Target has announced a new partnership with Shopify, seeking to discover and feature hot products on its third-party marketplace, Target Plus.
This recent collaboration announced on June 24, seeks to enhance Target's online offerings and drive growth in its e-commerce sector, which has faced challenges in recent quarters.
Target Looks to Expand Target Plus with Shopify
Target Plus is an invite-only marketplace that currently features over 1,200 sellers, including popular brands like Crocs, Ruggable, and Timberland.
The platform offers more than 2 million products, spanning categories such as apparel, sporting goods, and home decor. This curated approach allows Target to maintain a high standard of quality and trust for its customers.
Cara Sylvester, Target's Chief Guest Experience Officer, emphasized the value of this new partnership, stating that Shopify will help Target quickly identify and add popular items to its online store.
Sylvester noted, "Target Plus invites consumers to explore a curated collection of products from vendors we trust, so they can shop our assortment with confidence."
Meanwhile, here is what Harley Finkelstein, president of Shopify, has to say about the partnership: "Partnering with Target helps high-growth brands like Caden Lane and True Classic reach millions of new loyal customers and take their business to the next level."
NEW YORK, NEW YORK - MARCH 05: A Target store stands in Manhattan on March 05, 2024 in New York City. As it showed progress in raising profits, the Minneapolis-based retailer’s shares jumped nearly 12% in afternoon trading despite a drop in sales. Photo by Spencer Platt/Getty Images
What This Means for Both Companies
This collaboration is a win-win for both Target and Shopify. For Target, the addition of Shopify's merchants, which often include smaller and up-and-coming brands, could help the retailer attract a broader audience and enhance its digital marketplace's appeal.
Notably, Target plans to integrate some of these popular items into its physical stores, further bridging the gap between online and offline shopping experiences.
Shopify, on the other hand, gains a significant boost by partnering with a major retailer like Target. With over 2 million daily users, Shopify provides the infrastructure for merchants to run their online businesses.
Challenging E-commerce Landscape
Target's sales dropped 4% in the first quarter, marking the fourth quarter in a row with lower numbers.
To get customers back, Target cut prices on almost 5,000 items, hoping to appeal to shoppers watching their wallets during this time of rising prices. Online sales have also been slow, with just a 1.4% increase in the first quarter - the first growth they have seen in over a year.
For the entire year, Target expects sales to be anywhere from flat to up 2%, with profits between $8.60 and $9.60 per share. Despite these hurdles, Target remains hopeful, pointing to its growing third-party marketplace, Target Plus.
Third-party marketplaces are gaining popularity among retailers because they're profitable and efficient. Big names like Amazon, Walmart, and eBay already have huge platforms with millions of sellers offering a wide range of products.
