Wednesday, 9 August 2017

Tech: Target is betting on dog toys to help it stave off Amazon's charge

dog

Target’s has announced a partnership with pet company Bark, its latest attempt to join hands with a digital e-commerce native.

  • The move is part of Target’s ongoing attempt to lock arms with a growing list of e-commerce natives as they grapple with Amazon's growing dominance.
  • It also allows Bark to expand beyond its subscription roots and have a brick-and-mortar retail presence.

Target has announced that it will start carrying products from Bark, the pet company behind the pet subscription service Barkbox, starting Sunday. This is the first time that Bark’s products will be sold at retail stores.

While the partnership allows Bark to expand beyond its subscription roots and have a brick-and-mortar retail presence, the bigger story is Target’s ongoing attempt to lock arms with a growing list of e-commerce natives as they grapple with Amazon's growing dominance.

Indeed, the Bark deal comes on the heels of similar partnerships for Target, including the men's shaving brand Harry’s and the disruptive mattress startup Casper respectively.

"Recently, we’ve recognized our unique ability to provide a home for some great digital and subscription-based brands who understand they need a physical space to reach more customers. These partnerships are a win for the brands, for Target and for our guests," a Target spokesperson told Business Insider. "Brands see incremental growth and access to new customers, Target gets the benefit of adding newness to our product assortment and learning from highly entrepreneurial partners, and most importantly, our guests get convenient access to these exciting new brands as part of their regular Target run."

Target isn't alone. Retail incumbents have been coping with the ongoing shopping disruption by making internal investments in digital and e-commerce, going the acquisition route like Walmart with Jet.com, or investing in exclusive retail partnerships with digital natives, like the Bark pact.

"In today’s age, you have to keep innovating," Jason Goldberg, senior vice president of commerce and content at ad agency SapientRazorfish, told Business Insider. "This is Target’s way of making sure that it is on the cutting edge of innovation and digital, and is far more economical than making a direct acquisition or building it organically from scratch."

"Retailers must show consumers continuity through an ‘omnichannel’ strategy, unifying online, mobile and in-store," said Curt Thornton, CEO of Provision Interactive Technologies. "This unification between brick-and-mortar and e-commerce is one of the key strategic aims behind Target’s announcement."

It is also an opportunity for Target to attract a younger and higher-income group of shoppers, which traditional retailers like itself have been struggling to do for years, said Goldberg. Since launching in 2012, Bark has carved a niche for itself in the $69 billion pet industry, becoming one of the fastest-growing brands with 500,000 subscribers and reaching over $100 million in sales last year.

Moreover, it has done that on the back of data. The company has built its toys and treats based on consumer data it has gathered from shipping 50 million products. This is an attractive bet for Target as it gets access to this goldmine of data.

"Almost 70% of our guests have pets at home," Christina Hennington, senior vice president of essentials and beauty at Target, said in a blog post. "So we saw an opportunity to become their ultimate pets destination by offering new and exclusive pet brands they can only find at Target, alongside everyday must-haves they need, saving guests time and money with every Target run."

There is also much more to be learned from these partnerships. Harry’s, Casper and Bark have all upended their industries, by offering a subscription services that sell blades, mattresses and pet products for a fraction of a price compared to their competitors and by successfully building direct-to-consumer brands. They have aced social media, using it to not only market but also sell their products.

On the other end of the spectrum, it is an equally important bet for the upstarts to land in traditional retail stores. While they can initially afford to bypass stores, they ultimately have to look to Target and its competitors to help expand their reach and scale.

"These digitally native brands struggle to get past a certain size if they're only selling via digital," said Goldberg. "But you’re not going to get to a billion dollars that way, there just aren’t enough cheap eyeballs to buy through digital."

Matt Meeker, co-founder at CEO at Bark, agrees.

"While BarkBox continues to thrive, the subscription model isn’t a fit for every dog parent. This launch gives us another accessible channel for reaching pups and introducing Bark to new audience," he told Business Insider. "Target’s nationwide network of stores helps us to reach more pups and their parents with Bark's original toys and treats."

The Target partnership also helped Casper expand its footprint, allowing it to reach new customers including those who prefer to try products out first. The company has frequently set up pop-up stores to appeal to the same audience.

"Since our launch in 2014, we have seen a strong demand from consumers to experience Casper products in the physical world," Taryn Laeban, Casper's chief commercial officer, told Business Insider. "Our strategic retail partnership with Target has allowed us bring Casper to over a thousand locations across the country."

The Bark partnership was one of the several pet-related announcements that Target made Wednesday. The retailer has revamped its own Boots & Barkley pet line with over 200 new items for cats and dogs and will also partner with St. Paul-based style blogger Kate Arends of Wit & Delight for a pet clothing and accessories line.



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