Target increasing holiday broadcast ad spending by 21 percent

Target Corp. is hoping that a combination of simple, compelling deals and a bigger TV ad campaign — with some Hamilton-esque theatrics — will help resuscitate its slumping sales heading into the holidays.

The Minneapolis-based retailer is boosting its holiday broadcast spending by 21 percent and will focus on highlighting discounts such as the popular 10 days of deals program it is bringing back this year around Black Friday.

"We're raising the bar on our value communication," said Rick Gomez, Target's senior vice president of marketing, adding that the promotions will represent more than half of its messaging during the holidays. "Across the industry, over 50 percent of all purchases made during the holidays are bought on deal."

Target will roll out a series of promotions in mid-November that each week offer $10 off a $50 purchase in different product categories such as grocery, apparel and toys. And for the third year in a row, Target will offer free shipping on any size online order — a promotion Richfield-based Best Buy also launched earlier this week. Target's free shipping began Tuesday and will go a week later than last year, until Jan. 1, because Hanukkah starts Dec. 24 this year.

Executives noted that last year's 10 days of deals resulted in a 5 percent increase in comparable sales and higher traffic on those days.

"It was clear, it was straightforward and it drove a daily sense of urgency," Gomez said.

Target has not yet revealed what the actual promotions will be for this year's program. But one of those deals last year — 15 percent off on Target.com on Cyber Monday — resulted in the biggest online sales day in Target's history (and some complaints because of the site couldn't handle the crush of the traffic).

In typical Target fashion, its TV ads will incorporate a lot of storytelling. The spots will follow a young girl and Target's mascot, Bullseye the dog, as they put together a Broadway-style production called "The Toycracker," starring singer John Legend and his wife, model Chrissy Teigen. Many of the season's hot toys such as troll dolls, Barbie and Minions serve as the cast and crew.

"Think about it as the fun of the Muppets show, the freshness of "Hamilton" and the charm of a children's pageant all rolled into one," Gomez said. "We really challenged ourselves to do compelling storytelling throughout the whole campaign even in promotional spots."

For example, in one commercial that will be used to publicize Target's $10 off a $50 apparel offer, Teigen asks Barbie for help dressing for a holiday party while they are backstage.

Target is one of many retailers that are trying to find the right advertising balance between boosting their brand and various discounts and deals that more directly get people through the doors, said David Denham, president of Minneapolis-based creative agency Peterson Milla Hooks.

"It's tough out there from a retail perspective," he said. "Every brick-and-mortar retailer is competing against Amazon."

Target has already been doubling down on its promotional messaging since sales and traffic dropped last quarter, leading executives to lower their forecast for the rest of the year. In addition to some hiccups with upgrades to its grocery department and the transition of its pharmacies to CVS, Target's leaders have also acknowledged they haven't done a good enough job emphasizing the "Pay Less" side of its "Expect More, Pay Less" brand promise. So they have been adjusting their circulars and in-store displays to focus more on low prices — an emphasis that will be elevated during the holidays.

"This is a very promotional time of the year," CEO Brian Cornell said in a phone interview from the retailer's annual holiday preview event in New York. "It's the No. 1 holiday traffic driver."

One part of Target's holiday playbook that Cornell wasn't ready to talk about is when the retailer will start its Black Friday sales. While some malls and retailers have decided to forgo the earlier sales and stay closed on Thanksgiving this year, Target has not yet said if it will open its stores on the holiday as it has for the last several years.

While it is spending more on broadcast, including a 67 percent increase in ads on Spanish-language networks, Target's overall holiday marketing dollars will be flat compared to last year since it will shrink its digital budget as it leverages data to make investments in more impactful ads, said Gomez.

The holiday ad campaign will launch next week and will initially air on networks such as Food Network and HGTV since the upcoming election will still be top of mind for many people.

"We don't want to be tone deaf to what's going on," said Gomez.

Later in the season, Target will lean into more "family viewing opportunities" such as football. It is increasing its marketing buy with the NFL by 44 percent this year, including during three games on Thanksgiving Day when its ads will air.

The campaign will culminate in two four-minute segments that will air during ABC's network premiere of the movie "Frozen" on Dec. 11. In those spots, viewers will see the final "Toycracker" performance in action.

During a walk-through of its holiday offerings, Mark Tritton, Target's new chief merchant, said the retailer has brought in a bigger assortment of new or exclusive toys this year including thousands of Star Wars-related products. In electronics, which were also a trouble spot for Target the last quarter, the retailer thinks Apple products will be a bright spot. It will also offer some of the latest emerging technology such as PlayStation VR and other virtual reality headsets and new connected home products such as Google Home.

In addition, Target is banking on the Nov. 11 release of an exclusive 10-disc box set from Garth Brooks to be a big hit to start off the season.

And, Tritton added, Target also has brought in its biggest assortment yet of Christmas-themed matching pajamas for the whole family. Also new this year is a matching ensemble for the family pooch.

Kavita Kumar • 612-673-4113