Target is allowing certain third-party retailers to sell goods on its site on an invite-only basis through a program called Target +, according to CNBC. Participating merchants will be responsible for their own shipping and other costs under the new initiative.
The retailer will prioritize companies in categories where it has already seen high demand on target.com, such as sporting goods, toys, home goods, electronics, musical instruments and outdoor gear. Target already is in contact with retailers and brands operating in some of these areas, including Mizuno, Kaplan and Casio.
Shoppers who purchase through Target + will still receive the standard 5% discount for using a Target credit card, along with the associated free shipping. Additionally, Target will accept returns of items purchased through the program at its stores.
“We see this as a long-term opportunity to drive profitable growth,” said Rick Gomez, CMO and CDO at Target in an interview with CNBC. “This is intended to be a very curated and select group of products and brands. We are reaching out to the brands we want.”
Target’s approach differs from rival Walmart, which has been working to open up its site as an “online mall” for others companies. Retailers with their own web sites on walmart.com include third party brands such as Lord & Taylor and Walmart-owned companies such as Moosejaw.
Walmart has faced some challenges in the process: five outdoor brands pulled their products from Moosejaw’s site, for reasons including that it looked too much like walmart.com, and pressure from specialty retail partners, according to Outside. However, the results have been positive overall, and Walmart reported 43% e-Commerce growth in Q4 2018.
Target’s own Q4 2018 earnings will be under scrutiny when they are released on March 5, as the company reported a 29% jump in e-Commerce sales during the holidays. This significantly outpaced the retailer’s overall holiday sales, which grew a comparatively modest 5.7%.