Retail giant Target is looking to jumpstart its online business by partnering with e-commerce platform Shopify. Starting today, the retailer said companies that work with Shopify can apply to join Target Plus, its third-party marketplace. The 2 companies did not disclose financial terms or the length of the deal.
Target Plus: a growing marketplace
Launched in 2019, Target Plus has been steadily adding new sellers and products. The marketplace currently offers over 2 million items from various brands, including household names like Crocs and Timberland. “Target Plus invites consumers to explore a curated collection of products from vendors we trust, so they can shop our assortment with confidence,” said Cara Sylvester, executive vice president and chief guest experience officer, Target. “Our partnership with Shopify extends the breadth of thoughtfully designed and affordable items available to discover and enjoy as part of Target’s distinctive mix of brands shoppers love.”
The Shopify advantage
Shopify’s involvement presents a significant opportunity for Target. Shopify boasts a large pool of merchants, many of whom cater to emerging trends. This partnership will allow Target to quickly identify and offer sought-after products to its customers. Additionally, Target plans to bring some of these popular items from Shopify sellers to physical stores, further expanding their reach.
Boost online sales
The collaboration with Shopify offers benefits beyond just adding new products. Target can potentially earn profits by taking a commission on sales made by Shopify merchants on Target Plus. There’s also the potential to generate revenue from advertising services offered to these sellers. Target is trying to get back to sales growth as consumers buy less discretionary merchandise, with the discounter lagging behind grocery competitors like Walmart. The big-box retailer has posted four consecutive quarters of declining comparable sales, and its overall sales have fallen in three of the past four quarters. The company has struggled to grow its e-commerce business, too. Target’s digital sales grew 1.4% in the first quarter, the first such increase in more than a year.
Target playing catch-up
While the partnership with Shopify is a positive step, Target is playing catch-up in the online marketplace race. Competitors like Walmart have already established robust marketplaces with a wider seller base. Additionally, new players like TikTok Shop and Temu are rapidly gaining traction. Target allows brands to join by invitation only. It has more than 1,200 sellers, according to Target. Amazon counts about 2 million sellers and Walmart has about 135,000 sellers, according to estimates by Marketplace Pulse, an e-commerce research tracker.
