Following in the footsteps of Amazon and Walmart, Target has rolled out a third-party marketplace called Target+ — but it’s taking a very different approach than its rivals. The Minneapolis-based retailer is courting brands both big and small on an invitation-only basis to sell their wares as part of a carefully curated assortment on its website. The individual sellers will be responsible for shipping and other costs.
The unique strategy is likely driven by Target’s intent to keep merchandise quality high and avoid the many challenges that Amazon and Walmart have faced in policing their own third-party merchants, who only need to fill out an application to get approval to sell. Both competitors have grappled with such issues as counterfeit goods and controversial or offensive merchandise winding up on their sites. Walmart, for example, came under fire last year for selling products that promoted lynching journalists and impeaching President Donald Trump.
Based on customer data and popular searches on its site, Target’s new third-party offering — which is seamlessly integrated into its site — focuses on such high-demand categories as sporting goods, toys, home décor and electronics. In the footwear space, Mizuno has already signed on to sell its performance running shoes.
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“Guests look to Target for great products. With Target+, we aim to give them easy access to even more great products by partnering with best-in-class specialty and national brands that will help guests save and get more done in just one stop,” said Rick Gomez, Target’s chief marketing officer and digital officer, adding that shoppers can still take advantages of Target perks including free shipping, easy in-store returns and 5 percent off using a Target credit card.
The launch of Target+ is yet another move by the retailer to propel its online sales, which surged 29 percent during the holiday season. By passing its shipping fees on to its third-party partners and reducing its steep digital fulfillment costs, the retailer is positioning itself for improved profit margins. The company will report its fourth-quarter and full-year earnings on March 5.
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