Dive Brief:
- Target officially launched Gigglescape, a new owned toy brand, on Tuesday. The current assortment is $20 and under, with most plush toys priced at $10 or less and books at $5, the retailer said in an announcement.
- The retailer began offering stuffed animals through the line a few weeks ago, Jill Sando, the retailer’s chief merchandising officer of apparel, accessories, home and hardlines, said during a Tuesday earnings call. The assortment currently includes a unicorn with a rainbow mane and tail, a giraffe, a smiling shark and traditional teddy bears. In the coming weeks, Target plans to begin offering additional toys, games and puzzles.
- “Kids-related categories are huge for Target and toys plays a key role in keeping Target relevant with families,” Sando said Tuesday, according to a Seeking Alpha transcript.
Dive Insight:
The company said the toy brand was created with materials and design elements intended to stand up to whatever kids can dish out. Gigglescape packaging was also designed with sustainability in mind, with more than 90% of the product packaging plastic-free.
“National brands like Lego and exclusive brands like Our Generation have made Target one of the biggest toy retailers in America,” Sando said, according to a call transcript. “And the addition of Gigglescape gives consumers one more only-at-Target reason to shop toys.”
As the first owned brand designed specifically for Generation Alpha, Sando said Gigglescape fills white space in Target’s private label assortment and positions the retailer for growth in a high-margin category. Additionally, having an owned brand presence in toys strengthens Target’s ability to stay relevant to consumers at every stage of their lives, Christina Hennington, the company’s chief growth officer, said during the call.
Target’s introduction of Gigglescape dropped on the same day the retailer reported its fourth quarter and full-year earnings. The company has recently launched new private labels, including Dealworthy, and announced relaunches within its existing portfolio of about 50 owned brands, like its Up&Up label, which offers home essentials.
“We believe recent merchandising initiatives and new owned brand enhancements/launches (e.g. Figmint, Dealworthy, Gigglescape) should improve [Target’s] value perception with customers and support traffic and share gains going forward,” Robert Ohmes, a Bank of America research analyst, said in a Wednesday note.
Target on Tuesday also announced that it plans to revamp its popular Target Circle loyalty program by offering a delivery-focused paid membership option, Target Circle 360, that puts the retailer on par with rivals Amazon and Walmart.
“While increasing digital penetration could pressure gross margin, this could be offset by a corresponding increase in customer engagement,” Ohmes said, who noted that Target Circle members spent five times more than nonmembers last year.
