
Can Target’s Private Label Products Help Them Compete? Three Brand Experts Weigh In
Target launched its first private label brand in 1984 with the launch of the Honors clothing line. These product lines are now called “owned brands” by the MULO (multi-location) retail giant, which now has nearly 50 owned brands, some of which they have begun to sell to other retailers, making Target a wholesaler and shopping destination.
A full list of Target’s owned brands can be found here. One source says that these private label options have generated $30 billion for Target.
Target’s market share is declining, and like many other big-box retailers, the company is innovating with a wide range of marketing tactics to stem the erosion. To pre-empt Amazon Prime Day, the retail giant introduced Target Circle Week and invested in a major ad campaign to get consumers excited (and spending).
We asked some branding and marketing professionals what they believe is the key to private label success. Here are their perspectives:
Strong Brand Reputation
“Some of Target’s private labels, like Good, Gather, and Auden, are already becoming household names.
For a private label to work, you need a strong brand reputation. Just look at the Trader Joe’s phenomenon—81% of people in the US shop there for its unique product offerings, like the beloved Everything But the Bagel seasoning. Similarly, Target is beloved by much of the general public. It continues to be one of the first to try out new retail innovations, so its forward-looking, dependable image can be reflected in its own labels.
But to stay competitive with other leading consumer goods on their shelves, Target will need to continue to innovate its products, as we’re seeing with the relaunch of brands like Auden.”
– Marcel Hollerbach, Chief Innovation Officer at Productsup
Targeting and Quality
“Target will need to focus more on specific labels to increase their success, which will lead them to focus more on each label’s ‘niche’ of buyers.
Quality will be a major issue as creating more private labels is effective; the quality and consistency of the products will need to reinforce the trust of the labels for sustainable growth.”
– Reilly Newman, Brand Strategist and Founder at Motif Brands
A Competitive Threat to CPG Brands
“We believe private store labels seriously threaten many CPG brands. These brands simply don’t anticipate that store brands enjoy as much as 18 to 20 percent of competitive market share in any given aisle. I’d classify Target as a leader in private labels precisely because it’s so much more than just Good & Gather or Up & Up. It goes back to 1999 when Target launched its Mizrahi and the model for the modern designer collaboration drop. We now see Walmart mimicking its strategy as well.”
– Katherine Cartwright, Co-founder and Principal at Criterion Global International Media Buying
Target is also investing heavily in technology innovation. Their most recent launch was the Store Companion chatbot, powered by AI. Its purpose is to empower team members to better aid consumers.
Perhaps it will steer shoppers to Target’s own brands to boost margins!