Ticking off 'guests' is a good thing for Target

By George Anderson, RetailWire

The following appears courtesy of RetailWire.com, an online discussion forum for the retail industry.

There are a lot of Target customers, AKA guests, who are unhappy with the chain this week, and the company's management couldn't be happier. That's because unhappy customers mean the chain has gotten some of its "TarJay" magic back after quickly selling out of items from its new limited-edition line from Lilly Pulitzer.

Target's website went down for 20 minutes on Sunday and pages were slow to process due to high demand for the luxury designer's mass market line. Stores also reported lines of customers who quickly went through the racks and cleared inventory away. The net result was that many customers who wanted to make a purchase from the 250-item collection were unable to do so.

Frustration at being unable to buy items from the collection led some to go on social media and broadcast their unhappiness with Target. The public grousing—along with some 26,000 items from the Pulitzer line showing up in a search on eBay—were a clear indication that Target had a hit on its hands.

The Lilly Pulitzer experience appears to be a virtual redux of the Missoni for Target launch in 2011, when items from that line were quickly bought up by fashion scalpers and resold at much higher prices on eBay.

Target company spokesperson Joshua Thomas told The Wall Street Journal, "We realize there is an extreme amount of excitement around this collaboration, and we apologize for any disappointment this may have caused our guests."

Disappointing guests, experts say, is a good thing in this case.

"This was a grand slam home run for Target," Marshal Cohen, an analyst with the NPD Group, told the Star Tribune. "Yes, they could have bought more, but what if they did? The fact that you can't get it makes it that much more coveted. ... And it makes consumers say, 'I'm not going to miss this next time.'"

Discussion Questions:

  • Is the Lilly Pulitzer for Target line a success, failure or a bit of both for the retailer?
  • What should Target change, if anything, for future designer launches in its stores and online?

Comments from the RetailWire BrainTrust:

Cathy Hotka, Principal, Cathy Hotka & Associates

What a bomb. Target basically offered merchandise it had no intention of selling. Is annoying customers really such a hot business move?

Dick Seesel, Principal, Retailing In Focus LLC

This is the biggest hit (and miss) since the Missoni introduction a few years ago. Yes, it's good for Target's brand cachet that they are forming successful alliances with wanted brands. But their feet must be held to the fire as far as poor execution and customer service. In what way is this fundamentally different from the problems that plagued Target when it couldn't keep shelves full in Canada, or when its website crashed after its Amazon alliance ended?

David Zahn, Owner, ZAHN Consulting, LLC

How many retailers (JC Penney anyone?) would have handed over their first-born child for this "problem"? Sure—it COULD have been better. I see this as a success in that we (and customers, and the media, and competitors, etc.) are talking about Target and how they sold out (this is not like selling out of a CSD—this is fashion, excitement, limited supply, etc.).

I vote for this as a terrific thing for Target.

Kelly Tackett, Research Director, Planet Retail

Target did several things right with this launch. The company picked a designer/brand that already had a dedicated following who likely already shop Target—unlike, say, Peter Pilotto. The assortment extended beyond apparel into other categories, which Lilly purists are likely to find more appealing from a quality perspective. Target also made some of the apparel available in plus sizes. Target needed a high-profile win in a core category. The scarcity issue and the subsequent publicity certainly accomplished that.

That being said, I doubt the assortment was large enough and the inventory deep enough to truly move the needle in terms of overall sales. Additionally, I don't think we can really judge whether Target has got its groove back from a single designer collaboration. I'll be convinced when I see a wholesale improvement in merchandising across the store, most specifically including the food aisles.

Did Target limit per-shopper purchase quantities for the collection? It should, if only to make it harder for the profit-seekers to hoard.

Joel Rubinson, President, Rubinson Partners, Inc.

I think it's probably a good thing, but I would have wanted to analyze social media before committing to an answer. To make it a great thing they should have given those in-store some kind of special insider's ability to get the out-of-stock items before others (maybe they did—not sure).

Peter J. Charness, SVP America, Global CMO, TXT Group

Let's see, from the retailer's standpoint, the margin was good, turns were pretty quick and the publicity was outstanding for the low cost. From the customer standpoint, it helps reestablish a "fashion-forward" leadership brand and helps set a sense of urgency in terms of buying now. Are customers disappointed that the products sold out before they got to them? Sure. Will they be shopping earlier and more often in the future? Probably.

Read the entire RetailWire discussion...