The Effect of Target’s Commitment to Lower Prices On Beauty

Massive retailers have carried a one-stop-shop appeal for a long time. Companies like Wal-Mart and Target have always offered this kind of selection, but coupled with competitively lower prices than the competition. The latter reflects more of a commitment than a slogan for either.

This hasn’t been the case as of late for many categories though, which has prompted a further assessment from Target. Food and personal care are among the categories the retailer has stated a reaffirmed commitment towards lower pricing.

Aside from the movement of both Wal-Mart and Target in terms of offering a cheap selection of groceries, lower priced beauty products carry a noticeable impact. The industry has faced many daunting price alternatives, though arguably none with the size of Target.

The difference lies in an alternative in price without an alternative in selection. Simply, it is a daunting change in perspective for beauty consumerism and retail.

Making the transition puts brands in a more difficult position regarding their own product pricing. It ripples all the way through the chain of supply as well and raises questions for manufacturing costs. Stiff competition is in every direction, specifically similar stores like Wal-Mart, but online retailers cannot be forgotten either.

Amazon is a popular place to purchase low-cost products across just about any category of retail. Operation or employments don’t burden them as it does for traditional retail stores either. It all boils down into an experience that lowers a near-equal amount of hassle for them as it does for their customers.

Target’s ability to compete with pricing such as this lies in lowering prices in stores and online altogether. Undoubtably, emulating the digital marketplace from competitors like Amazon would be beneficial considering the change in trends.

This was reflected in a statement from Target’s chief executive officer, Brian Cornell, who stated that the brand would “accelerate our investments in a smart network of physical and digital assets as well as our exclusive and differentiated assortment, including the launch of more than 12 new brands, representing more than $10 billion of our sales, over the next two years. In addition, we will invest in lower gross margins to ensure we are clearly and competitively priced every day. While the transition to this new model will present headwinds to our sales and profit performance in the short term, we are confident that these changes will best position Target for continued success over the long term.”

The impact upon pricing may be evident in the coming months as Target, and subsequently competing retailers, adapt.

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