Target has built a sense that its stores offer something special that its biggest rivals simply don't have. That used to just be a feeling, or the chain's brand positioning, but now the retailer has actually partnered with brands that make its stores actually special.
While having a Starbucks, an Apple store, and Disney sections at its stores don't make Target (TGT) -) locations stand out on their own, taken together, the retailer has built a sort of mall concept. People go to Target not just because they need something, but because it's fun.
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That's something very few retailers have achieved outside of the treasure hunt model used by TJX Companies' (TJX) -) Marshalls, T.J. Maxx, and HomeGoods, and to a lesser extent Costco. These are places where the experience matters as much as the actual purchase.
Target has leaned into that in two ways. First, it offers its store-within-a-store concepts that include Starbucks, Disney, Apple, and Ulta Beauty (ULTA) -). It also has celebrity partnerships like its deal with Chip and Joanna Gaines' Magnolia brand.
Now, Target has combined its two concepts by having Ulta Beauty, which has stores inside more than 500 of the retailer's big box locations, will bring a new line from Rihanna’s makeup brand Fenty Beauty.
Image source: Kevin Mazur/Getty
Rihanna moves under Target's umbrella
Rhinanna has built Fenty Beauty around the idea of making it accessible. That actually fits both Target's business model and Ulta Beauty's. All three companies are looking to deliver top-quality products at reasonable prices.
Now, as of Oct. 1 the Ulta Beauty locations inside Target stores will offer a specially curated Fenty Beauty product assortment. Called Fenty Snacks, the new line offers some of the singer's company's best-selling products in mini sizes as well as in sets to give shoppers a "taste of the Fenty Face and a game-changing glow in a new, fun way," according to a Fenty Beauty press release.
"Our curated assortment — including Fenty's best-selling products, as well as new mini sizes and sets, will spark discovery and deliver affordable joy to our guests," Target Chief Merchandising Officer Jill Sando said.
This deal brings the Fenty brand to more consumers, which is in line with Rihanna's mission.
"The goal has always been to bring Fenty Beauty to as many people as possible. I'm excited to introduce the Fenty Snackz and give Ulta Beauty at Target guests a new way to experience our brand," said the award-winning singer.
Many of the items in the line will be exclusive to Target.
Partnerships are key to Target
Target has been building out stores that rivals like Walmart and Costco can't match by expanding its partnerships. CEO Brian Cornell talked about those deals during the chain's second-quarter earnings call.
"Within our merchandising, we'll continue to invest in our industry-leading owned brand portfolio, along with the expansion of key national brand partnerships, like Ulta Beauty, Levi's, Apple, and Disney," he said.
Target plans to expand how many locations offer Disney, Ulta Beauty, and enhanced Apple locations, according to Cornell.
The Ulta partnership has been successful, Chief Growth Officer Christina Hennington shared.
"Within our beauty offering, core beauty delivered double-digit growth, while sales from Ulta Beauty at Target more than doubled compared with a year ago, showing why we're so enthusiastic about this exclusive partnership," she said.
That happened in a quarter where overall same-store sales dropped.
Target also has plans to build one some of its celebrity offerings.
"Knowing how our guests can't get enough of Taylor Swift, we proactively secured an exclusive vinyl offering that Swifties bought in droves. Additionally, in home, we've seen incredible demand for Stanley tumblers and cups. So, we worked in partnership with Chip and Joanna Gaines to add exclusive new colors to the line as part of our beloved owned brand, Hearth & Hand, found only at Target," she said.
Target has struggled this year to please investors. The shares were down 12.6% in September, a down month for stocks generally, and are down 25.8% this year.
Costco was up 2.9% in the month and is up 23.8% on the year. Walmart was off 1.8% in September but is up 12.8% for the year. TJX was down 3.9% for the month but up 11.7% for the year. Ulta slipped 3.8% for the month and is off 14.8% for the year.
