Target makes very Tarzhay move shoppers will love | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

In an age when inflation can’t seem to cool down, retailers are bearing the brunt. Consumer spending declined in February, and that trend is likely to continue as broad economic concerns and recession fears take hold.

As it is, an estimated 25% of Americans are living paycheck to paycheck, according to Bank of America. And with borrowing rates remaining high, consumers are being more cautious about how they’re spending their money.

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Elevated grocery prices are also a concern. A good 70% of consumers are struggling to put food on the table, per a late 2024 Swiftly report. And 55% of consumers are specifically making shopping decisions based on discounts and promotions to save money.

Not surprisingly, this trend has battered retailers and no doubt contributed to the more than 7,300 stores closures that took place in 2024, per Coresight Research.

Big-box stores tend to be more immune to closure activity, namely because they offer the convenience of shopping for essentials and discretionary items under one roof. But even big-box stores are feeling the pain of a broad consumer pullback.

Target’s latest move should draw in customers.

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Target needs a lifeline

Target’s most recently quarterly earnings weren’t as dismal as some investors worried they’d be. Adjusted earnings for the three-month period ending Feb. 3 were $2.41 per share, which blew past Wall Street’s $2.26 projection. Revenue for the quarter was $30.92 billion, versus an expected $30.82 billion.

But the news out of Target wasn’t all positive. During its March earnings call, the company warned that it expects to see a notable drop in profits in the coming quarter as it grapples with ongoing uncertainty around inflation and tariffs.

It’s not an uncommon thing for retailers to see softer sales during the three-month period following the holidays. But the reality is that Target lost some of its foothold in recent months following its announcement that it planned to end its DEI-focused efforts. A 40-day boycott of Target began on March 5.

Still, if there’s one thing Target has going for it, it’s the fact that it tends to draw a younger, trendier audience than its major rival Walmart.

While Walmart shoppers commonly frequent the store for the savings and selection, Target shoppers remain loyal to the brand for its fun product lines and hip offerings. And a new partnership could be just what Target needs to bust out of its recent slump.

Target’s latest partnership is a savvy move

In February, Target announced that it was entering into a partnership with Warby Park to add shops inside its massive stores. The company is big on the shop-in-shop experience, having already dabbled successfully with Ulta in that arrangement.

Target’s Warby Parker shops will offer the company’s signature selection of eyewear. They’ll also provide eye exams to customers. The first five Target shop-in-shop Warby Parker locations are set to open during the second half of the year, with additional locations rolling out in 2026.

The partnership is a strategic one for Target as it attempts to get back into consumers’ good graces and retain its loyal customer base.

“Warby Parker at Target reflects both brands’ commitment to style, affordability, quality and convenience,” said Christina Hennington, EVP and chief strategy and growth officer at Target. “As we test and learn with this new partnership — bringing Warby Parker’s expertise into select stores — we’re enticing new consumers to discover more of Target.”

At a time when consumers are being choosy, Target needs to focus on being the trendy powerhouse it’s known to be. As CEO Brian Cornell said during the company’s most recent earnings call, “In a world where shopping has become less inspiring, consumers expect us to be the place they can recapture the joy of retail.”

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Not only do customers expect Target to be fun, but they expect a higher-end shopping experience. And the company needs to remain agile if it wants to hold onto its younger audience.

As Cornell said, “Our guests are looking for Tarzhay…We’re the place they go to discover on-trend, affordable products that they can’t find anywhere else.”

Partnering with Warby Parker is an optimal way to put the Tarzhay back in Target. The store is also introducing 2,000 new beauty products to its already impressive lineup as a way to differentiate itself from its main competitors and shine.

Maurie Backman owns shares of Target.