Target’s Push for More Men Now Includes Beard Oils, Tattoo Salve

(Bloomberg) -- Target Corp., known for its appeal to moms and kids, wants to get more guys through the door -- and it’s betting that juniper and sandalwood-infused lotions will help.

The cheap-chic retailer is taking its Goodfellow & Co apparel brand into the $9 billion U.S. men’s grooming market on May 19 with more than 30 products. The items include face scrubs, beard oil and even tattoo salve, all priced under $17. Target aims to broaden Goodfellow’s reach and boost its sales, which grew more than 10% last year while the overall U.S. men’s apparel sector declined, according to data tracker NPD Group.

The move also illustrates Target’s desire to get more out of its growing stable of private labels, which deliver fatter profit margins than national brands and help set it apart from rivals Walmart Inc. and Amazon.com Inc.

Last year, Target derived a third of its sales from lines like Cat & Jack, A New Day and JoyLab, a level that’s below rival Kohl’s Corp. Boosting that penetration would help profitability but could also increase the company’s exposure to Chinese tariffs as most of the production happens there, according to Sanford Bernstein & Co. analyst Brandon Fletcher.

‘Brand Stretch’

“It’s about brand stretch,” said Aimee Becker, senior vice president at private-brand consultants Daymon. Referring to men’s grooming products, she said Target knows “the category is growing, and they don’t play in it today. So it’s a low-risk opportunity.”

Brand extensions are common in the consumer-products world, like ketchup king Kraft Heinz’s foray into mayonnaise, Starbucks’s coffee maker or Duracell developing a charging mat. But not all succeed: Witness Colgate’s ill-fated frozen dinners, Bic underwear or Dr Pepper marinade. Retailers typically introduce store brands to capture a specific category or a price point, and don’t see the need to expand on them.

“It’s a path that we haven’t seen many retailers take,” Becker said.

That mentality is changing, though, as successful store brands like those from Target, Best Buy Co. and Costco Wholesale Corp. begin to resemble bona fide brands rather than just cheaper knockoffs. According to Daymon, 85% of shoppers trust private brands just as much as national ones, and more than half of shoppers go to a store specifically for its exclusive labels.

Target wants men to walk through its doors with Goodfellow in mind, so it’s giving them more reasons to buy the brand, which debuted in 2017. To develop the products, its research team nosed around shoppers’ own bathrooms to find out what they use, while chemists concocted formulas that work “like it needs to for a man,” according to Julie Guggemos, the senior vice president of product design who oversees Target’s in-house brands.

Price Advantage

The Goodfellow grooming items will cost about 20% less than more premium toiletry brands Target already carries such as Bulldog, Oars + Alps and Duke Cannon. Those existing lines grew 40% last year at Target, but men tend to stick with the personal-care brands that work for them, according to researcher Mintel, so Goodfellow will have to convince them to switch. Just getting them in the door can be a challenge: Men shopping alone visit Target less often than they do Walmart, Costco or Kroger Co., according to retail consultancy Numerator.

Target will also find that growth is harder to come by as the category matures. Annual growth rates will drop almost in half over the next five years, according to researcher Euromonitor International. Even if the category slows down, Target’s Chief Merchandising Officer Mark Tritton still backs the strategy.

“Besides electronics, we didn’t have anything for men,” he said in an interview in New York. “Now he can shop grooming, he can shop apparel, and he can build his own basket.”

©2019 Bloomberg L.P.