Price-matching, online deals among Target's plans to lure holiday shoppers

The holiday season is expected to be sluggish, but Target Corp. is ready to entice tightfisted shoppers with price-matching, daily online deals, discounts via mobile apps and in-store pickup of many online purchases.

The incentives come as retailers will have six fewer shopping days this holiday season. Target is already trying to get ahead, rolling out its holiday promotions on Nov. 1, a little earlier than usual.

Overall, experts expect a fairly anemic season. ShopperTrak recently predicted retail sales in November and December to rise by only 2.4 percent year over year, compared with a 3 percent increase in 2012. The survey was released in mid-September, before the government shutdown, which has further dampened consumer demand.

"It's going to be a challenging year for all retailers," said Dave Brennan, marketing professor and co-director of the Institute for Retailing Excellence at the University of St. Thomas. "With the rolling uncertainty of a February shutdown, we expect a lot more promotions."

Shoppers are very budget-focused, said Kathee Tesija, executive vice president of merchandising and supply chain at Target, in an interview this week. "They're consolidating and buying more in fewer trips," she said. "They're spending only on what they need, so we have to have the right products and merchandise assortment. In this tougher consumer climate, it's important to offer great products at great value."

Many retailers, including Macy's, Kohl's, J.C. Penney and Herberger's, are hoping to win over buyers by opening at 8 p.m. on Thanksgiving. Target has yet to announce its opening time on Thanksgiving; last year, its stores opened at 9 p.m.

Part of Target's value strategy will occur online. The retailer will offer several daily-deal discounts of 30 to 50 percent on gifts, toys, entertainment and electronics to its Cartwheel users. (Cartwheel is Target's mobile coupon app that has more than 2 million users.)

In stores, Target hopes to entice value shoppers by extending its price-match program. From Nov. 1 to Dec. 21, with the exception of Black Friday to Cyber Monday, Target will match prices from local competitors and select online retailers such as Amazon. What's different this year is that Target will extend its price-match policy during the entire period from Nov. 1 to Dec. 21, not just seven days, as long as the competitor's price is current.

Target can comfortably offer the extension because so few guests take advantage of it, said Brennan. "It's more public relations than anything, but a few customers ask for the match on more expensive items," he said.

Still, Target may need to fall back on the policy as a way to compete with Amazon. In a recent analysis of Target's and Amazon's prices by William Blair Equity Research in Chicago, Target's prices were 13.8 percent higher, or about $20 per item, on average.

Another service added in time for the holidays is e-pickup. Target is hoping to attract the time-crunched shopper by offering a "buy online, pick up in store" service. The program is already in place in half of its approximately 1,800 stores, including all Twin Cities locations. The retailer is hoping to catch up with Best Buy and Wal-Mart, which have offered the service for more than a year. Target began the beta test this summer, and will roll out the program to all stores by Nov. 1 with 35,000 items labeled online as "eligible for store pickup."

John Ewoldt • 612-673-7633 • jewoldt@startribune.com Janet Moore • 612-673-7752 • janet.moore@startribune.com