Dive Brief:

• Target is rolling out a new children’s and babies clothes line called Cat & Jack, Bloomberg reports, noting how much the resuscitation of the retailer's former “cheap chic” cool depends on a revamp of its kids apparel and home goods lines.

• Target developed Cat & Jack (which replaces its mainstay Cherokee and Circo kids labels) by consulting feedback and opinions from a range of children.

• Kids’ apparel is a relatively stable $30 billion market in the U.S. that grew 1.8% in 2015. Children’s Place, Gap, Gymboree, H&M, Kohl’s, Wal-Mart, and Zara are among the major players, along with numerous boutiques. That makes the segment a battle for market share. Target is second to Wal-Mart among mass merchants in children’s apparel sales, according to market research firm NPD Group, Bloomberg says.

Dive Insight:

According to Bloomberg's in-depth look, Target CEO Brian Cornell has been working to inject more opportunities for creativity and risk-taking at the big-box retailer. Much of the work being done to revamp children’s clothing and other lines involves company veterans eager to take on the task.

The approach to differentiation in merchandising is not new for Target, which decades ago innovated the idea of bringing upscale design philosophies to mass-market goods. But the retailer let go some of its focus on that, leaving it to compete on price. Target should have known better—its cheap chic approach was born of the realization that it couldn’t take on Wal-Mart’s “always low prices” juggernaut—but economic frailty and wage stagnation perhaps made the company cautious.

Target continues to face disappointing sales, through efforts like its gender-neutral Pillowfort line for kids and improvements to stores are paying off, so it remains to be seen whether the pivot back to differentiating its merchandise will be enough. (Gender neutrality is another important differentiation for the retailer, which has responded to customer complaints about segregation of boys and girls toys and other merchandise by blurring some lines, though it has also taken some flak for that.) 

The process takes more time and resources, although, as the Bloomberg piece notes, Target is playing hardball with suppliers to make its better quality, better designed goods at the same bargain prices as its previous lines. 

Certainly, Target has little choice but to try, considering that price alone is not a promising playing field. “Price has emerged as a bigger-than-life issue that is enormously complicated," Columbia University retail studies professor Mark Cohen, who worked for Target’s parent company decades ago as it first shifted to designer-based differentiation, told Retail Dive. "How do you put an assortment into a 200,000-square foot plain vanilla box that is inviting, engaging and happy, and makes you want to come back? You have to do it with merchandise and with merchandise presentation.”