All is fair in the game of ecommerce—even working with a potential competitor.
It’s why an increasing number of direct-to-consumer brands are using Target to test a retail strategy—and why the retailer is open to it. As both try to compete with Amazon’s ever-increasing dominance, it’s one way these companies get to fight the ecommerce giant. Direct-to-consumer companies like Quip, Harry’s and Native have joined Target to see if retail works for them.
“Everyone is out for themselves,” said Bruce Winder, a retail analyst. “Both sides will use each other a bit in the short run. Target gets a new credible brand to sell and the brands get to learn whether they can appeal to a different market [and] they get incremental revenue.”
The latest two brands to join the Target family include Quip, an electric toothbrush company and Native, a natural deodorant upstart. Native joined in September 2018 and according to Moiz Ali, Native CEO, the coconut and vanilla scented deodorant is now the No. 1 deodorant item sold at Target.
Ali said the partnership works because the two brands share the “same ethos and customer base,” and Target lets Native keep a lot of its branding—such as a special end-cap installation where Native is written vertically versus horizontally. (An end-cap display is when an aisle showcases a single product or brand.) Ali said the two companies share data and ideas with each other, but wouldn’t share more nor any sales data, other than revealing that Target buys Native products at wholesale.
According to a Gartner L2’s Big Box U.S. 2018 report, Target experienced mores sales growth than Walmart in 2018. But Bill Duffy, a senior principal at Gartner, said while Target posted 5.1 percent growth in its Q3 earnings report and Walmart only posted 3.4 percent growth, Walmart’s ecommerce business is still larger than Target’s. Target does have one thing Walmart doesn’t: 3.4 million followers on Instagram compared to Walmart’s 1.5 million—which makes a difference, at least for Quip.