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How Target Keeps Its 'Tar-zhay' Luster
By: Fortune
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At a hip event space in downtown Manhattan Target (tgt, +4.95%) in early August, Chief Merchant Mark Tritton was marveling at the merchandise from its three newly launched brands. From electronics to apparel, designed and manufactured by the retailer, the items ran a wide spectrum of categories aimed at a whole new cohort of potential customers.

They were: Heydey, its first proprietary electronics brand; Wild Fable, a low-cost clothing and accessories brand for teenage and young adult women; and Original Use, a male-focused brand with an urban feel.

Tritton, who came to Target from Nordstrom (jwn, -0.02%) two years ago with a mandate from CEO Brian Cornell to overhaul Target’s private brand business, a key ingredient in what sets it apart from Walmart and Amazon, has now overseen the genesis and launch of 12 Target brands, with more to come, an unprecedented pace for that chain.

“It’s core to who we are,” Tritton tells Fortune at Target’s Design Center in Manhattan’s Chelsea district. The company had let a number of its brands grow tired in recent years and getting the part of the business that makes Target ‘Tar-zhay’ back on track was key.

Luckily for Target, it’s always been quite good at creating a line-up of brands that are instantly recognizable by shoppers, even those who don’t frequent Target.

In just one year after launch in 2016, its kids’ apparel line Cat & Jack was a mammoth $2 billion brand, roughly as big as Lululemon Athletica. It has enjoyed similar success in home goods like Pillowfort, men’s clothes such as Goodfellow & Co (which has an unmistakable J.Crew feeling) and Opalhouse, an eclectic brand of home decor items.

“They’ve always been very good at understanding trend and being able to tailor the trend to their broad audience,” says Wendy Liebmann, CEO of WSL Strategic Retail.

That has always been Target’s secret sauce: borrowing the best elements of department stores and applying it to a discount big box. Having unique products that have a strong enough identity for shoppers is essential to keep Target on the comeback trail: the retailer has reported a number of quarter of sales increases, and more importantly, store visit growth is picking up, thanks in large part to its store brands. Those recognizable names help a shopper who can buy Tide detergent at any number of store chains to choose Target because they can get something there they can’t elsewhere.

Now there is additional urgency to succeeding here with Amazon.com (amzn, +1.03%) going all in with its own brands and Walmart entering the fray with purpose. Research by Coresite Research in December found that Amazon Fashion has grown to the point it now tied with Target as the second largest U.S. apparel seller with, 37.3% of Americans having shopped for clothes at there in the last month, just a few percentage points behind Walmart. (There was no data for home goods, another core part of Target’s private brand strategy.)


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This article originally appeared on Fortune.com. A link to the original posting can be found at the end of the article.
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