Dive Brief:

• Target is pulling shoppers away from malls as it begins to open dedicated Apple shops in 17 of its locations starting this month, according to a Thursday press release. Target plans to expand the Apple shop-in-shops by the end of the fall.
• Apple products are already sold in Target stores, but the dedicated shops would double the tech giant's footprint in select stores and expand its offerings. The collaboration also expands the product assortment online.
• Apple shop-in-shops at Target will centralize products, accessories and demonstrations in one place and the dedicated space will include new lighting fixtures and displays for Apple's products. Target tech consultants will be receiving specialized training from Apple, per the release.

Dive Insight:

Target has leveraged its 15-year long partnership with Apple to open the shop-in-shops, and it's not the first time the retailer has leveraged the strategy to go deeper into a category.

"Apple products are popular with Target's guests, and this new, dedicated shopping experience offers enhanced service and expanded offerings, building on our strength as a go-to destination for electronics," Christina Hennington, executive vice president and chief growth officer at Target, said in the release. 

Beauty retailer Ulta and Target forged a similar deal last November. The beauty specialty player will open shops in over 100 Target stores in the second half of 2021, with plans to establish even more in the future. Similarly, 25 Disney stores were plotted for Target locations in 2019 and helped the retailer expand its toy profile.  

Previous initiatives from Target indicate that the retailer may be using exclusive brand partnerships and product lines as a strategy to drive sales and gain market share. These partnerships and initiatives continued even during the pandemic, which helped Target thrive during the economic downturn.

During its third quarter, Target posted 20.7% comparable sales growth thanks to increases in in-store traffic (up 4.5%) and ticket size (up 15.6%).

Target's rise during a time where many in the industry are struggling highlights that the retailer is an advantageous partner. Customers drawn to its fulfillment options and discounts via its loyalty program may prefer to purchase from Target over other stores that don't provide these perks.  

For instance, Target will give RedCard holders a 5% discount on their Apple purchases in addition to convenient options like order pickup and same-day delivery, the release said.