A drop in innovative marketing
Target has long collaborated with fashion designers and brands to create unique lines of products using a playbook that builds up hype before the collection drops on Target’s website. But with more shopping happening on platforms like TikTok, Target is missing out on using TikTok to sell the products, said the retail advertising exec.
“They have an old Rolodex with those collabs—it feels like two companies who are not at their best hoping that they can save each other,” they said.
Still, these partnerships appear to be paying off for Target. In April, Target partnered with Kate Spade to sell 300 apparel, accessory, and home products, resulting in “the strongest” partnership that Target has had in a decade, outgoing CEO Cornell said on the recent earnings call.
Changing how Target handles design partnerships and product launches is one of Fiddelke’s priorities, he told investors during the earnings call. He said Target is developing an effort called Fun 101 to revamp its hardlines products, which include things like electronics, appliances, and toys.
“To reestablish our leadership here, we need to go beyond the occasional design partnership or new product launch and ensure we’re bringing this authority across each category in our business throughout the year,” he said. “That will require change, and that change is happening.”
Target has also faced backlash for its handling of diversity, equity, and inclusion issues. In 2023, Target removed some Pride Month merchandise. And in January, Target ended some DEI programs that supported Black-owned businesses, resulting in a grassroots boycott.
Forrester’s Kodali called the boycott “a huge cultural issue at Target,” adding that some investors wanted Target to hire a CEO from outside the company to solve for these types of cultural issues. Incoming CEO Fiddelke is a 22-year veteran of Target.
“A lot of people think that there needs to be a completely cleaning of house to start over again,” Kodali said.
