CLIFTON, N.J. — In addition to aisles of diapers and colorful onesies; target In some of the retailer’s larger stores, shoppers can now find baby brands typically carried in specialty boutiques.
Shoppers will be able to see, touch and try strollers, car seats and high chairs outside of the cardboard box at approximately 200 stores, representing approximately 10% of the retailer’s store footprint. You can also find products from high-end brands, such as the $1,000 UPPA stroller. Customers can also browse nearly 2,000 new baby products available at all of the retailer’s stores and online.
Target’s Baby Boutiques, which have been rolling out over the past two months, are just one part of a broader effort to revamp its stores and reach key customer bases, including busy families. walmart.
Target’s progress in attracting these shoppers will help determine whether Chief Executive Michael Fidelke, who took the top job in early February, can follow through on his promise to end the company’s three-year sales slump. The company is scheduled to report first-quarter earnings on May 20, the first three months under its new CEO.
Target operates “baby boutiques” in about 200 stores where customers can touch, touch, and try out products such as child seats and strollers. Premium brands like UPPAbaby and Stokke have also been added.
Melissa Repko | CNBC
In an interview with CNBC, chief merchandising officer Carla Sylvester said families with children 5 and under spend twice as much as the average Target shopper, and families with children of various ages visit twice as many stores as the average shopper.
He said when Target took a hard look at its business after Fidelke was tapped to lead the turnaround effort, it realized Target had a large share of its sales from young families. She said this recognition led Target to lean even further into its competitiveness.
“We believe Target has a great opportunity to truly deepen our relationships with busy families and become their first choice for even more of their everyday needs,” Sylvester said.
The strategy, which hinges in part on improving product quality, enhancing the in-store experience and expanding convenient options like same-day pickup and delivery, is critical to growing sales and fending off Walmart and Amazon.
The major retailer said in March that it expected annual sales to rise again this year. Net sales increased approximately 2% year over year and is expected to increase year over year in each quarter, the company said.
Customer traffic to Target’s stores and website has declined for the past four consecutive quarters, but there are some encouraging signs that store traffic will increase again, according to Placer.ai, an analytics company that uses anonymized data from mobile devices to estimate store visits.
Still, Target faces challenges to its turnaround plan. Among them, they must overcome intensifying competition from rivals, the new threat of a boycott by major teachers’ unions as the new school year approaches, and the risk that soaring gasoline prices will curb consumer spending.
Simeon Gutman, a retail analyst at Morgan Stanley, said such a rise in gas prices could worsen America’s “K-shaped economy,” where the spending gap between low-income and high-income Americans widens. At retail rival Wal-Mart, profits from wealthy households are offsetting lost sales from cash-strapped customers, he said.
“I don’t think Target is in as good a position as other companies in that regard,” he said.
Still, he said he is encouraged by the changes Target has made to strengthen its stores and revamp its product categories, which he believes will increase foot traffic.
Target already sells many baby products, including diapers and clothing. But the company is revamping its baby division to further increase sales from busy families.
Melissa Repko | CNBC
Why Target revamped its baby section
The revamp of Target’s infant division is the company’s biggest investment in the space in more than a decade, which may come as a surprise to some who follow the latest U.S. birth rates.
The number of births in the United States has fallen from a peak of 4.32 million in 2007 to 3.61 million in 2025, according to preliminary data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. This represents a decline of about 16% over the past 18 years, which researchers attribute to a variety of factors, including fewer teenage pregnancies and more women delaying childbearing until later in life.
But Sylvester said that even with low birth rates, Target needs to change the way it appeals to families, starting with the baby section. He said Target’s research shows that when consumers become parents, they tend to consolidate where they shop because they have less time. That means if Target can attract those customers, it can sell not only more diapers and wipes, but also more food and clothing, he said.
Sylvester added that Target is prioritizing the baby category because it’s a way to earn the trust of first-time parents, who have high lifetime value across all of the retailer’s categories.
Target is the third-largest U.S. retailer of baby products by market share, but has fallen behind its competitors in recent years, said market researcher Numerator. The company includes baby products such as strollers, diapers, formula and baby food in its category definition, but excludes baby apparel.
In the 12 months to the end of February, Walmart had the largest share of the category at 27%, followed by Amazon with 24.4% and Target with 17.6%, according to the latest available data.
However, over the past two years, Target’s market share has declined from 18.6%, while Walmart’s market share has increased from 25.4%. According to Mr. Molecule, Amazon’s market share has remained roughly the same.
Target declined to say how much it is spending to turn some of its baby products aisles into boutiques, but the company has ramped up investment to fuel its turnaround. The company announced in March that it would spend about $5 billion in capital expenditures this fiscal year, an increase of more than $1 billion from the previous year. The funds raised will be used for store openings and renovations.
Sylvester said Target plans to add baby boutiques to more stores, but the timing has not yet been determined.
By the retailer’s own admission, Target has lost the loyalty of some families. Sylvester gave his frank assessment during an investor presentation at Target’s headquarters in early March.
“Our performance in recent years has not lived up to expectations, and that is our responsibility,” she said. “We lost the clarity and discipline that made Target a beloved place for busy families.”
While it’s unclear how much of the decline in store and website traffic is specifically driven by traffic from families, Morgan Stanley’s Gutman said he sees the baby products category as “inextricably linked to Target’s success” because it is “the gateway to sales expansion and wallet share gains over the next several years.”
“This is one of the categories that I think they have a right to win, and they should,” he said.
Baby boutique
At Target’s Baby Boutique, more products are displayed outside of cardboard boxes.
Melissa Repko | CNBC
Sylvester said Target’s baby boutique is a step ahead of its predecessors. She said the baby department now feels like a curated shop meant to simplify the hectic decision-making process. Target now has popular premium brands like UPPAbaby, Stokke, Bugaboo, and Doona. They also stock a large selection of items from their own baby brand, Cloud Island, including clothing, bibs, and crib sheets.
Target baby boutiques now also allow customers to push, fold and lift items like strollers before making a big purchase. This is an in-store experience that has become rare due to the closure of baby goods stores. Buybuy Baby and Babies R Us closed after bankruptcy, but Babies R Us has returned as a pop-up shop in some areas kohls store.
The company is also piloting a baby concierge service through Tot Squad, offering free guidance to shoppers as they compare products and create a baby registry. Sold directly in baby boutiques and online.
Second-hand marketplaces like Facebook Marketplace also pose a competitive threat to all retailers, as families can find luxury brands at deep discounts. But big-name brands may still be worth a year or two, so a higher purchase price may be justified in these markets.
Some of Target’s newer baby brands are more expensive, such as the UPPAbaby stroller, which costs about $1,000.
Melissa Repko | CNBC
WildBird, a brand that makes baby carriers, hit Target shelves in March. Co-founder and CEO Nate Gunn said this marks the direct-to-consumer company’s first major foray into brick-and-mortar stores.
The rise of social media has led to the launch and growth of even more brands. But he said that has led to confusion and overwhelm, especially in the infant sector.
“Customers are increasingly dissatisfied with shopping, even though it’s easier than ever,” he said. “Fatigue is, ‘What do I buy?'” And that whole idea gets even more complicated in the baby scene, because parents buy hundreds of products over the course of a few months. ”
Compared to other Target stores, the chain’s baby section “feels outdated” and “a little commercialized,” said Mr. Gunn, a father of three who has shopped in the baby section of major retailers.
Baby boutiques could help Target better connect with the many parents who visit its stores, drink Starbucks coffee and take their toddlers and babies for walks, he said.
“I want Target to focus on what makes it different from Walmart,” he said. “Mr. Walmart, I go there and I’m looking for the best price possible. Mr. Target, I’m looking for a more premium experience, but I’m still looking for something that’s accessible.”
