Target’s New Minimalist Sub-Brand Attracts Millennial Buyers

Target Launches Made by Design with the Millennial Shopper in Mind

Made by Design is Target’s newest sub-brand, and is the most daring product line yet from the one-stop shopping retailer. The brand consists of household products ranging from bath towels to kitchen tables, aiming to be a mix of Muji’s minimalist vibe with Ikea’s low prices. Products will range anywhere from $1 to $260, allowing Millennials to furnish an apartment or home for just a few hundred dollars.

Target gives new life to its design brand with Made by Design, predicting it will reach $1 billion in sales within the first few years of launch. Target challenged its designers to find balance in achieving affordable products with a look that is unique to Target, coordinating great design with budget pricing.

Although Target has always differentiated itself from Walmart with design elements in items such as clothing (Missoni) and teapots (Michael Graves), Target lost some of its steam in growth opportunity over the past decade with a mere 10% revenue increase from 2008 through 2017, paling in comparison to Walmart’s solid 25% growth during the same period.

Design is Target’s Focus for Growth

Re-focusing its design-based retail strategy to turn around the past decade of less-than-stellar performance, Target’s CEO Brian Cornell invested $7 billion in store remodels. This move incorporates stunning design into the entire shopping experience, reinforcing both the strength of good design found in the products they carry, and why Target stands apart from the competition.

In light of Millennials wanting Instagram and HGTV-worthy dinners and décor, Target has seen a boom in home furnishing sales at a whopping $2 billion a year. Houseware and home furnishings are proving profitable because the designs don’t change nearly as often as fast fashion does.

With increasing competition from retailers such as Walmart and Amazon, Target is set to offer minimalist, unique and affordable products combined with an engaging in-store experience. Made by Design is the first Target sub-brand to display the bullseye on product packaging. Further evidence that Target is serious about its design future.

The Adulting Millennial is a Mindful Shopper

Focusing on Millennials as they enter life phases that spark home furnishing purchases is a key part of Target’s growth strategy. Whether it’s starting college, moving into a new apartment, Millennials buying a new home, and/or having kids, all of these situations can drive these elusive shoppers to retail outlets like Target in search of sleek, simple and high-quality home furnishings that will last, without breaking the bank.

Adulting Millennials are more mindful in their purchases than previous generations and are in search of a more balanced lifestyle that carries over into their home décor. Having a simple yet cool design blends well with mindful living.

Target’s market data found that Millennial shoppers were coming to Target to buy many essentials but leaving to go elsewhere to purchase houseware and furniture. Target was missing out on opportunities to meet customer needs in physical stores, subsequently losing the “customer-in-hand”, or what Target refers to as the “guest-in-store”.

They were not losing customers per-se, but losing out on potential sales with Millennials already in the stores. For example, it makes sense to provide furniture and décor options to shoppers before they leave the store and head to Ikea. In an attempt to woo Millennials, Made by Design would be the go-to place for all things home furnishings. 

Millennials Look for Functional Design

Target’s core team of designers focuses on a firm “design-thinking” approach, keeping the Millennial shopper in mind when designing functional yet attractive products. To accomplish this, the core team has worked closely with customers to understand their needs and feedback on products, especially Millennial women as women represent 68% of Target’s customer base. 

Understanding the design elements and features that customers want has led the team to conduct research visiting several American homes to observe how people furnish their homes and what they keep in their cabinets.

The team discovered that many people struggle with storing and stacking items in their cabinets, creating frustration in keeping things organized.  This insight enabled the design team to understand in real time the pain points Millennials have with home furnishings and organization in smaller living spaces.

The design team also realized how important the sense of touch was in physical purchases. Shopper’s touch everything before they buy it in-store, so if an item feels good when handled, it is more likely to be purchased.  Touch plays into all design elements, including a non-stick baking sheet that was designed to bend minimally because customers complained that traditional baking sheets warped.

Millennial Shoppers Welcome Targét

Made by Design is transforming “Target” to fashionable “Targét”, which is a well-known nickname.  A challenge the design team faces is using quality materials on a budget that also feel appealing to the touch.  Instead of using sketches to visualize product concepts, the team creates temporary showrooms to successfully conceptualize how products look, feel and function.

Innovations that meet Millennial needs, for example, include dishware with a matte finish on the bottom to enhance the grip when wet.  In the bedroom, fitted sheets are labeled “top” or “bottom”, easing the chore of making the bed.  In the bathroom, shower rods that don’t rust and towels with loops for hanging on hooks are design elements that are both visually appealing and functional at the same time.

Although design is at the core of the Made by Design brand, the goal is to also offer cheaper options to more expensive products.  For example, Target is offering products similar to Rubbermaid or OXO but at a lower price point.  This isn’t expected to take away from the higher-priced brand items but rather to provide options to all shoppers in multiple price ranges.

Made by Design offers the Millennial shopper a one-stop shop to get their hands on home furnishings that are of high quality and sleek design, all at an affordable price.  Move over Target and welcome Targét.