand equity of threshold too far to really be able to deliver on this need for performance. And so that's really where we saw the opportunity for a new brand. The brand is off to an incredible start, surpassing our expectations, and we're able to build from there.
The Figment team is shown working around a conference table. Then, chefs prepare Favorite Day pancakes in a kitchen.
NARRATOR: Brand management helps us understand when there's an opportunity to launch a new brand, to expand an existing brand, or end a brand to make room for new opportunities as we've done in our food and beverage business.
Rick interviews.
RICK: We have been on a multiyear journey to transform our food and beverage business. We aspire to go from being a retailer that just sells food, to a retailer that truly celebrates food.
Logos and products flash on screen as Rick speaks.
ONSCREEN TEXT: Good &
Gather™
ONSCREEN TEXT: favorite day™
ONSCREEN TEXT: MARKET
PANTRY™
RICK: We've cleaned up the portfolio of brands to have it very focused on three brands: Good & Gather, Favorite Day, and Market Pantry. Each brand plays a unique role in the portfolio. Good & Gather is about better for you, but delicious and affordable options for the whole family. Favorite Day is about treats: sweet indulgence. And then Market Pantry is the opening price point of family favorites.
Jill Interviews.
JILL: And so really the strategy is in service of having the right range of outcomes so that we can serve more guests. That we are more relevant for more by having the right level of choices but also clarity in the role of each brand within our portfolio.
Red rectangles slide on screen, and white text appears within one.
ONSCREEN TEXT: Product design
and packaging
Jenny interviews. As she talks, Figment designers are shown working in a conference room. In store, a customer lifts a Figment product and examines it with a pleased smile. White text appears in the bottom right of the screen.
ONSCREEN TEXT: Product design
and packaging
JENNY: Owned brands are the most direct conduit by which we can share Target’s purpose and values with our guests. And so as we do that through our brands, and through our products, it really elevates the mission of our product design and packaging team to rise to that challenge.
CHRISTINA: We have a huge team of designers on staff that build those products from scratch in the latest technologies and with an incredible set of partners across the whole world.
As Jenny speaks, designers are shown working across several of Target’s owned brands.
JENNY: We have designers that focus on apparel, accessories, home products, hardlines essentials, beauty, food and beverage…. I mean, you name it and we are developing it. What it means is that you may have the traditional design functions like fashion designers and trend forecasters and textile designers and artists, but we also have researchers, we have food scientists, we have chemists, we have engineers…
Jill interviews. As she speaks, food scientists work in a lab with organic pineapple juice, study ground coffee, and mix granola.
JILL: our teams really have the expertise to ensure that our product delivers against all of the guests desires in the category. And so it is something that we've been investing in, building for decades, and we continue to just raise the bar on what we want to deliver, how we want to deliver that in a way that is so in line and in tune with what our guests want. One example I would give you is the work that we did to deliver and build All In Motion, our performance brand.
A grey logo centers a yellow screen.
ONSCREEN TEXT: all in motion™
As Jill continues to speak, All In Motion designers measure pants on a mannequin, make adjustments on a laptop, and consider color palettes on a wall.
JILL: we spent thousands of hours with guests understanding their desires, their preferences and what they didn't care about, so that we could get laser focused on the features and the benefits that we put into the product. So that we could deliver a high performing and highly affordable option for our guests. That brand, year one, was over $1 billion in sales, which just shows the impact of having the right guest relevant insights and then the brand that delivers on those insights.
Auden designers consider different pattern designs using underwear stencils.
JILL: Because of the way that we treat brands, because of the way that we prioritize design, it is unlocked several incredible partnerships with us. Like limited time only partnerships. People see the way that we nurture brands, that we build brands, that we invest in brands, which makes them want to work with Target.
CHRISTINA: We're constantly reevaluating how to create relevance through our portfolio, whether that is our owned brands, certainly the national brands that we carry in our partnerships. But because we're controlling what ultimately we put out there for our owned brands we need to be on point with the research. Constantly listening, evaluating and really staying on top of our guests' expectations. And in evaluating an opportunity in the kids space, we saw that we were meeting the everyday needs of those kids going to school and running around on the playground et cetera. But some guests were telling us that there is an opportunity to really support the dressier side of things.
Designers meet in a conference room where a collection of colorful Cat & Jack dresses hang on a wall.
CHRISTINA: And so how do we think about those special occasion opportunities and think about how Cat & Jack can serve those as well. Because ultimately Cat & Jack is not about a playground brand, it's a kids brand rooted in values quality and durability, and that should matter in every segment.
Designers are seen working in a Cat & Jack conference room, scribbling notes on a design sheet, and considering pockets on a pink toddler shirt. A boy plays on a backyard jungle gym, and a girl draws with pencil crayons inside.
NARRATOR: Our selection of adaptive items, such as infant and kids clothes with side openings for abdominal access, sensory friendly products such as tagless clothing, as well as broad ranges of sizes and price points, ensure our assortment is relevant for the needs of today's consumers.
A designer unzips a pair of jeans on a mannequin using a zipper on the hip of the pants.
CARLOS: Where we've been able to really invest in making sure that we have adaptable designs, that we're able to meet the needs of our sensory divergent guests…
JENNY: That's a space where target has been a leader for many, many years.
Red rectangles sweep across the screen. White text appears in one.
ONSCREEN TEXT: Sourcing
and development
Bill interviews. White text appears in the bottom right corner of the screen.
ONSCREEN TEXT: Sourcing
and development
BILL: We have quite a few functions within what we call the sourcing organization. We have product development, we have sourcing, of course, we have teams here in our headquarters, we have teams overseas…
As Bill continues to speak, fabric manufacturers are seen meeting with designers.
BILL: It's not in our best interest necessarily to be our own manufacturers and to own that in most cases. We want to engage with those vendor partners that actually make the goods, whether that be a raw material or a component or a finished good, we want to get direct to manufacturing. And that is a competitive advantage. One for us that stands out from pretty much all of our competition.
Employees work in vast garment factories. Two people examine a jean vest on a mannequin.
JENNY: We have today 20 offices in 14 countries that build these products at the point of manufacturing.
BILL: We have a lot of different functions that are all under this one organization which allows us to take in different bits of information from different places and make the most informed decisions in direction for our strategy. If we were to work with an agency, they are for profit, right? And they need to come to us with their overheads and their expenses and their profit cut and so just straight off the top, we're more cost effective doing it in house. We want to build relationships that are going to be there for the long-haul. Vendors start to understand that no we mean this, right? We really do want to develop a partnership. And as that trust is created and generated it opens up a lot of other paths as well, but it opens up things related to investments on their end. So we can have conversations about where we see business going where we see trends developing and have confidence that they'll invest in those on our joint behalf, to be out in front of those.
CHRISTINA: We take out so many costs in the process that we can get those costs come down pass that value on to the consumer and offer them at an incredible credible price point.
A tractor drives through a farm. Irrigation lines are set up over crops.
CHRISTINA: It's also a great way for us to deliver on our Target forward sustainability goals. Our guest has a strong preference for brands that are built sustainably. Not by themselves, but as an “and” for the great quality, durability, and value that we offer.
Red rectangles sweep across the screen. White text appears in one.
ONSCREEN TEXT: An engine
for growth
Jill interviews.
JILL: I see owned brands as a key driver of growth for Target. We control our own destiny. We can be relevant for the guest. We can deliver incredible value. And that is a unique position that Target has and something that still will deliver tremendous growth for us for the future.
Christina interviews.
CHRISTINA: Owned brands are a huge part of the growth formula for Target. That's because guests have said we really like what you're doing, Target, and we're going to reward you with our dollars and with our trips on a consistent basis and that I think is really hard to replicate. And we built it.
A white Target Bullseye logo centers a red background.