Target's storewide 'Fun Run' discount is testing the attention of shoppers

Target has a first-of-its-kind special — 10 percent off nearly everything in the store — running this week. But you have to look hard to know it.

Heidi Sandstad, a Target regular who has a Redcard charge card and the Target app on her phone, was not aware that she could get 10 percent off everything in her cart as she shopped in the Minneapolis Lake Street store on Wednesday.

"Why aren't they telling people?" she asked.

Actually, it was on page two of Target's weekly ad circular in Sunday newspapers and in its stores. It's not on any banners or placards at the front of the store, although other "Fun Run" weekly promos are highlighted.

Here's the deal: Get 10 percent off virtually all purchases in one visit to the store through Saturday. Shoppers need a Redcard and the Target app on a smartphone to be eligible. The offer is good only in stores and may be combined with Cartwheel specials and sale prices.

Ten percent off may not be a significant discount in a department store, but it's very rare for a discount store to offer it. In 2016, Target had 15 percent off specials in store and on its website on Cyber Monday, the Monday after Thanksgiving that is the biggest online shopping day of the year in the U.S. In 2017, Target confined the 15 percent offer to online purchases.

But the Sunday to Saturday 10 percent discount — which is also happening as Target presents a flurry of 20 percent off Cartwheel offers and a $50 discount off membership in its same-day delivery service — is a first, Target spokesman Joe Poulos said.

"This promotion will drive more traffic into stores, but it will come at the expense of profit," said Brian Yarbrough, an analyst with Edward Jones. "They need to drive more people in stores for full-price items like new brands." Heyday teen accessories, Wild Fable retro clothing, Made by Design home accessories, Prologue for women and Chrissy Teigen cookware are exclusive lines that have all been recently introduced or soon will be.

This week's promotion is designed to sign up new Redcard credit or debit cardholders. Target's Redcard penetration is showing signs of weakness.

The Minneapolis-based retailer expected that it could get 25 to 30 percent of its shoppers to use the Redcard after its introduction, Yarbrough said, but acceptance dropped to 24 percent in the most recent quarterly report compared to 25 percent penetration a year ago. As a further incentive to open a Redcard account this week, those who apply and get accepted also receive $30 off a future purchase of $100 or more.

Burt Flickinger, an analyst with Strategic Resource Group in New York City, said Target is striving to improve price perception and make its charge card a better competitor with Kohl's cash program, the TJX Rewards card at TJ Maxx, Marshalls and Home Goods, Costco, Best Buy and Bed Bath & Beyond.

"[Target] raised its everyday prices too high for too long and this week's sale is an attempt to become more competitive again before the ever more important Halloween season," Flickinger said via e-mail. "It's trying to get shoppers left behind by the bankruptcy and liquidations of Toys 'R' Us and the Bon-Ton Group, including Herberger's."

As with any storewide sale, there are exclusions on high-profile, in-demand items from brands like Apple and Vitamix. For a complete list of exclusions, check the weekly ad or ask in store.

In the past, Target has been criticized for its clunky, time-consuming Cartwheel program. Despite improvements, for this week's sale, shoppers must have their Redcard linked to the Target app to access the 10 percent coupon. It can be found in the app by going to "wallet," then "coupon" and "thank you."

John Ewoldt • 612-673-7633