Lauren Clark Winter 2012 · This success can be, in part, due to the strong promotional strategy that created excitement for the collection before it was launched. Customers arrived

Lauren Clark Winter 2012 LXFM 730

Executive Summary

In September 2011 Target announced it’s most anticipated designer collaboration – Missoni. Target’s partnership signified the ongoing trend of mass marketers teaming up with fashion houses.

The collection was meant to be available for about five and a half weeks in Target stores and on their website. However, it sold out within the first day in stores and online.

Part of the reason why the collection was so successful is due to the marketing campaign. Target used multi-channel marketing tactics to reach customers and build anticipation for the launch of the line.

This report will cover every aspect of Target’s marketing campaign and it will explain why their collaboration with Missoni was so successful.

Brand Description

In 1902, George Dayton purchased land in Minneapolis and formed the Dayton Dry Goods Company- today, known as Target Corporation. Since the beginning, Dayton’s store was known for dependable merchandise, fair business practices, and a generous spirit of giving. The company expanded to be known as a department store because of their wide assortment of goods and services. In 1961, The Dayton Company entered the discount retailing industry. President Douglas Dayton stated that the new store will “combine the best of the fashion world with the best of the discount world, a quality store with quality merchandise at discount prices, and a discount supermarket…75 departments in all.” The Target name and logo was created a year later.

Target now has over 1,760 stores and 355,000 employees. Target has stores in every U.S. state except for Vermont. In 2005, Target exceeded $50 billion in annual sales.

Today, Target offers merchandise ranging from clothing, home décor, furniture, grocery, electronics, entertainment, and pharmacy.

In addition to current merchandise, Target has had collaborations with famous design houses- William Rast, Jean Paul Gaultier, Alexander McQueen, John Derian, Jason Wu, Calypso, and of course, Missoni.

Product Description

The most recent Target collaboration is with the iconic Italian fashion house Missoni. Launched Tuesday, September 13, 2011, the collection was supposed to be in stores and online until Saturday, October 22, 2011. However, it sold out at most stores and online within one day. A variety of online-only items are still available on target.com.

The limited-edition collection of 400 items included clothing and accessories for women, men, and children as well as home goods such as bedding, dinnerware, stationery, and décor. Everything in the collection has the hallmark zig-zag colorful patterns that Missoni is known for.

The Missoni for Target collection is a limited edition line and is only available during the set dates of September 13 to October 22. This strategy follows Missoni’s own company product positioning. Missoni is available in their own stores and high-end retailers such as Neiman Marcus and Barney’s. There’s a certain exclusivity to this luxury brand.

By only making the Missoni for Target collection available for about five and a half weeks, there’s a feeling of exclusiveness, even if it is the Target version of the brand. However, we know that the collection only lasted in stores for a day and the online demand was so high, Target’s website crashed. By following the same strategy of the original brand, Target and Missoni were able to carry over Missoni’s exclusivity.

Product Positioning

With the Missoni for Target line, Target is still targeting toward their current customer. However, this customer may not currently buy clothing at Target. They shop at Target for school supplies, groceries, or other needed items.

With the economy still in a recession, it’s now acceptable for the “Vogue customer” to shop at Target and to brag about the money they saved. Target’s goal is to cross-sell, which means to bring in a customer for one item and then have them leave with six bags of other items they weren’t planning on purchasing.

Because Target is a mass retailer with stores across the United States, they reach a majority of American consumers. By Target bringing in well known designers like Missoni, they’re trying to reach more customers by carrying limited edition brand name products.

Product Target Market

Market Trends & Competitor Analysis

Market Trends

The concept of luxury fashion houses partnering with mass-market retailers has grown exponentially in recent years. Consumers are expecting luxury items at bargain prices so retailers are wanting to meet those demands.

The recession has forced customers to look for deals and they’ve stopped spending excessive amounts of money. On top of designers creating their own diffusion lines, retailers have created collaborations with designers in order to provide their customers with luxury items at lower price points.

Not only are customers satisfied, but the designers also are. The collaborations have proven to be profitable for the design houses. Inside sources have said that the designer fees have generally more than doubled over the last five years.

Competitor Analysis

More than a decade since Target first popularized collaborations between high-end designers and mass retailers, other retailers have followed their lead.

H&M has partnered with designers such as Lanvin, Karl Lagerfeld, Stella McCartney, Roberto Cavalli, Matthew Williamson, Jimmy Choo, and Versace.

Kohl’s has ongoing collaborations with Vera Wang, Lauren Conrad, Jennifer Lopez, and Marc Anthony.

Macy’s also teamed up with Karl Lagerfeld for “Karl Lagerfeld for Impulse Only at Macy’s” collection. Giambattista Valli also has a collection at Macy’s.

Competitive Advantages & Differentiation Factors

Competitive Advantage

Target has a perception of being a “higher end” mass-retailer. The stores are cleaner and easier to navigate than other stores like Wal-Mart. This gives them an advantage in the industry because people want to shop in clean and customer-friendly stores.

Target also pioneered the retailer-designer collaboration more than a decade ago. An article from 2Threads states Target as the “pronounced leader in cheap, chic fashions.”

To stand out in a large market of mass retailers, Target has begun to offer exclusive shops known as “The Shops at Target.” These shops will sell everything from candy to clothing. Target takes efforts to create an unique shopping environment that one can’t find in other mass retailers.

Differentiation Factors & Unique Selling Proposition

Target has the following characteristics that differentiate themselves from other mass-retail stores and make them unique:

• Conveying an environment of exclusivity due to the design partnerships and the limited edition collections • Providing luxury items from esteemed fashion houses at budget conscious prices • Building and maintaining customer relationships through customer service and marketing tactics • Offering value to the customer through designer collections • Providing quality products at lower price points

The price range for Missoni for Target collection ranges from $2.99 to $599.99, with most items less than $40. The items that go up to $599 are higher than traditional Target merchandise but the smaller accessories are around the same price point as other Target items. However, Missoni for Target is much lower than the Missoni collection. A Missoni cardigan at Target is priced at $49.99 while a Missoni cardigan is, on average, around $950.

The Missoni clothing and accessories at Target feature the same iconic zig-zag pattern as original Missoni clothing; therefore, Target is allowing customers the designer value at lower prices.

Pricing Strategy

The Missoni collection was available at all Target stores and on target.com. The collection was supposed to last for five and a half weeks but quickly sold out in stores and online during the first day of availability.

The distribution strategy had exclusivity because the Missoni and Target collaboration was temporary and no re-stock of inventory was planned. Once items were sold out, they were sold out.

However, Target did plan on having select items on their website for longer than the collection would be in stores. There are still some accessories available online.

Given the build up and anticipation of the line launch as well as the limited amount of inventory, an “immediate need” attitude was formed by the customers.

Distribution Strategy

To build anticipation before the launch of the Missoni for Target collection, Target released a multi-faceted marketing campaign. The campaign included online, television, print, and other types of tactics in order to be successful.

Angela Missoni, the daughter of the Missoni founders, stated that they really wanted to reach a large audience. She said “as Missoni, we have a big name but we are not a huge company, so there’s not much product around.” The objective of the campaign and product line was to expand the Missoni image in the United States and to promote the brand as being young and fresh.

Marketing Campaign Objectives

Missoni thought that some Americans may be confused on how to mix and match the brand’s bold colors and patterns. To prevent that, Target created a web campaign that included videos that gave customers tips on how to incorporate Missoni’s prints and colors into their lives.

Customers who watch the television ads online can click on products during the video and a pop-up window will appear with more details. Customers could then add the item to an online shopping cart without leaving the video.

The website also offered a selection of items called “Margherita’s Must Haves.” As viewers clicked through the products they like, they would see recommendations on how to combine those items with others.

Marketing Promotion - Online

The Target ads for television featured Margherita Maccapani Missoni, the granddaughter of the founders, with soundtracks reminiscent of the 1960s. In the ads, Margherita is carrying a postcard with a secret message that is revealed after she is seen talking on a rotary telephone, having cappuccinos at a café with a friend, and walking into a dining room decorated with Missoni products. The secret message is “Missoni for Target.”

“It makes sense that someone within the family will be the face of the brand,” Margherita said of her role in the campaign.

Marketing Promotion - Television

Print ads, like the one above, ran in magazines including Elle, Elle Décor, Harper’s Bazaar, House Beautiful, and Interview. Target also ran a 20-page insert in the September issue of Vogue. For the first time, Target ads ran in a foreign publication, Vogue Italia. Margherita was also featured in some of the print ads.

There were also product placements and spotlights in magazines featuring select items from the Missoni for Target collection.

Marketing Promotion - Print

About a month before the Missoni collection launched, the official lookbook was released. The lookbook was rapidly spread over the Internet, allowing customers to get a sneak peak of the items.

The lookbook served as another marketing tactic and further raised the anticipation among customers. The customers could pick out their favorites and already know which items they wanted to buy for when they became available in stores and online.

Marketing Promotion - Lookbook

Target participated in events like Fashion’s Night Out during Fashion Week in New York and opened a pop-up store on September 8 near Bryant Park, featuring items from the collection.

This allowed customers the ability to preview the collection before it was available to purchase. Angela and Margherita were at the opening event of the pop-up store to take pictures with the first customers who spend more than $100.

Marketing Promotion – Fashion’s Night Out

Without the benefit of looking at sales figures, one can conclude that the Missoni for Target collection was a great success. The collection sold out in stores in one day and crashed the Target website on the day the collection debuted in stores.

This success can be, in part, due to the strong promotional strategy that created excitement for the collection before it was launched. Customers arrived at Targets across the U.S. hours before the store opened in order to be one of the first to buy a Missoni item. Customers even went as far as to steal items out of other customer’s shopping carts. This example proves how successful the Missoni line was.

Results & Success Factors

The Missoni collection has been long gone from Target shelves, but select items are still available on Target’s website. Many of the products listed on Target’s website say “out of stock online.” However, smaller accessories like electronic cases and headbands are still for sell online.

Some items have even popped up on sites like eBay and Craigslist. Customers who were able to buy products in Target stores have placed them on these websites and often raised the price due to the rarity of the products.

Current Status of Product

Target experienced exceptional success with their collaboration with Missoni, more success than past design partnerships. Target should continue to team up with other respected design houses and follow a similar marketing and promotion strategy that they used with Missoni. This strategy has proven to be successful in building excitement and desire within the customers.

A large part of the success is in who Target partners with. In future collaborations, Target needs to pick strong design houses that already have strong brand identities, like Missoni. Target’s next design collaboration is with Jason Wu and his designs will be available in stores and online on February 5.

Recommendations

http://www.nytimes.com/2011/11/17/fashion/designer-retailer-union-remains-lucrative.html?pagewanted=all

http://www.thestreet.com/story/11259293/1/target-not-alone-in-designer-collaborations.html

http://fashionista.com/2011/11/a-closer-look-at-mass-retailer-collabs-how-much-designer-actually-make-off-of-them-and-how-success-is-measured/

http://www.fashion-law.org/2011/07/designer-mass-retailer-collaboration.html

http://www.foxbusiness.com/industries/2012/01/12/target-to-host-boutiques-and-apple-in-stores/

http://community.cengage.com/GECResource/blogs/marketing/archive/2011/09/15/missoni-for-normal-consumers-target.aspx

http://www.nytimes.com/2011/08/08/business/media/target-campaign-for-missoni-line-recalls-60s-italian-films.html

http://www.target.com/s?searchTerm=missoni&category=0%7CAll%7Cmatchallany%7Call+categories#navigation=true&viewType=medium&sortBy=relevance&isleaf=false&parentCategoryId=0&RatingFacet=0&productsCount=219

http://pressroom.target.com/pr/news/news.aspx

http://fashionista.com/2011/08/here-it-is-the-full-missoni-for-target-lookbook/

Sources