Target's two-pronged attack: Dollar deals and designer dreams

Becca Mchaffie - UnSplash

The retailer is trying to attract budget-conscious consumers and those with an eye for fashion

This may be a stretch, but Target’s latest moves suggest that it’s going to play two ends against the middle and smack both the dollar stores and the higher-price retailers where it hurts.

Just a matter of weeks ago, Target unleashed a new budget brand – “Dealworthy” – where products start at $1.99, just pennies away from what Dollar Tree and others use as price points.

Now, the company has decided it’s going to take on women’s fashion retailers like H&M. Target's new Diane von Furstenberg clothing line which features iconic pieces like the wrap dress, is likely targeting customers who appreciate designer fashion but are also looking for affordability.

The collection's price points, with most items under $50 and starting at $4, price points that have been the underbelly of H&M’s value-focused success since its beginning. 

The assortment certainly has heft. It’s got more than 200 pieces that span women's, girls' and baby apparel and accessories, plus beauty and home decor. Target is also throwing H&M a gotcha by offering made-to-order furniture starting at $300 as part of the collection which debuts on March 23. 

"Our partnership with Diane and Talita von Furstenberg represents Target at our best — curating an amazing and distinct assortment and offering it at exceptional prices," said Jill Sando, executive vice president and chief merchandising officer of apparel & accessories, home and hardlines, Target.

"Guests will fall in love with this inspiring and broad collection. There's so much to spark joy, just in time for new spring looks — available only at Target."

What’s Target got up its sleeve next?

Target's dollar store'ish hoopla and its collaboration with Diane von Furstenberg can only go so far. Once it takes enough market share with those two weapons, the company has a serious decision on its hands.

Given the current strategies, Target may try to keep wooing consumers like this:

  • Keep expanding its partnerships with well-known brands and designers to offer exclusive, limited-time collections, which have historically driven traffic and sales. In other words, after von Furstenberg, it’s possible Target shoppers could find themselves beset with short-time offers from Calvin Klein, Donna Karan, Ralph Lauren, and Norma Kamali.

  • But, we’re also going to have to wait and see how well the Dealworthy brand does, too. If there’s enough fire there, it’s possible that Target could totally reframe stores to have a Dollar Tree’ish feel. 

But, whatever it does, it has to make it seem interesting.

“That's why the chain has partnered with Starbucks, Walt Disney, Apple, and Ulta Beauty while also having affordable takes on luxury brands like its Kendra Scott and Chip and Joanna Gaines merchandise lines,” says TheStreet’s Daniel Kline.

“CEO Brian Cornell has been very careful about cultivating the "Tar-Jay" feeling which makes the brand a destination. People shop at Walmart and Dollar General because they're convenient and cheap. Customers visit Target because it's the new mall, a store packed with interesting merchandise, experiences, and decent pricing.”

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