Target, for the first time in the company’s history, introduced TV ads featuring price point messaging. The spots, which debuted during the Golden Globes on Sunday, were the second iteration of its “A new day” brand message.
However, this time around, actual prices were added in an attempt to lure cash-strapped consumers. “The new vacation glow” featured Neutrogena Micro-Mist Self-Tanner for $9.39 while “the new nightclub” showed the Wii Dance game for $69.99. The message: “A new day. New ways to save.”
“This is the first time we’ve featured price point in our broadcast advertising,” said Jana O’Leary, Target rep. “As a whole we’ve increased our emphasis on value messaging. Our [tagline] is ‘Expect more. Pay less.’ We’re putting more emphasis on the pay less promise.”
The radical change in approach, which is more consistent with Wal-Mart’s strategy, came after a disappointing holiday season. Target’s net sales fell 6.1 percent in November compared to the year prior. Sales then leveled off in December rising 0.2 percent.
Still, the rapid decline in same-store sales has been a concern. In November, same-store sales dropped 10.4 percent. In December they were off 4.1 percent.
The price point ads “are a sign of panic,” said Simon Sinek, president of the New York-based strategic consultancy Sinek Partners. “It’s a short-term strategy. Anyone can sell product by dropping their prices, but it does not breed loyalty.”
Target’s discipline in not mentioning price over the years was one of its competitive advantages, Sinek said. “Nobody is saying Target isn’t cheap, they just didn’t lead with it. Fashion came first and price came second. Now they are just like Wal-Mart and Kmart. Welcome to the gang.”
O’Leary said the ads “aim to offer smart-value driven solutions.” Price point messaging will continue in the months to come supported by in-store signage and merchandising presentations.
“We understand it’s a tough time for our guests, corporations and retailers,” O’Leary said. Target is helping everyone “save money and time in this economic environment. We are showing how we can offer solutions without our guests having to endure a complete lifestyle makeover.”
Target spent $515 million on U.S. media (excluding online) for the first 10 months of 2008, per Nielsen Monitor-Plus. In 2007, it spent $629 million. Target’s lead agency is Peterson, Minneapolis.
