Big box retailer Target (TGT) has a significant competitive advantage over its grocery competitors, including Walmart (WMT) and Amazon (AMZN), with its wide ranging collection of home decor.
Target Chairman and Chief Executive Brian Cornell counted the home decor category among one of the company's top priorities when he took charge of the company in 2014.
“The categories we’re going to stand for, the ones I call our signature categories—they’re the ones that can differentiate the brand going forward. So you’ll see us elevate our focus around our style categories, apparel, home, beauty—critically important categories for our guest—and we think we can differentiate in that space," Cornell said over seven years ago in 2015.
That has, among others things, translated into an exclusive partnership with Chip and Joanna Gaines, the television power couple behind the lifestyle juggernaut Magnolia.
The partnership resulted into one of Target's flagship brands for home and lifestyle goods, Hearth & Hand with Magnolia, which came out in 2017. The collection includes everything from rugs to patio furniture with a wide price range. Target says most of these items are priced under $29.99.
Target surpassed $100 billion in sales for the first time at the beginning of 2022, reporting $106 billion in total annual sales for the 2021 fiscal year. Rivals Walmart and Amazon reported annual revenue of $572.8 billion and $469.8 billion respectively.
Home (Decor) Turf Wars
Walmart now wants to change things up in this market and get a share to spruce up your garden or patio.
The country's largest retailer has announced a similar partnership with Dave and Jenny Marrs, stars of the HGTV home remodeling show. On television, the celebrity couple renovates houses.
The new furniture lineup includes neutral colors and handcrafted materials such as natural wood and clay, chunky open weaving, and antique brass, all of which reflect Dave and Jenny's own style, Walmart said.
Walmart
The Walmart-exclusive collection debuts with 30 outdoor home and décor items including planters, rugs, throw pillows, lanterns, a wide porch swing, and an outdoor dining table.
Walmart's move is the latest in a long-term effort to boost its home department unit, which generates higher profits than the company's main food and grocery business, the company said in its Q4 earnings call.
Walmart Senior Vice President Julie Barber told Bloomberg that the deal is part of a larger goal to become a "one-stop-shop" for customers.
"Categories like sporting goods, hardware, automotive, paint and outdoor living are important to Walmart," Barber added.
"Over the past few years, customers have viewed their outdoor spaces as curated design extensions of their indoor living spaces, and we see this trend continuing," Barber told BizWomen.
Walmart's price range is competitive to Target's, starting from $12, but the ante goes further up to a steep $1000 if you want the sturdy porch swing or the dining table both made with teakwood.
Walmart reported strong sales at the end of the holiday quarter due to the strength of its food business despite supply chain hurdles.
Walmart's sales increased by more than $23 billion at the end of FY 2022 and the company gained significant market share in food and consumables.
