From CNBC: 2024-06-24 06:19:26

Target is partnering with Shopify to bring new trendy brands to its website. Shopify brands can now apply to join Target Plus, Target’s third-party marketplace, allowing for more diverse offerings on the retailer’s website. Financial terms of the deal were not disclosed. Target’s Chief Guest Experience Officer emphasized the importance of discovering hot items quickly and making them available to online shoppers.

Target is aiming to boost sales growth by expanding its online assortment with trendy merchandise. The retailer has experienced declining comparable sales and struggling e-commerce growth, but is optimistic about returning to sales growth in the second quarter. Target expects comparable sales to increase by 2% and adjusted earnings per share between $8.60 to $9.60 for the full year.

Target’s stock price has underperformed, up only 2% compared to S&P 500’s 15% increase. Shopify, on the other hand, has seen a 17% decline in its shares this year. Target Plus, while smaller than other marketplaces, has seen growing momentum with a doubling of sellers and product count over the past year. Target Plus is considered one of the fastest-growing segments of Target’s business.

Retailers are turning to third-party marketplaces for higher profits. These marketplaces allow retailers to rely on sellers for inventory and take a cut of their sales. Target does not offer fulfillment services, unlike Walmart which is actively expanding its marketplace efforts to compete with Amazon. Other marketplaces like TikTok Shop and Temu are also experiencing rapid growth.



Read more at CNBC: Target taps Shopify to add sellers to its third-party marketplace