Lack of Brand-Building Competency

Leads to Lost Opportunities

As the most innovative mass merchandise retailer, Target decided to build a portfolio of “owned” brands (brands built by Target that competed against national brands) that would deliver upon its upscale brand promise. Its goal was to capitalize on the emerging industry trend of retailers’ building their own brands, instead of just offering the traditional private label, generic merchandise.

 

Target was in a strong position to develop a portfolio of owned brands because of the equity and strength of the Target retail store brand; and its strong team of merchandising managers and sourcing partners. The only missing ingredient for Target was the development of an owned-brand strategy and brand-building competency extending across all its merchandising categories.

Improve Owned Brand Management Competency

Target asked Brand Tool Box to develop and implement a multi-year initiative to develop an owned-brand management competency across all merchandising departments. Brand Tool Box worked closely with the senior marketing and merchandising management leaders to develop a storewide, department-by-department owned-brand strategy.

The initiative was implemented using the following framework:

  • Brand Tool Box worked with Target’s senior marketing and merchandising leaders to develop a storewide brand strategy framework that would be implemented in every merchandising department. An owned-brand strategy process template was created for use by each department. The elements of the process template included an assessment of current consumer segments, analysis of current national and owned-brand mix, future trends in the category, product quality standards and an assessment of merchandising sourcing partners.
  • Brand Tool Box worked with merchandising teams of each department to implement the owned-brand strategy template. The first step was to decide which owned brands were needed to refocus its overall category management strategy, including developing new brands if necessary. 
  • Senior buyers of each department led an owned-brand team to source new innovative product assortments for each of the strategic owned brands to be used by the department. 
  • After the owned brand strategy was completed for a merchandising department Target selected a package design agency to redesign the packaging for the departmental owned brands. 
  • Every quarter an owned brand review was conducted to ensure consistent use of each owned brand. 
  • Target created a global quality assurance team to test product quality for each item that used a Target owned brand. 
  • A brand management training class was integrated into the on-boarding process for new merchandising employees. The class was a customized version of the Brand Tool Box Brand Management Principles workshop. 
  • To spread enthusiasm for its owned brands within the Target stores, a CD-based training program was developed to inform and excite store employees (100,000 team members). The training shared information about the new portfolio of owned brands. 

Using Improved Brand Management Competency to
Launch Nationally Recognized Owned Brands

Target further reinforced its image as an innovative retailer by becoming the first US retailer to fully implement an owned brand strategy. Some notable results include Target’s Cherokee brand was the fastest retail owned brand to reach $1 billion in sales (two years), a number of hard lines assortments outsold their national brand counter part within one year and its Archer Farms owned brand was responsible for Target turning around its flagging grocery business.

 

The addition of the new organizational brand management competency enabled Target to greatly enhance their category management activities, promoting improved financial performance and product innovation. As Target’s owned brands built more equity and trust with its consumers, the Target retail brand grew even more valuable.

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