Target Takes on Drizly
Target has had an incredible year. The pandemic ended up becoming a huge accelerant for a retailer already doing pretty well in 2019. This week, though, it decided to take on a curious foe: Drizly.
You may have forgotten all about the new up-front alcohol sections in about 600 of Target’s locations. This is probably the one department where premium offerings are abundant and not hidden from view. These booze stores-within-a-store have been quietly driving a lot of the growth in Target’s food and beverage sales, according to their grocery executive Rick Gomez in a recent press interview.
If Target wants to expand market share with younger folks, then a hip mix of alcohol offerings is probably the most brilliant possible way to premiumize the Target halo. In fact, over time, it might just change perceptions of Target as a mass-market grocer.
Remember that beer and wine are categories where Americans went ‘premium’ in the 1970s and 1980s. Beer, cheese, ice cream, and chocolate were the earliest categories to develop mass-distributed premium offerings at 100-200% of the commodity brands’ unit prices.
The key is to have the kind of alcohol mix you find at your local Kroger chain. Target is part of the way there, but not entirely. They focus on foregrounding too many Budweiser, Miller, Diageo, and Constellation brands. And they will need to feature intriguing new segments and Skate Ramp brands to really up the hip factor.
Suppose Target can become an easy source of emerging alcohol and zero-alcohol offerings. In that case, I’m guessing it may cause those shoppers at least to hunt more for premium offerings they buy elsewhere but don’t associate with Target yet.