The brilliant Hallie Wright came down the hall for this lively discussion on the confusing moves Target is making to win? or just keep? consumers. But which ones. Let’s get to the bottom of this.
[00:00:01] Adam: Okay. Welcome back to another episode of the Strategy Inside Everything. We’re going to have a very, very interesting chat today. This guest had to travel all the way down the hall.
[00:00:16] Hallie: All the way from the cubes.
[00:00:18] Adam: Do we have a hall?
[00:00:20] Hallie: Open concept.
[00:00:22] Adam: I’m really excited because Hallie Wright is joining us, who is a member of the staff here at Santy, is on my team. I get to bask in her brilliance every day. Hello Hallie.
[00:00:34] Hallie: Hello.
[00:00:34] Adam: Welcome to the Strategy Inside of Everything. Are you amazed by the splendor of our studio?
[00:00:39] Hallie: This definitely doesn’t look like your office. It has a different sheen to it when you’re recording.
[00:00:46] Adam: It’s different. It’s different when we’re recording for sure. Hallie, would you do me a favor and give the people a little bit of information on where you’ve been, who you are, just so they have some context about what we’re going to talk about today.
[00:00:57] Hallie: Yes. My name Hallie Wright, as Adam mentioned. I’m the Senior Communications Strategist here at Santy. My background is mostly on the brand side actually. I’ve worked for a few different brands. I started out in non-profit, and worked for Big Brothers Big Sisters. Have worked in women’s health a little bit at a startup here in Scottsdale. Spent some time in beauty at a brand called Philosophy. Also, had a short stint selling Yeti’s and Sasquatches with a little something you may know as SkyMall.
[00:01:38] Adam: My favorite. I always bring up Hot Diggity Dogger. That is my favorite SkyMall product of all time.
[00:01:44] Hallie: That was good. That one was great. Also, the inflatable pillow that goes on your tray table in-front of you.
[00:01:51] Adam: Yes. You could sleep like a very sad person. SkyMall was full of sad people gifts.
[00:01:58] Hallie: Yes. No. Absolutely. SkyMall was not as entertaining as one would have hoped.
[00:02:04] Adam: Probably not from the inside.
[00:02:04] Hallie: [laughs] Not from the inside, no.
[00:02:08] Adam: I guess not. But, it positions us very well for today’s conversation. Hallie brought some insights about a brand that is near and dear to probably most of the people listening to this, or at least it’s a brand that we’re all familiar with which is Target. Some of the changes that they’ve made. We wanted to dig in and talk about, what do we think they’re trying to do strategically, who do they think they’re trying to reach. Why don’t you give us a little bit of a background into what interested you about that? Those changes and what they’re doing?
[00:02:39] Hallie: Target announced earlier this year that they are phasing out a couple of their in-house legacy brands, so Mossimo and Merona. Mossimo was around prior to Target.
[00:02:51] Adam: I think they acquired it.
[00:02:54] Hallie: Merona has always been an in-house brand. They have decided to start phasing out those brands. Bringing in, I think 12 new, more boutique style brands. It’s a part of this whole move from trying to not be perceived as a big box retailer that’s super homogeneous and something for everybody. Instead having these one off brands in-house, that will appeal to a bunch of different niche consumers.
[00:03:21] Adam: Are all 12 of those brands, is that all clothing?
[00:03:23] Hallie: No.
[00:03:23] Adam: Or is it across categories? What is it?
[00:03:26] Hallie: Yes. It’s fashion and home goods I think are the only two categories that they’re doing that’s in right now. They evidently phased out their children’s fashion brand last year, Cherokee and replaced it with one called Cat & Jack, which apparently is doing really well. It’s interesting. I saw a couple of headlines about that. As I dug into the topic a little bit more. It looked like they’ve got a bigger strategy as you would expect to take on Amazon. To try and stay competitive after falling sales. Besides launching these in-house brands, they’re doing some updates to their supply chain which I just saw a headline about that they’re trying to make moves in the same day delivery space.
[00:04:38] Adam: Yes. Everybody’s fighting for that space, right?
[00:04:43] Hallie: The other thing is they have this whole localization strategy. They’re opening up small format Targets in places like Tribeca. I guess that one’s been around for a while. But, they’re doing more to try and meet those needs. It’s just interesting I think they’re trying to move towards being like Targee not actual Target.
[00:05:07] Adam: Right. Well, remember they had that strategy that are in that name or they had designers do limited engagements or whatever, pop-up shops inside of Target, however the press release phrase it. I refer to it as Selling Shit at Target but they had a name for it, of course.
[00:05:24] Hallie: It’s odd. I mean as a consumer which everybody is, I just wonder what is the perception? From everything I could see, people love when those things that come out. When Victoria Beckham releases sweaters at Target, everyone goes crazy. I don’t know if this is just me as a marketer being like super suspicious of this kind of activity.
[00:05:50] Adam: We’re cynical bastards.
[00:05:53] Hallie: Yes. But even like walking down the beauty isle, we were talking about this the other day. Walking down the beauty isle at Target, a ton of shelf space is dedicated to these premiere, more niche brands. When I’m really only going there to buy Dove or buy whatever.
[00:06:11] Adam: Give me an example of one of those brands that you’re talking about.
[00:06:18] Hallie: I mean, I honestly don’t even know. Pacifica, I think is one of them. Basically, they’re just like they look more crafty.
[00:06:25] Adam: They look bespoke.
[00:06:27] Hallie: They look extremely bespoke.
[00:06:28] Adam: One of my favorite words. They’re authentic.
[00:06:31] Hallie: Extremely authentic.
[00:06:31] Adam: But are they high? What’s the price point?
[00:06:34] Hallie: But also, two times the price point of normal Target shit that you buy in the beauty aisle.
[00:06:38] Adam: I have a lot of questions about that. One is, do you just think that’s price framing? Do they have Pacifica there at $16 to sell move Dove at $4 to make or $6 feel like a value over what I can get at CVS for the same container?
[00:06:56] Hallie: Maybe.
[00:06:56] Adam: Or is their customer someone different than I think it is who really is going there? Because if you want Pacifica or upscale, upmarket skincare, don’t you go to another store? You don’t go to Target for that, do you?
[00:07:14] Hallie: Historically, no. Beauty is a little bit different. There’s this whole idea of masstige they call it, for beauty which is you have your mass market products. Then, you’ll have masstige products which are like the higher-ends like Olay Regenerist version of Olay. They just market it in the way that the ingredients are supposed to be a little bit more premium. You’re still in this big box environment but you’ll pay a little bit more.
I think this seems to be a newer strategy at least at the scale of bringing in, truly more upscale products and putting them right next to or down the aisle from the more traditional Target brands. It’s weird. My thought process, as I was going through that aisle, and I wonder if this happens in home goods and then in the fashion sections too, but I’m still at Target and that devalues this brand for me. I’m skeptical.
[00:08:15] Adam: That’s the other side.
[00:08:16] Hallie: Yes. For me, again I don’t know if this is me being cynical or if this how other people feel, it’d be interesting to find out. Just the fact that it’s in Target kind of devalues it for me. I love Target. But, I’m not going there to buy premium brands.
[00:08:32] Adam: If it was something that you used to have go to a specialty store to get and now they have their discount line. We see a lot of brands who want to get into the distribution of Target, so they create a lower priced version or an extension, that’s a discount of extension to fit the Target model. But then, when I see that, then when I go to the specialty store, I’m like, “I can just get that at Target. It’s not special anymore.” I’m certainly not going to pay the price they’re asking for it here, I know I can get it for 20% of that at Target for some lesser version of it. That’s the balancing act, right? It’s mass reach versus premium positioning. It doesn’t seem like you can have both.
[00:09:13] Hallie: Yes. I don’t think so. I mean I wonder who they really believe their core consumer is because there’s a lot of press out there about this new move, with these new brands. There’s certainly demand for it from a certain segment of consumers. But I kind of wonder like, your general Target shopper, what this says to them? Because definitely the price point is going to be higher, just going back to fashion than the other products that they have available to them in that space.
I don’t know. Even in some of the press briefings and stuff that I was reading, they were saying they’re compete directly with J. Crew or with Zara or with H&M. That’s kind of another piece. Now, I’m just talking in circles about.
[00:10:02] Adam: That’s okay.
[00:10:04] Hallie: Everything involving this topic but– [crosstalk]
[00:10:05] Adam: Well, that sounds complicated than this is but especially for brands like Target that are full-service retail where they sell everything from my Oreos to my clothing. That’s why they’re so fucked.
[00:10:17] Hallie: Right, yes. There’s this whole idea of fast fashion now which is that there’s not two seasons anymore from new product. It’s all the time, H&M’s constantly releasing new product. Another move that they’re making with these new brands is instead of releasing new product quarterly, they’re going to be releasing new product monthly, giving people more reason to come in and see newness.
[00:10:39] Adam: That’s why they’re doing it under 12 labels, huh? They’re going to have so many labels so they can always be rotating and make it feel fresh over all 12 of those.
[00:10:46] Hallie: I think they’re doing it, they want each brand, and so they’re not all fashionates, [unintelligible 00:10:51] but they want each brand out like a distinct personality and be special for a certain consumer. Oops, I slapped my laptop over. Here’s the whole thing, that I just don’t know that I’m going to Target looking for that.
[00:11:07] Adam: Yes. Well, I agree.
[00:11:08] Hallie: Yes. I really wonder, what the thought process is.
[00:11:16] Adam: Well, who do you think their Target shopper is? If we go back and we’ve watched Target lose its way, first, they were pre-grocery, before they went all in on grocery.
[00:11:28] Hallie: Super Target.
[00:11:29] Adam: Yes. They were going up and saying, “We’re just like Walmart.” They had a very price-conscious presentation. Then, they started the grocery thing. They’re much more expensive than Walmart. You can’t compare them. Their selection is not as good. Then you compare them with H&M and it’s like, I don’t shop at H&M so I’m not the market for that, but the style at H&M to me makes more sense. That fast fashion, I get it. I’m going to spend 10% less than I would to buy the real thing. I’m going to wear it three times and it’s going to rip. But at Target, I look at it and it’s always a little Searsy. They don’t quite nail it. The shape is a little off. H&M does a good job of making it look like a paper replica of the real fashion that I want. Target just misses on that.
[00:12:20] Hallie: I think that’s where they’re trying to go. I think they’re trying to be a legitimate replacement for H&M and just more convenient. What’s interesting is they can’t really differentiate anymore on value. They can’t really differentiate anymore on ease or convenience so they have to be something else.
[00:12:42] Adam: What is that? What is the thing they’re trying to be, that I can fill my basket with essentially anything that I need, I might get there if I need to buy hardware or if I [chuckles] need to buy a video game cartridge or if I need to buy clothes-
[00:12:57] Hallie: Yes.
[00:12:58] Adam: -and mayonnaise?
[00:12:59] Hallie: I think what they’re trying to do is just validate, provide some sort of that surprise factor, like, “Oh, you got that at Target?” I think they’re just trying to be legitimate in that space.
[00:13:20] Adam: What’s the brand value with that? If you and I meet and we haven’t seen each other in a while and I say, “Oh, I really like that bag,” and you say, “I got it at Target,” what does that mean for the brand then, I wonder? Is that really what they’re going for is that kind of unexpected finds or something like TJ Maxx?
[00:13:42] Hallie: That’s interesting, yes. I don’t know. It seems like a concession like during that conversation if you’re like, you’re talking to someone and they’re like, “Oh, I just got it at Target.” I don’t know that that brings the brand up necessarily-
[00:13:57] Adam: Yes, that’s a super good point.
[00:14:00] Hallie: – levels you out.
[00:14:01] Adam: Right, yes. You get the compliment and then it’s self-effacing to say, “Well, I just got it at Target.”
[00:14:06] Hallie: Yes. I mean, and again, love Target-
[00:14:08] Adam: Yes. Right.
[00:14:08] Hallie: [laughs] – buy shoes there all the time.
[00:14:10] Adam: I had a funny moment with Target the other day. I was doing something that I have to do about once or twice a week which is cleaning up my backyard and picking up my dog’s poop.
[00:14:20] Hallie: Sure.
[00:14:21] Adam: I only use Target bags.
[00:14:23] Hallie: [laughs]
[00:14:24] Adam: They almost never have holes in them and they’re thick.
[00:14:26] Hallie: No. They are good for trash, yes.
[00:14:28] Adam: They’re great. They’re great for trash.
[00:14:30] Hallie: [laughs]
[00:14:31] Adam: That’s the thought I had was like, these bags are so good for dog shit. I thought, “Is this good or bad for the brand? These are the only bags I’ll use.” I almost will say to my wife, “Hey, next time you’re thinking about going someplace to pick something up, let’s make sure we go to Target because I need some bags.”
[00:14:49] Hallie: I need to pick up more shit.
[00:14:50] Adam: Yes, exactly. It never stops.
[00:14:51] Hallie: Man, that’s not good. That’s not good.
[00:14:53] Adam: It’s not. It’s not good.
[00:14:55] Hallie: No.
[00:14:56] Adam: I think that’s true that it becomes, I’ve heard people say that too about H&M that they’ll get a compliment and they’ll say, “Well, it’s just H&M. It’s just Zara. It’s just throw-away.”
[00:15:05] Hallie: Yes. I think what they’re trying to do is appeal to people who are trying to still wear something distinctive. It goes back to that whole homogenous thing. They want to appeal to people who are trying to wear something that looks like it’s not from Target.
[00:15:29] Adam: Right. That is a weird conundrum to be in.
[00:15:32] Hallie: Yes. No, that’s not good.
[00:15:37] Adam: That’s the place that Walmart never finds itself in. Walmart is totally confident with being who it is. Sometimes that’s a terrible thing but when you walk through the clothes department which I’m sure you do, I have. You walk through that and you go, “Yes, this is all Walmart stuff. Nothing here is unexpected or trying to do something different than what I thought it was going to be.” It’s like value, looks durable-ish-
[00:16:02] Hallie: Ish, yes.
[00:16:02] Adam: -and that’s not trying to be overly stylish. It’s supposed to be, you’re not going to look crazy wearing it, or some of it, Duck Dynasty line maybe.
[00:16:09] Hallie: [laughs] Right.
[00:16:12] Adam: It’s not designed to compete with fast fashion so it doesn’t do that.
[00:16:16] Hallie: No. Walmart versus Target is a weird argument, too. I almost feel like they don’t cross over at all anymore.
[00:16:24] Adam: Yes. They both carved out little spaces. Who is then the real rival for Target?
[00:16:31] Hallie: I think it’s just mall retail. I think it’s department stores which, they aren’t giving competition to anybody now. [laughs] I guess Target’s in a good place but it’s a weird–
[00:16:43] Adam: There was Coles for a little while too. I thought Coles had gotten some celebrity lines that they had brought in that were, not designers but just celebrities, just slap some celebrity names on those things from East Asia and just—[crosstalk]
[00:16:59] Hallie: Someone from the Hills.
[00:17:00] Adam: Yes, exactly.
[00:17:02] Hallie: Yes. I don’t know. It’s just such a unique little space of the market, not a little space. I know there are a lot of people that buy clothes on Amazon. I’m not really one of them because the experience is kind of horrible for buying clothes.
[00:17:21] Adam: I agree. It’s a lot of sending back stuff.
[00:17:24] Hallie: Yes. I also never really go to Target to look for clothes either but I buy clothes from Target.
[00:17:31] Adam: It’s more though, serendipity. It’s more just walking through from one place to another that’s on your list and then you go, “What’s that? That’s cute. That’s nice. I need that.”
[00:17:43] Hallie: Yes. I was talking to my mom about this this morning, actually. I was saying, “Well, what’s different about your,” because I always consult my mom before I do a podcast like most people should.
[00:17:52] Adam: Of course, we all do. Yes. My mom’s listening right now.
[00:17:54] Hallie: [laughs] I said, “Well, what’s different about your Walmart trips versus your Target trips?” She’s like, “Well, at Walmart, I go and I buy dog food because it’s cheap but at Target, I’ll spend an hour there just walking around, perusing everything.”
[00:18:09] Adam: That’s interesting and probably true.
[00:18:11] Hallie: Yes. I totally identify with that. They’re really good at that. I think people do go in and out and do the whole Target run thing that they’re using in their campaigns now. They’re also really good at staying on-trend which is not something that Walmart does.
[00:18:28] Adam: That Target run TV campaign and print campaign that they’re running right now, and I assume digital though, I haven’t seen that, I think maybe I heard it on Spotify, how does that line up with what they’re doing with these brands? I guess that Target run thing is about expanded convenience. It’s not saying come in and just get one thing. It’s saying, “Hey, I’m going to go pick up lightbulbs, what other random thing do you need because I can get it there?” That’s the idea.
[00:18:58] Hallie: Yes.
[00:18:58] Adam: How do you think that lines up with these brands that they’re trying to introduce and cutting back on Merona and Mossimo? It’s obviously all a related strategy. Where is it going?
[00:19:11] Hallie: Yes. I don’t know. I have a hard time lining both of those tracks up in my head. On the one hand, it’s like, yes, it’s convenient. It’s easy. You can go get necessities and leave and be done. Then, they’re going this route of, we’re a boutique. We’re a niche. We’re a destination and we’re also moving away from discounts and promotions, which I think makes, if I dealt with this for a Prestige brand, it ruins your brand. You can never move away from it. You just can’t. It’s Target, so you expect those things. This is where I get, I’m not answering your question now, but this is where–
[00:19:58] Adam: That’s okay. We’ll come back.
[00:20:00] Hallie: Yes. This is where I start to feel uneasy is when they’re starting to not discount, to not do promotions and to sell things at a higher price point to a consumer that’s there for the value of it. I don’t know if that’s a good long-term strategy.
[00:20:18] Adam: Well, now I see a strategy which I hadn’t thought about before. If it’s all about convenience and it’s about a modified version of convenience. I already have CVS or Walgreens on every corner especially in Scottsdale, greater Phoenix area, right, we have that. Then, if it’s the place where I can go to get all these expanded things and it’s somewhat pleasurable for their audience, there’s a certain audience that just has a dread about going into Walmart. I’ve mastered how to walk through Walmart quickly and efficiently even though it’s sprawling or Costco. I can get in and out of there without filling a cart with 12-pound bins of Red Vines.
[00:20:57] Hallie: Congrats.
[00:20:58] Adam: Yes. It’s amazing. It’s quite an achievement. I’m going to put it on my tombstone. Maybe it’s about that. It’s about, “Hey, you can come in here. It’s not a horrible place.” In most of the stores you can get some grocery, you can get some clothes if you need them. You can get a gift, you can get a notebook. The kind of crap that you need all the time. I’m assuming that’s what they’re doing.
[00:21:21] Hallie: Yes. You can get your Starbucks, too, while you’re here and then not hate yourself and not feel too embarrassed. I think that’s the thing–
[00:21:29] Adam: I’ve eaten at the Walmart Burger King so I have no — yes, I have no shame.
[00:21:34] Hallie: [laughs] I get that Target hotdog every time I walk in.
[00:21:37] Adam: Yes. Oh my God, the Costco pizza, are you kidding me?
[00:21:38] Hallie: [laughs]
[00:21:39] Adam: It’s the best.
[00:21:41] Hallie: No. Yes, I think it’s like upscale big box, I guess. Now, it’s where they’re trying to move.
[00:21:49] Adam: Yes. I guess that’s where they’re going. When I was growing up in beautiful Long Island, New York, there were places that were — there was a place called Shopper’s Village. Do you know this place?
[00:22:00] Hallie: I don’t think I’ve seen Shopper’s Village.
[00:22:01] Adam: Okay. I know but you grew up and you spent some time in Long Island.
[00:22:04] Hallie: I’ve spent many a good day.
[00:22:07] Adam: Your share. It’s been closed for a while, though and I’m much older than you. It was a place where it was shaped like a mall. It was a big, brick building and you would go in but it was all little stalls like a bizarre. There’d be a record guys.
[00:22:21] Hallie: Like a flea market?
[00:22:23] Adam: Kind of like a flea market but it was a permanent flea market. Some of them had stores like a mall but some of them were just booths and that’s what Target is. Like Shopper’s Village. There’s clothes over here but then there’s also electronics. Then, “Oh, yes, I’m hungry. I’m going to go get a coffee and a scone over at Starbucks.” Everything’s in there. It’s a self-contained mall which is more important than ever as malls just continue to implode and retail just shits the bed.
[00:22:50] Hallie: Yes. They’re doing something right, obviously. Even though sales are declining I think, or have declined, I’m not sure what the — I think they’re actually supposed to come out with an earnings report today. They’re doing something right. Even with the Amazon being who Amazon is, I still go to Target as a destination for a reason. They’re remaining competitive. Food, I think, has always been a struggle for them. That is still a hard hurdle to get over, I think.
[00:23:26] Adam: You mean, food, grocery food?
[00:23:28] Hallie: Yes. The whole grocery idea. I think that’s a weird hurdle to get over. It’s like, “I’m going to buy ground beef but then I’m also going to buy a sweater.” That’s a weird–
[00:23:37] Adam: It’s a weird habit. You’re not just going to get people out of that habit of how they buy groceries especially produce and meat.
[00:23:44] Hallie: Yes. What?
[00:23:48] Adam: If you think about the Target run, I guess, that’s what they’re doing is make a direct — that’s taken Amazon head-on. Because I go to Amazon with a search term in my mind. I want a book, I want a phone case, I want whatever it is, these microphone arms, got them on Amazon. Great deal. Whatever it is, I’d go there with a purpose and every now and then they’ll get me with the — people also bought these pair of Adidas and I was like, “Well, all right. That makes sense, a book and Adidas shirt.” At Target they’re saying, “No, no, no. You come here open-minded and you can discover stuff you don’t even know you wanted.” That’s their advantage. Now, I don’t know what’s going to happen to that when do have same-day delivery. When both stores offer same-day delivery which is going to happen.
[00:24:33] Hallie: Yes.
[00:24:33] Adam: Then, from Amazon I can get the brand I want same day versus Target, I can get brands that they invented in a lab.
[00:24:39] Hallie: Yes, yes.
[00:24:41] Adam: That’s not a good positioning.
[00:24:43] Hallie: No. That’s tough. Yes.
[00:24:46] Adam: I know Merona’s going away which or what’s the brand, Cat & Jack. Would people go order Cat & Jack to be delivered or would they order something same day? That means, “Okay, it’s either an emergency or I really want it.” Would you order a luxury premium brand from Amazon or just that like, “Send me all the cheap stuff you have because I’m on vacation and my kid just destroyed his clothes”?
[00:25:10] Hallie: Yes. I feel like the whole same-day delivery thing, it’s exactly what you said. It’s whatever I know I need but I have to go into the store and browse if I’m going to pick the other stuff. Actually, they’re doing a lot in terms of in-store displays to try and boost that as well. The whole idea of cross-selling, like this hat with these shorts or doing those displays so you see multiple products merchandise together which they didn’t use to do. It used to be just you go and you see everything on a hanger and that’s it. Now they’re actually–
[00:25:48] Adam: The Gap was famous for that. Merchandising entire looks that people would go in and just buy the entire mannequin.
[00:25:54] Hallie: Yes. I love buying mannequins.
[00:25:58] Adam: I actually just buy the mannequin.
[00:25:59] Hallie: [laughs] That’s right. It’s good for the HOV lane.
[00:26:02] Adam: Absolutely. Yes.
[00:26:06] Hallie: Yes. Just the whole in-store Target experience is — I used to say — I went away to college in Indiana which is a horrible place. Just kidding. Actually, I loved it. It was very different than growing up in Arizona. If I was really feeling homesick, I could go to a Target.
[00:26:25] Adam: Is that where you went?
[00:26:26] Hallie: I would go to Target–
[00:26:27] Adam: What does that say about Arizona?
[00:26:29] Hallie: Well, yes. That’s true. [laughs] Really, really edgy.
[00:26:33] Adam: Because it’s dead-on. It’s right. It’s correct.
[00:26:35] Hallie: It is exactly. I could be in West Lafayette, Indiana or I could be in Gilbert, Arizona and I’ll know the difference as long as I’m inside a Target and it’s all familiar. There’s that weird homecoming feeling which they’ve done a really good job with. You don’t get that in Walmart. Walmart, you still feel uncomfortable, no matter where you are.
[00:26:52] Adam: You still feel homesick when you’re inside?
[00:26:54] Hallie: [laughs] Yes.
[00:26:55] Adam: You made a good point. Target brand is a very strong brand. It’s very well-known. I understand the core positioning of it. Well, maybe I don’t as well as I thought I did. They have their work cut out for them introducing these 12 brands and they’re probably in quite a panic to do it before people start ordering everything on their phone by voice command. Because if I don’t even know the name of these brands, and so far I don’t, I can’t ask Alexa to have Target send it to me instead of Amazon, by name, you know what I mean?
If I say, “Alexa, send paper towels,” she’s going to send whatever is in my past purchases which is probably Bounty or a name that you’ve heard of.
[00:27:41] Hallie: Yes. The brand name thing is going to be a hurdle for them, I think. Because you never say, “This is X brand.” I never say, “Oh, it’s Merona,” I say, “Oh, I got it at Target.”
[00:27:51] Adam: It’s Target brand, right?
[00:27:53] Hallie: Yes. I didn’t even think about that. That’s definitely a hurdle. It’s giving these brands a name.
[00:27:57] Adam: I have a pair of jeans from Target. I don’t know what the brand is. I cannot, for the life of me, guess what the brand is. I’ll probably go home and look. I actually don’t know.
[00:28:06] Hallie: Yes.
[00:28:09] Adam: I think of them as Target.
[00:28:08] Hallie: I don’t know how you would build equity for an in-house brand.
[00:28:15] Adam: The same way you build equity for a general market brand. The question is, are they willing to make the investment that it takes to do that? I think in the past they had such a loyal group of shoppers that they could do it in store but as trips are getting shorter and shorter and less frequent as people figure out other ways to get those essentials, I think it’s going to be harder for them to get to the awareness of Merona and Mossimo.
Even if I wouldn’t have put those at a high affinity, I would put them at a higher awareness but not — I don’t need it, obviously, but aided awareness, I think people knew what they were. That what you think?
[00:28:53] Hallie: Yes.
[00:28:53] Adam: Were those male and female brands or just male?
[00:28:57] Hallie: No, they were female, too.
[00:28:59] Adam: Okay.
[00:28:59] Hallie: They were female, too. I was reading something that was saying that Target did some research to show that man actually just didn’t want to buy clothes at Target at all. Women will buy clothes at Target. Then, we’ll buy underwear at Target but they won’t. This is what they researched, they did not see that as a destination to buy clothes. They actually do have a men’s brand that they’re coming out with. That’s much more H&M-looking or–
[00:29:26] Adam: Just more and more appealing.
[00:29:28] Hallie: More bespoke.
[00:29:29] Adam: More artisanal.
[00:29:30] Hallie: Much more artisanal.
[00:29:31] Adam: Well, that’s the death knell for any brand. That was the same thing that happened to the Gap and probably Banana Republic, when those brands started fading, was males started saying, “Well, it’s good for my basics but I’m not going to buy anything else there.” That’s the end of that brand when that happens.
American Apparel was great for t-shirts and then it became something else. Then everybody started saying, “Well, the t-shirts are still good.” As soon as you hear that, sell your stock and run like hell because that means nobody’s going to come in for your high margin items. Nobody’s going to buy those things. Then probably they’re going to just stop coming in in general. If they know the size of a T-shirt, it’s just going to be something they order online and have it sent to their house or their underwear at Target, which I don’t know what the offering was like. If people just buy in frugal in three packs or whatever.
[00:30:18] Hallie: Yes. I wonder how much they, as a shopper and how much they’re thinking about this. The thought process of going to Target, buying a Target brand and hoping it looks like you didn’t buy it at Target. Hoping that you’re almost fooling people. If you’re not buying basic stuffs. If you’re buying jeans, and just hoping that it passes something that you put a little bit more [crosstalk].
[00:30:49] Adam: Yes. That’s probably what they’re trying to do. But that’s bad for Target too. They need to create brands that have–
[00:30:56] Hallie: Actual value?
[00:30:57] Adam: Yes. They want to be camouflaged. Because they want people to see it as appealing and not doing anything to make them look off. But it has to stand out enough if they want to build those as real brands that people would know by name.
[00:31:12] Hallie: Actual credibility. Yes.
[00:31:13] Adam: Right?
[00:31:13] Hallie: Yes.
[00:31:15] Adam: That’s the balancing act they’re going to have to figure out.
[00:31:16] Hallie: Yes.
[00:31:17] Adam: As you said about the skin care aisle, I don’t know if they’ve cracked that code yet. I think people do go in there and just they — It splits right down in the middle of people that are like, “No. I think I’ll just stick with my Ivory liquid soap here, or my Up & Up brand for a dollar, or three bucks, or whatever it is” versus this premium brand that has flax seed oil or whatever the hell is in it.
[00:31:42] Hallie: That you know nothing about as a consumer. The only thing you can see is whatever in store like signage they have. I’ve never heard of any of the brands except for that one, Pacifica. But you see, it’s more expensive. Maybe that’s–
[00:31:57] Adam: Yes. That’s interesting. I wonder how often people pull up phones and actually research. I bet in that aisle, not that often.
[00:32:03] Hallie: Yes.
[00:32:04] Adam: If there wasn’t, now, they were going to do it, be there electronics probably. Where you’d actually say, “Well, what’s this brand?”
[00:32:10] Hallie: Yes. “Why am I paying twice as much for this?” The packaging’s cool.
[00:32:14] Adam: That’s the question. That’s the question behind all of branding. “Why am I paying twice as much for this?” Right?
[00:32:20] Hallie: Yes. Therein lies the problem.
[00:32:22] Adam: Can you figure that out and get back to me by tomorrow at 9:00 AM?
[00:32:26] Hallie: I’m right on top of that.
[00:32:28] Adam: I appreciate it. I appreciate that, and I appreciate any reference to, “don’t tell mom the babysitter’s dead. Let me know.” It’s a classic.
[00:32:34] Hallie: A classic.
[00:32:35] Adam: It’s a classic. All right. Well, I think we’ve beaten a lot of this topic. I want to thank my wonderful guest, Hallie Wright.
[00:32:43] Hallie: Thank you.
[00:32:44] Adam: That’s you.
[00:32:45] Hallie: Can I also say thank you?
[00:32:46] Adam: Yes. I think you too.
[00:32:47] Hallie: Thank you for having me, Adam.
[00:32:48] Adam: [laughs] It’s been a pleasure. I get to talk to Hallie all the time. But you probably don’t. If you’re listening, how can people get a hold of you? Are you on Twitter?
[00:32:58] Hallie: I am on Twitter. I’m @hallie495 which is also my AIM screen name from 4th grade.
[00:33:05] Adam: Nice.
[00:33:06] Hallie: Kept that. Kept that alive.
[00:33:08] Adam: Do you still have an AIM account?
[00:33:10] Hallie: Yes. I still have my AIM message app from 4th grade actually.
[00:33:14] Adam: Excellent. Awesome. If you want to get a hold of me, I’m @apierno. You can also reach out to @instil_strategy and ask any questions about what we’re doing with Instil and the Instil Strategy Training. Thank you, guys, for listening. We will be back with a new episode soon.