At Target, It Seems Multichannel Means Something Very Different

At a time when most big retailers are living by the buzzword omnichannel, Target (NYSE:TGT) is making some odd moves. This week the chain announced it's buying DermStore, an online skin-care site. That comes on top of Target's acquisition this spring of online cookery sites CHEFS Catalog and Cooking.com. All three sites, which sell products as well as dispense advice and provide a gathering spot for potential customers, will now be the responsibility of Casey Carl, Target's president of multichannel.

What's so odd about that? None of the acquired sites will have any connection with Target's stores. No in-store promotion, no buy-online-pickup-instore, in fact nothing remotely like what we think of as a single online/offline experience for customers. Most customers won't even know there's a relationship, because Target's corporate name is nowhere to be found on the cookery sites, and it isn't likely to show up on DermStore after the acquisition either.

When Target says "multichannel," it apparently really means "multiple non-intersecting channels."

Back in March, I speculated that the reason Target bought Cooking.com was for its web store backend, which is used by a number of sites bearing the brands of celebrity chefs: Rachael Ray, Emeril Lagasse, Paula Deen and Betty Crocker.

Renting out the infrastructure for other specialty cookery sites seemed like a good way for Target to get money from those celebrity brands without signing exclusive, Martha Stewart-like deals. In effect, it would let Target become the Amazon of high-end cookery sites.

But there's no indication that any special e-commerce infrastructure or celebrity branding is part of the DermStore deal—or really, anything besides an online skin-care store. Like the cookery sites, DermStore will be set up as a wholly owned Target subsidiary. Target said the acquisition will "expand its share of the rapidly evolving online beauty market and will further differentiate the company's offerings in this important retail segment." Well, no, it won't—at least from the point of view of the Target shopper, who won't see these as expanded Target offerings. They'll just be the same old DermStore offerings.

A chain with less imagination might have cross-promoted, put CHEFS and Cooking.com kiosks in Target stores, maybe eventually opened DermStore shops within some Target locations. That way the e-commerce sites could become multichannel retailers themselves and Target could drive traffic both to its brick-and-mortar stores (because of the exclusive branded in-store shops) and to the specialty e-commerce sites.

That's apparently too conventional a notion for Target.

There's nothing wrong with buying up smaller retailers to be subsidiaries, of course. And maybe Target has a genuinely revolutionary idea that will leapfrog that simple online/offline promotion concept and give customers what they really want—not just shop-anywhere-buy-anywhere, but instead a true multichannel experience that the rest of retail just isn't sharp enough to see yet.

Sure, that could happen. Until it does, Target's multichannel tactics just look very odd indeed.

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