Differentiate Or Die / by Andrew Galvin

Target is in the news for all the wrong reasons – looking at a $100M write-down of stock and an estimated $145M cost to rebuild the business. (Catie Low, SMH, June 23).

What’s of interest as a branding specialist is that at some point Target failed to follow a couple of fundamental rules of strong and enduring brands, that is, to be both different and compelling.

Target was once riding high on the wave of low cost designer labels making it the darling of budget conscious mums. That wave has gone.

So how did this happen? History tells us that Target has been successful but at some stage in the rise of stable-mate Kmart, Target began to lose its way. It became both cheap, and for some, too expensive – competing with Myer at one end and Kmart at the other.

This loss of focus led to a lack of differentiation. This in turn lead to confused customers who were no longer clear on what Target stood for. Confused people don’t buy.

If you’re not different you better be cheap. Unfortunately for Target, Kmart owns cheap and there’s plenty of competition from Myer, DJ’s, H&M and Zara at the opposite end.

The challenge for Target is to again become different and compelling.