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For even the most well-positioned retailer, this holiday season is shaping up to be complex.<\/p>\n
The Q4 period is always the most important time for the industry and this year has brought its own unique macroeconomic challenges. Increasing costs from tariffs and mixed consumer sentiment are posing a challenge to seasonal festivities.<\/p>\n
\u201cThis season, consumers are value-driven but emotionally fatigued,\u201d Katherine Black, a partner at Kearney leading food, drug and mass market retail, told Retail Dive. \u201cForty percent say they\u2019re switching the retailers they shop, double the rate we saw in May. That signals both volatility and opportunity. Shoppers will gravitate toward big sales, loyalty stacking, and cross-channel convenience.\u201d<\/p>\n
Many consumers are extra value-conscious this season, with some potentially pulling back on holiday spending budgets. A growing reliance on higher-income shoppers is even keeping some retail executives up at night.<\/p>\n
This all comes at an especially pivotal moment for Target.<\/p>\n
The company came into 2025 dealing with a mix of consumer backlash and declining sales, a pattern that\u2019s persisted over the course of the year. Incoming CEO Michael Fiddelke has a plan to address those issues, which relies on regaining merchandising authority through newness and making consistent, reliable shopping experiences.<\/p>\n
Can the company achieve that this holiday season?<\/p>\n
Holiday newness<\/h3>\n
Major changes, including a dedicated turnaround strategy, are underway to help Target return to growth.<\/p>\n
One of those changes was the news in August that Fiddelke would take over the CEO role\u00a0next year, though his presence has already become much more prominent as Brian Cornell transitions out of the position.<\/p>\n
Fiddelke gave a look into his turnaround priorities during an August call with analysts, highlighting the importance of fresh product.<\/p>\n
\u201cTarget\u2019s obviously had some challenges in the last couple of years,\u201d UBS analyst Michael Lasser told Retail Dive. \u201cThe key will be, is it able to show improved performance this holiday season, which may give the market a bit more confidence that the worst is behind.\u201d<\/p>\n
Over the past few months, the mass retailer has unveiled a series of holiday-related announcements aimed at achieving Fiddelke\u2019s goals \u2014 specifically around newness, consistency and accessibility.<\/p>\n
Target in September kicked off the season, announcing 20,000 new products \u2014 double the amount in 2024 \u2014 with half of them being exclusive to the company.<\/p>\n
The retailer also announced the expansion of its next-day delivery service to the 35 top metro areas in the U.S. by the end of October. And while Target didn\u2019t provide a specific number for new seasonal hires, the retailer stressed the value of its team and the existing \u201cflexible\u201d on-demand workforce that can pick up shifts as needed.<\/p>\n
Recent exclusive merchandising moves have included a Stranger Things campaign, a collaboration with Woolrich and a collection with Champion.<\/p>\n
For Target to win back shoppers, Kearney\u2019s Black believes it needs to return to its roots of making a premium lifestyle accessible and the store experience inspiring.<\/p>\n
\u201cThe company has announced that half of their holiday assortment is exclusive product, but the strategy around that feels mixed,\u201d Black told Retail Dive. \u201cIn many cases, they are leaning into pop culture releases, which will likely perform well in the short-term, but do not reinforce long-term brand distinction.\u201d<\/p>\n
Expanded delivery services are valuable, but Target should remain focused on creating a frictionless in-store experience and capitalize on the Target Circle 360 paid membership ecosystem, Black added.<\/p>\n
But it\u2019s early in terms of holiday, and whether the company\u2019s execution is successful remains to be seen, Lasser noted.<\/p>\n
The company\u2019s pricing position is likely to be a key differentiating factor for shoppers, one way or another.<\/p>\n
Is value a vibe?<\/h3>\n
Attracting price-conscious shoppers may be important, but Target\u2019s positioning in some categories means it doesn’t have to be the cheapest.<\/p>\n\n\u201cWalmart tends to be the price setter in many, many categories,\u201d Lasser said. \u201cSo [Target\u2019s] historically been 2% to 4% above Walmart on a like-for-like basket of items. It’s been successful when it’s been at that level. So being in that range would be important this year.\u201d<\/p>\n
This can especially be true with key categories like beauty and apparel, Lasser added, noting that those are areas where Target tries to differentiate itself.\u00a0<\/p>\n
In its September holiday merchandising announcement, the retailer leaned into marketing its value. The company used the word \u201caffordable\u201d four times in that release. Target said thousands of its holiday-related gifts start at $5, and most items are priced under $20.<\/p>\n
It also highlighted pricing for specific products, such as $6 exclusive lip charms and men\u2019s personal care gift sets for $20.<\/p>\n
Company executives have also stressed the importance of value this season, with Target Vice President of Experiential Store Operations Michael Scrafford telling Retail Dive during a live event that value is critical to the consumer.<\/p>\n
\u201cIt\u2019s always important during the holiday season. It’s going to be of paramount importance this year,\u201d Scrafford said, adding that value can show up for the consumer in many ways. \u201cIt\u2019s about the digital experience making it easy to find a great deal. It’s about in-store navigation that helps the guests find what he or she is looking for, but also maybe a surprise-and-delight deal here or there.\u201d<\/p>\n
While value can sometimes be directly about price, Scrafford said it is often about what it feels like to get a great deal as a consumer.<\/p>\n
That feeling consumers have when shopping, even with economic pressures, is certainly a vital aspect this season, Black told Retail Dive.<\/p>\n\n\u201cConsumers want to feel that they\u2019re living an elevated lifestyle even as budgets tighten,\u201d Black said. \u201cIn Kearney\u2019s research, 57% of shoppers said they want to feel like savvy consumers and in many cases, that feeling matters more than the dollars saved. That \u2018smart-style\u2019 confidence is what Target delivered in its heyday.\u201d<\/p>\n
Can Target achieve that under Fiddelke\u2019s direction this holiday?<\/p>\n
The executive certainly feels confident.<\/p>\n
\u201cQ4 is the perfect time to begin writing this new chapter for Target,\u201d Fiddelke said in a LinkedIn post. \u201cAnd to anyone who doubts what this team can do, I say: Watch us.\u201d<\/p>\n<\/p><\/div>\n
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