Target's Universal Thread launch is just the latest in a series of new exclusive labels in apparel and home goods. Last year the mass merchant announced plans to develop 12 new labels over the following 18 months, using the same research and design approach applied to developing the Pillowfort and Cat & Jack kids lines, both launched in 2016.
Those lines are performing well: By October of last year, Cat & Jack had surpassed the $2 billion mark to be one of Target’s largest brands ever, the company reported in 2017 when it unveiled a series of "adaptive apparel" products made specially for kids and toddlers living with disabilities.
Judging by these efforts to double-down on its "cheap chic" merchandise differentiation, Target seems unwilling to cede much to Amazon or anyone else when it comes to home decor, furniture and apparel. Executives last year said the company's private labels account for about $26 billion in sales.
Merchandise differentiation has been a key Target strategy since it lost a bruising price war with Walmart in the 1980s. "I think their goal is to build their in-house brands more," Maya Mikhailov, chief marketing officer and co-founder of GPShopper, told Retail Dive earlier. "Target was always known for design, earning the moniker 'Tar-zhay.' Their new streak appears to be focused on re-energizing that. It seems to be a natural extension of what their original brand promise was."
Sales from such merchandise have bolstered margins amid rising competition in consumables and grocery, although, notably, the new line will have both enhanced quality and lower prices, according to Mark Tritton, Target's executive vice president and chief merchandising officer, who also promised more to come. "Guests can expect to see great ideas brought to life in their home, their wardrobe and more that provide exceptional value and innovative design," he said. "We’re improving our existing assortment or bringing newness. We’ve got plenty more amazing brands up our sleeves to make Target the preferred destination for guests again and again."