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Opening the Door on Target’s new Threshold

RR Threshold by TargetPerhaps the Dayton family should have come up with another name for its discount department store start-up back in 1962 if it wasn’t prepared for the inevitable – and as-it-turns-out endless – questions raised by retail observers, competitors, suppliers and, oh yes, customers, about whether the store was on Target, had missed the Target, or otherwise was involved in some Target-related activity.

Be that as it may, those are valid questions to ask, more so than ever when it comes to the country’s second-biggest general merchandise retailer’s home furnishings offerings and its new marquee program called Threshold. Officially rolled-out this past spring after some soft teases over the prior months, Threshold is the single-largest private label program Target has ever introduced, and is no doubt being counted on to carry much of the merchandising load for the retailer in the months and years ahead.

So, six months after its debut, the obvious question is, did Target hit – sorry Douglas Dayton – its target? Okay, we all know the Target story. Launched by the Dayton Department Store Co. in 1962 – curiously enough the same exact year that Walmart, Kmart, Meijers and who knows who else also opened their first stores – the store meandered along for several decades, gradually waiting out the winnowing-down process that beset the discount world during the 1970s, 80s and into the 90s. Target continued to grow but was always trailing the channel leaders, first Kmart and then Walmart.

Target Changes the Game

Finally, sometime in the 1990s, Target management (and depending on which retailing urban legend you subscribe to, that included a young merchandise manager named Ron Johnson) came to the conclusion that it would never win playing Walmart’s game: they were unbeatable. There was only one thing to do: they changed the game. So was invented the Cheap Chic merchandising philosophy: keep the prices low but put a little style into it. Home was a big part of the leading edge of that strategy as designers like Michael Graves starting creating exclusive products for the store, which soon was referred to – first affectionately, later increasingly obnoxiously, as Tar-Jay. (By the way, if someone will offer an amendment to the US Constitution banning the use of the name Tar-Jay, they can put me down for a $100 contribution to the cause.)

Over the past 15 years, Target has successfully marketed the cheap-chic persona through a brilliant advertising and promotional campaign that has consistently been worlds above the actual merchandise presentation in the store. (How many of us know somebody upon their first visit to a Target being profoundly disappointed that the store itself was a total disconnect from the ads they had seen on TV?) But the strategy worked and Target is now a solid number two in the discount world, with a home business substantially better developed than anybody else in its channel of distribution.

The roster of private label and proprietary brands the store has used in home is certainly impressive, from the famous, website-crashing Missoni program of a few years back to a steady cast of characters that has included Liberty of London, Shabby Chic, Woolrich, Thomas O’Brien and, most recently, Nate Berkus. Into this mélange has come Threshold, which in addition to being the biggest cross-category home program the store has tried, is also arguably the most important. A revived Walmart home effort, a resurgent Pier 1 going after the same design-on-a-budget shopper, the relentless Bed Bath & Beyond machine and an ever-expanding Home Goods are all making the home playing space a very competitive sandbox.

A New Doorway

Threshold, according to Google (sorry Rowan and Martin, nobody uses Funk & Wagnalls anymore), means “a point of entry, a beginning,” and while the home connection is a bit of a stretch, the reference to a beginning is a bit odd considering how many private brands Target has used over the years. The notoriously business-press-shy Target management didn’t provide a lot of details about the positioning of Threshold within its home assortment, but a little shopping reveals it to be right smack in the middle of the Home Sweet Home spot.

For example, the Threshold solid color bath towel regularly retails at $6.99, more than the opening price point RE (Room Essentials) towel at $3.99, but below the $9.99 Nate Berkus and Thomas O’Brien offerings, and nearly half the price of the top-of-the-line Fieldcrest bath towel that sells for $12.99. If the pricing is middle-of-the-road, so too are the designs. Introductory marketing for the brand – it got premium positioning and six pages in its Sunday circular debut last spring – pitched it as “Quality and Design,” a slogan every bit as generic as the store’s overall mantra, “Expect More. Pay Less.”

Of course, with a slogan like that, the cynic could ask if these products combine quality and design, does that mean other products in the store have neither? Glad there aren’t any cynics around here, aren’t you? Threshold cuts across most of the individual home categories but largely focuses on the soft home world of home textiles and in home décor, two categories that are not exactly bastions of national brands. In areas where there are well-known names like appliances and cookware, Target continues to rely on old standbys like Oxo, Kitchen Aid, Bose, Dyson and Calphalon.

Comfy Cozy

If the quality portion of the positioning equation is a little hard to judge, since I haven’t bought one of every product and used all of them non-stop for the past six months, the design side can be judged a little easier. Bedding patterns, bath colors, home décor items like picture frames, lamps and decorative pillows, and outdoor furniture all appeal to that great metro/urban/casual/comfy/contemporary customer that seems to be the holy grail of the American home furnishings industry these days. If it reminds you of what you might find in the latest Crate & Barrel or West Elm catalog, you aren’t alone. In fact, in an online blog on Threshold (note to e-posters: get a life.), a number of people noted the similarities with more than a bit of disparaging attitude. When you shop Threshold in a store, you get the full Target display and merchandising experience…which is to say, nothing special. There are no dramatic product presentations that pull the whole product story together, and if you happened to miss an end-cap or two, you would be hard-pressed to distinguish the Threshold on-shelf offerings from any of the other brands and wannabe brands for sale. All of the creative advertising, the endless product development and clever packaging: It all comes to an abrupt end when the shopper comes face-to-face with the physical product presentation. One wonders why the mavens in Minneapolis have not been able to find a way to do this better, nearly two decades into this thing. So, how does Threshold rate? Again, Target doesn’t share a lot of confidential sales data with most people (much less me), so it’s hard to know whether it’s been a business success. The next best test will be the fall refresh of the home department when we see what kind of role the brand plays in the new assortment, but really we won’t know until next spring when the major reset occurs.

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From a design and marketing standpoint, you have to say Threshold has been one of the better generic rollouts the home world has seen. The products, the assortment, the prices, the merchandising: they are all…well, nice. But if the bar for such programs was set by the original Martha Stewart program at Kmart in the mid-1990s – still the best designed, merchandised and game-changing home collection ever – Threshold just doesn’t hold up. Even Target itself, albeit on a smaller, more limited scale, has done better over the past years with several of its other proprietary offerings. Threshold isn’t bad, don’t get me wrong. I just expected more.

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