Target’s Collaboration Machine Sputters

SMITH BRAIN TRUST – When Target opened its doors on May 18, it was with a small wave of excitement.

Its newest designer collaboration – the seashore-themed Vineyard Vines for Target – was there on the shelves, and the retailer was hoping that once again, it would land on a partnership that would drive traffic to the stores and online, and generate some consumer buzz. But what if it didn’t?

Designer collaborations have been a key strategy in Target’s playbook for decades – partnering with a hot or up-and-coming designer to sell a limited-edition line that attracts media attention and draws in fashion-conscious customers, sparking demand that matches or even outstrips supply, creating an aura of exclusivity.

“It’s kind of an old-fashioned strategy at this point,” says Yajin Wang, assistant professor of marketing at the University of Maryland’s Robert H. Smith School of Business.

Vineyard Vines is the most recent partnership, following pairings with Lilly Pulitzer, Marimekko, Missoni, Jean Paul Gaultier, Alexander McQueen and Zac Posen, among others.

The Vineyard Vines for Target line made a very quiet splash. Wang – who follows influencer culture, designers and retail closely – admits she didn’t even know it had happened until days later.

Select items sold out within minutes online and in stores. Within hours, some 7,500 products were listed on eBay, often at a 200% markup. Much of the “buzz” the line generated wasn’t happy buzz – it was people complaining on social media that the stores had been thinly stocked. Not the kind of chatter Target was going for.

Target says the company pioneered mass retail/design collaboration concept in 1999, when it partnered with noted architect Michael Graves. And while that might not be entirely accurate -- JCPenney was partnering with fashion house Halston way back in the early 1980s -- there’s no doubt that Target now is known for its high-profile, high-fashion collaborations, and for helping upstart designers like Proenza Schouler gain wider brand recognition.

It doesn’t always work. At times, collaborations have even backfired, like when the much-hyped Neiman Marcus for Target line bombed, spectacularly, during the 2012 holiday season. People just didn’t like the merchandise and Target was forced to slash prices, taking a loss.

“Historically, Target has done a reasonably good job with their designer collaborations, in terms of bringing a lot of new traffic and media attention, and generating some buzz,” says Wang. “And they do break Target out of its usual ‘everyday supermarket’ kind of identity.”

But, she adds, the buzz seems to become quieter and quieter with each limited collection. “I hadn’t even heard about this last collection with Vineyard Vines,” she says. “And I can’t remember what the last one was either.”

For now, Target’s collaborations offer mostly a short-term benefit, she says. And maybe that’s OK. From a longer term perspective, the retailer is getting some other things right.

A kind of prime: Target acquired delivery startup Shipt last year and now is offering free same-day delivery to members of its $99 shipping club. Same. Day.

App-ubiquity: Target is growing its presence on consumers’ phones, offering curbside pickup and other privileges only to its app holders.

DTC, in house: Target has 1,850 stores across the U.S. And now it’s using those brick-and-mortars to sell those super-popular direct-to-consumer brands you thought you could buy only online. Harry’s razors. Casper mattresses. Quip toothbrushes.

With its app perks, its Shipt service and its DTC partnerships, Wang says, Target is creating a more consistent brand image. And that makes sense.

“Do you want to collaborate with brands that are known for bold designs, or do you want to associate yourself with brands signal really high quality but a low profile. What would go better with Target in the long run?”