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Target Urges CE Vendors To See Red

Through a savvy combination of business acumen and art, Target has managed to turn discount retailing on its ear.

With its unique blend of Gen X imagery, exclusive assortments, designer brands and fashionable but affordable products, the upmarket merchant has managed to bring new pizzazz to such staid categories as housewares, home textiles and even detergent.

Now, Target is turning its big merchandising guns on consumer electronics, and hopes to reinvent the black-box business in its own lipstick red image.

That was the message delivered to manufacturers at Target’s biennial CE vendor meeting, held here last week near corporate headquarters. Chaired by Steve Eastman, VP/merchandising manager for electronics, with presentations by Target vice chairman Jerry Storch and other top execs, the conclave pitched suppliers on a collaborative future of co-developed, comprehensive and stylishly differentiated programs that deliver on the credo “Expect more. Pay less.”

“A one-size-fits-all approach ignores great brands,” Eastman told the hundreds in attendance, which included representatives from such Target suppliers as Canon, Fuji, HP, Microsoft, Panasonic, Philips, Sony and Thomson. By thinking more strategically, acting more intuitively and working more cohesively on long-term idea creation, vendor and retailer can achieve a “holistic integration” of innovative product, packaging and merchandising that will help set Target’s CE assortment apart from specialty chains and other mass merchants, he said.

By the same token, stressed executive VP/stores Bart Butzer, manufacturers can benefit from Target’s powerful marketing mojo. “We’re branding experts,” he said, pointing to the company’s iconographic red bulls-eye. “We can showcase your brand in ways no competitor can match.”

Noting that Target is better at presenting assortments than individual products, Butzer and other executives cited Sony’s landmark Liv line of small electronics, which has become the template for the retailer’s CE strategy. The three-month-old program, replete with its own unique packaging and white and lime color story, represents Sony’s first-ever dealer-specific assortment, and is already performing well above projections.

The collection, boasted senior VP/marketing Michael Francis, has helped turn Target’s target demographic of well educated, 18- to 49-year-old, upper middle-income women from non-CE buyers into “raging audiophiles.”

One reason for Liv’s success, observed senior audio buyer Rich Melton, is that young females are not being served by a CE industry that produces “big, bold pieces” as part of its male focus.

Another reason, said Melton, is that the collaboration brought together Sony’s “great design team and great brand” with Target’s “great presentation and great merchandising team.”

Another joint CE effort cited was the launch of Virgin Mobile cellphones and accessories (see story, p. 34) wherein Target’s visual merchandising and packaging teams helped create a “strong brand presence” by displaying the assortment on eye-catching, dedicated end-caps, said electronics buyer Bob Fust.

Indeed, merchandise presentation and packaging are key components in explaining product and creating a unique shopping experience. “In many cases we’ve reinvented the packaging,” said audio buyer Damu McCoy, much of whose assortment appears in sleek, bubble-shaped blister packs. Similarly, video electronics buyer Kirsten Jacobs tells her good, better, best accessories story through consistent, color-coded packaging.

Also giving heft to Target’s CE statement is the imprimatur of architect Michael Graves and designer Todd Oldham. Graves, who shocked the product design community by developing a Target-specific housewares line, has created a new home office grouping, including a wireless keyboard and a mouse-and-calculator desk set, that will debut in October.

Likewise, Gen X icon Oldham has lent his name to a multi-category back-to-college collection that includes indoor antennas and remote controls.

Explained hardlines design manager Patrick Douglas, “Target’s electronics consumer is different from the big-box consumer, so we need to re-invent the way CE is sold.”

“We want to make buying electronics at Target a fast, fun, friendly experience,” emphasized senior VP/hardlines Bob Guelich, who stressed the importance of the category as a traffic builder. “We are truly committed to electronics. We’re not a specialist, but there is no general merchant as committed to CE as we are.”

So far, Eastman reported, the formula is working. “We significantly grew market share in every category this year,” he said. In the process, CE sales are expected to climb 16 percent, doubling 2001’s 8.1-percent gain.

Eastman told the audience that besides his long-term collaborative goals, he also has a more immediate objective: to go from fifth place to fourth on next year’s TWICE Retail Registry.