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After persuading DTC skincare, pet supply, and shave brands to move offline, Target’s convincing DTC apparel brands to join its ranks. But there’s more to it than a site-to-shelf transition.
Check the tags: Hatch and Lively joined Target’s roster via diffusion collections. That’s linesheet speak for an affordable spinoff of a larger brand.
- Hatch’s upscale maternity clothing can cost up to $400/item on its direct channel. Its Targetified pieces, a line called “The Nines by Hatch,” never pass $40.
- The price gap between intimates line Lively and its diffusion line, All.You.Lively, is significantly narrower: OG products retail for $35, while diffusion items cost $25.
The rationale: Target already has ten billion-dollar brands, plus annual designer collabs. But Target EVP and Chief Merchandising Officer Jill Sando told Retail Brew that its new diffusion lines...
- “Give our guests convenient access to innovative products as part of their regular Target run.”
- “Provide DTC brands with an opportunity to get their product into the hands of more consumers who otherwise might not have heard of a brand, and also gain the benefits of Target’s suite of fulfillment options.”
Target’s saving, too. Through a diffusion line, it can “bring different assortments in and out as consumer tastes change without needing to invent new brands itself,” Lauren Bitar, head of retail consulting at RetailNext, told us.
Journey to the center of America
From the DTC POV, adapting core products for Target can expand brands’ reach beyond their typically urban and coastal clientele.
- Michelle Cordeiro Grant, founder and CEO of Lively, told Retail Brew that its diffusion collection came from five years of community feedback—and was “the most accessible way possible” to meet potential shoppers where they are.
- Hatch founder and CEO Ariane Goldman said Hatch's diffusion line reaches “both our core customer and the woman who craves style conscious maternity options at a more accessible price point.”
Diffusing vs. diluting? Dampening brand value isn’t a risk for these DTC brands, yet. “Target is in a unique position in that it is seen as a discounter with cachet,” Bitar told us. And in a national retailer, “the DTC brand can also experiment with other price points, looks, and ideas it might not want to risk damaging its flagship brand's reputation over,” she said.
Looking ahead...Sando said Target’s diffusion lines aren’t limited-time engagements like its annual designer collaborations. And Target could soon allocate more hangers to DTC offshoots.
“Our goal with digital-first collections is to continue increasing differentiation in our product assortment,” Sando told us, “and DTC brands will continue to play an important role in our assortment, including apparel.”