Holiday Shopping Wars: Target and Walmart Duke It Out
As the holiday season reaches its peak, major retailers Target and Walmart are going head-to-head in a battle for shoppers’ attention. With a focus on short-video app TikTok and streaming platforms, both companies are pouring more money into advertising to reach their target audiences.
Target’s Uphill Battle
Despite its efforts, Target is struggling to regain its footing. With over 1,950 stores across the US and a range of mostly non-essential merchandise, the Minneapolis-based chain has lost market share due to waning sales. Its shares have fallen 7% this year, a stark contrast to Walmart’s 72% gain.
A Late Surge in Advertising
In an attempt to turn things around, Target has increased its online advertising spending by 8% from October to mid-December, with a significant 70% boost on TikTok to reach younger shoppers. However, Walmart has outdone its rival, increasing its online advertising outlays by 30% during the same period, with a whopping 200% increase in spending on TikTok.
A Modest Bump in Sales
Recent credit- and debit-card data suggest that Target’s shoppers have only modestly increased their spending in early December, with a 5.5% gain compared to the same period last year. While this is a small victory, investors remain skeptical about the company’s ability to reverse its downward trend.
A Shift in Strategy Needed
To truly compete with Walmart and Costco, Target needs to rethink its pricing strategy and lower its prices to appeal to price-sensitive consumers. As one analyst put it, “Management’s imperative is to win back the moms” who are typically the company’s core customers.
A Last-Minute Push
In a last-ditch effort to drive sales, Target has launched a digital advertising campaign, urging shoppers to “Hurry! Before last-minute deals are over.” The retailer is offering up to 50% discounts on toys and video games and up to 40% off kitchen appliances. However, with visits down 6.8% in the week following Cyber Monday, it remains to be seen whether this push will be enough to turn things around.
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