Creating a new services brand to double share of the tech support market ➞
Target, the second-largest discount retailer in the United States, is renowned for acting like an innovative upscale boutique, with high quality products at low prices. This strategy had set them apart from others who focused solely on price, and now they had ambitious plans to grow their revenue from $50 billion to $150 billion.
They also had an unruly portfolio of over 240 brands – the result of merchants acting independently to create own-brands, in the absence of a strategic architecture. Consequently, while there was choice, own-brands weren’t driving loyalty. Customers were confused, with research showing only 32% could correctly attribute Target’s own-brands to the right company.
We found a fragmented mass of products that lacked coherence, and recommended that Target manage fewer, bigger, better brands. We created a strategic framework that categorised brands based on their relationship to the master-brand, their role in customers’ lives, their in-store scalability, and their potential profitability.
“The consistent execution of our strategy helps us create the excitement Target guests expect and the shopping experience they love.”Target 2006 Annual Report
We also gave Target a range of recommendations to simplify and upgrade own brands. For example in the consumables category, we conducted quantitative and qualitative analyses to understand the competitive landscape, consumer needs and Target’s unique advantages.
Our learnings led us to create a strategy around ‘Everyday Optimism’, which was about bringing a helpful, positive attitude to daily purchases. We brought this to life with the brand name ‘up & up’, supporting it with a vibrant identity across packaging design and in-store execution.
“The identity gives us the opportunity to deliver on both the ‘expect more’ and ‘pay less’ sides of our brand promise”Mark Schindele, Senior VP Merchandising, Target
Our work helped make Target one of the most valuable retail brands in the US. In 2009, the ‘up & up’ brand registered a 14% increase in comparable sales, and by July 2010, comparable sales were 21% higher than the previous year.