Have you ever walked into Target looking to buy a single item (e.g., milk) but walked out with a bounty of other goods you didn’t know you needed?
In industry parlance, that’s known as the “Target Effect,” which is driven in large part by the retailer’s mastery of…
… creating desirable in-house brands
Of these, 10 brands have cracked $1B in sales (the most recent was activewear line All in Motion) while 4 brands generate $2B+ a year:
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- Cat & Jack (Kids apparel)
- Good & Gather (food brand)
- Up & Up (household)
- Threshold (home decor)
Target capitalizes on the hottest trends
It does so by combining an analytics team (tracking search and social data) with an in-house design team (including chemists and material scientists).
Target also regularly gives shelf space to popular online D2C brands (e.g., Casper, Quip).
There is risk in these partnerships, though, as the company has a track record of launching competing in-house brands.
Some call Target’s copycat tactics dirty
Notably, luxe brand Burberry and shoe brand Vans have both sued the Minneapolis-based retailer for trademark infringement.
To be sure, copying is very much par for the course in retail:
- Amazon and Walmart have white label brands
- Zara and H&M rip off the latest runway designers
A fashion lawyer tells Fast Company most of Target’s moves are “perfectly legal” (though, we weren’t able to confirm this).