Target touts Victoria Beckham pre-launch events for REDcard holders

Dive Brief:

Target is rewarding some of its REDcard loyalty program customers with the opportunity to pre-shop the retailer’s much-anticipated collection from fashion superstar Victoria Beckham, the Minneapolis Star Tribune reports.
While the Beckham collection debuts in all stores and online April 9, some 500 REDcard holders — who also enjoy free shipping on all online orders and 5% off purchases — received invitations to attend pre-launch events April 8 at five Target stores nationwide.
Target is also exploring enhancements to its Cartwheel mobile app, including the ability to earn loyalty points redeemable for free prizes — an initiative it’s testing in four markets, according to the report. Cartwheel users already have access to third-party coupons and other Cartwheel-exclusive discounts via the app.

Dive Insight:

After deciding that it couldn’t win a price war that it had sparked in the 1980s with giant rival Wal-Mart Stores, Target innovated designer tie-ups like the Victoria Beckham collaboration to differentiate its merchandise instead. In recent months the retailer has announced partnerships with mod-design company Dwell for home goods and furniture merchandise, and has revamped apparel and home goods for children through its new Cat & Jack and Pillowfort lines. Last month, outgoing Target CFO John Mulligan told analysts that home decor and apparel account for some $26 billion in sales.

Target executives downplayed early REDcard member access to the Victoria Beckham collection, telling the Star Tribune that it aims to learn from the experiment, part of its ongoing effort to reward its most loyal customers. But there's no doubt the Beckham collection is highly anticipated, destined to attract at least the level of fervor that its 2015 Lilly Pulitzer collection did — and which led to customer frenzy, as well as problems with resellers hogging much of the merchandise. Target was also criticized for leaving plus sizes of that collection for sale only on its website; it’s changed that policy with the Beckham release, which promises not only to assuage critics but also take advantage of what more brands are realizing is a significant market segment.

Moreover, while Target executives have promised to drive down prices on commodity goods, these moves to reward its REDcard holders and Cartwheel users could help make those customers sticky — for example, motivating them to come in for household basics and walk out with appealing, higher-priced merchandise in home decor and apparel along the way. Target in particular needs to keep its best customers close because even more than Wal-Mart’s customers, they overlap with Amazon’s Prime membership base, Frank N. Magid Associates' Senior Vice President of Retail Matt Sargent told Retail Dive.

Target's efforts to drive Cartwheel's value and utility are in contrast to Wal-Mart’s flagship mobile app, which includes a payment feature but is predicated more on customer convenience and ease of checkout than with rewards, app-only deals or differentiated merchandise. Target is also rumored to be readying its own mobile payment feature, which many analysts believe would likely be reserved for REDcard holders.