There’s an old adage about the more you buy, the more you save. In today’s evolving merchant market, the more places people can buy your goods, the more you save. Ecommerce brands selling through third-party marketplaces are able to expand their product availability and selection without spending extra on inventory while earning commissions from sales on those external platforms.
This logic is the driving force behind Target teaming up with Shopify to offer ecommerce merchants the opportunity to sell on their global third-party platform Target Plus. The partnership not only provides vendors greater access to buyers, it follows the trend of selling channel expansion across the ecommerce landscape. As in—to ensure your brand grows you need revenue streams from multiple sources.
Target’s Motivation
So why would a large enterprise like Target make such a pivotal pivot in its selling strategy? There are two motivators here: recovering revenue and building brand strength.
Recovering Revenue
Target may be a retail giant, but it’s been struggling to revive its sales growth. Trending lately has been a decline in consumer spending on discretionary items. Target has had four consecutive quarters of decreasing comparable sales, plus overall sales have dropped in three of Target’s last four quarters. And looking at stock market index tracking, while the S&P 500’s had an average 15% rise in retail chain realm, Target’s stock has underperformed compared to its broader market with only a 2% increase that’s yet to match its peak during Covid. With that kind of performance, it was time for a new strategy; enter the potential growth that comes with opening the doors to new merchants that can appeal to wider audiences.
Building Brand Strength
Consumers have plenty of retail giants to choose from. Target has recently had to deal with that competition, particularly coming from Walmart and its growing “grocery store chain game”. Just as McDonald’s introduced salads in 1987 to net a larger audience that would be attracted to lighter alternatives vs. traditional fast food, all companies tend to expand offerings as a tactic to increase brand footprint. California Pizza Kitchen sells way more than pizza, DSW shoe warehouse sells purses, massage parlors offer manicures. The point is that diversifying a portfolio means your brand packs more of a punch. Target Plus opening its doors to an assortment of sellers will lead to a greater audience and thus greater reach for the Target brand.
About Target Plus
Target Plus first launched in 2019. The online marketplace currently features more than 2 million products from brands representing a wide range of verticals. Everything from apparel to sporting goods to home furnishings and more can be found in the virtual bazaar. Notably, the present 1,200+ merchants that Target Plus partners with are chosen by an in-house team to maintain Target standards and ensure new and existing vendors/goods complement each other.
How Will the Partnership Work?
Ecommerce brands already selling on Shopify in the U.S. can apply to sell on Target Plus through Marketplace Connect. This app enables merchants to seamlessly integrate their inventory across leading marketplaces, which now includes Target Plus.
Not every brand will be able to participate. Target Plus presents itself as selective, so the retail giant is creating a “curated collection” of vendors they trust. That way Target buyers, new and old, can shop a wide variety of goods with confidence. As executive vice president and chief guest experience officer at Target Cara Sylvester notes:
“Our partnership with Shopify extends the breadth of thoughtfully designed and affordable items available to discover and enjoy as part of Target’s distinctive mix of brands shoppers love.”
The invite-only model ensures that Target can maintain an exclusive merchant roster and a high-quality experience for customers. It’s true that this model means, unfortunately, not all ecommerce brands will be able to take advantage of the selling platform. But those that do get selected can benefit greatly from the exclusivity because it equates to better visibility and opportunity for sales. By limiting participation to specific companies vs. anyone who creates an account through Shopify, your brand’s products will only be featured alongside strategically placed complementary brands, rather than a huge range of product types and competitors.
Note – that ecommerce merchants don’t necessarily have to apply for an invite into this club. The Shopify and Target partnership means that Target will actively search Shopify stores for products/brands that fit their company goals and criteria. In other words, if your ecommerce brand sells on Shopify, you may be discovered by Target and asked to join the Target Plus platform as a mutually beneficial partnership. You both increase your reach of customers online—your company reaching Target’s audience and Target reaching yours.
Keeping Things Target
Target refers to their third-party platform as the “un-marketplace” due to how much attention to detail has gone into making discoverability of brands and products as easy and enjoyable as possible. They focus on quality, trends, and products/brands that are forward thinking in design, technology, and consumer satisfaction. They even have a dedicated team of curation experts to ensure those standards are met. This commitment to quality is embedded in the Target Plus platform, so Target shoppers can expect an extension of this commitment to apply to Shopify merchants joining the realm.
Furthermore, because Target Plus is integrated within the rest of Target.com, as buyers search for items, participating Shopify merchants will appear in results. As a bonus, Target buyers can still access perks like discounts with their Target Circle Card, free shipping with orders over $35, and free returns.
The Impact on Your Brand
Shopify’s partnership with Target expands the reach of high-growth ecommerce brands, providing the ability to take their businesses to the next level. If your products are on-trend with Target’s desired audiences and fit well with their portfolio and standards, you could be included in that retail club. The endeavor doesn’t just further Target’s agenda, it keeps with Shopify’s mission and mantra of “Making commerce better for everyone”. Or, as Harley Finkelstein president of Shopify notes:
“As the world’s leading retail operating system, we make it easier and more accessible for brands to sell directly to their customers on the best channels.”
Target Plus is taking things even further to live up to Shopify’s ecommerce growth-friendly goal. Their partnership with Shopify allows retailers to expand and earn commissions on third-party sales without spending more on inventory. However, in addition to that, Target is the first mass retailer to team with Shopify to grant select merchants the opportunity to bring their products in stores as well.
Meaning that by applying for invite-only participation into Target Plus through Shopify, ecommerce brands can have their products available to Target audiences online and in Target stores nationwide. This in-store opportunity will start rolling out in the coming months.
If You’re a ShipMonk Client
ShipMonk believes in the power of seamless integration. With 100+ integrations and counting that are easily accessible and manageable through our 3PL fulfillment platform, including Shopify, it’s simple for the ecommerce brands we work with to try to participate in the new Target Plus program.
Our mission is to make ecommerce as accessible and efficient for brands as possible, from small businesses to major enterprises. So if you are looking to expand, take advantage of assorted third-party selling channels like Target Plus, marketplaces like Shopify, and more through our platform. Our account management team is here to help you extend your reach, and our overall company is always developing new EDI capabilities and solutions for your needs. Be sure to check back for our soon-to-debut “What’s New” monthly feature where we discuss the latest ways and resources ShipMonk has for enhancing your selling and order fulfillment process.
Your Target Plus + Shopify Takeaways
E-marketer, an industry market research company, has projected that retail marketplaces will account for more than 30% of all ecommerce growth in the coming three years. Target recognizes this, and is going all in with Target Plus; in the last year they’ve more than doubled the number of partners and products hosted there. The new partnership with Shopify will continue that investment in a mutually beneficial way for merchants that are also committed to growth.
So if you’re a U.S.-based ecommerce brand, consider applying to be part of Target Plus for a chance to have your products available in their curated online collection, as well as in stores (a first in the mass retail market). If you utilize Shopify’s ecommerce-friendly tools to your advantage, this can enhance your selling channel portfolio. And if you’re a ShipMonk client, setup and integration is easy through our platform. For questions on connecting your brand with this, and any of our 100+ customer-centric integrations, contact ShipMonk today.
As we reflect on the possibilities of this exciting third-party partnership, we’ll leave you with a statement from Target’s chief digital and product officer Prat Vemana.
“If you walk away only remembering one thing about Target Plus, I’d want it to be that you can shop with peace of mind knowing that every one of our more than 1,200 partners has been selected and vetted to deliver what consumers expect from Target.”
