Target has enlisted Shopify to bring new and more fashionable brands to its online platform. Beginning Monday, the Minneapolis-based retailer announced that Shopify merchants can apply to join Target Plus, its third-party marketplace. Many of Shopify’s clients are emerging brands that utilize its e-commerce platform for their websites.
Financial details and the duration of the partnership between Target and Shopify were not disclosed. According to Cara Sylvester, Target’s Chief Guest Experience Officer, Shopify will assist the retailer in identifying popular products swiftly, making them available to Target’s online customers. Sylvester mentioned that Target intends to stock some of the popular items found through Shopify in its physical stores as well.
Target views its marketplace as enhancing its overall business, creating a positive impact. Sylvester highlighted that expanding the online assortment with appealing merchandise tends to attract more frequent visits to Target’s website, resulting in purchases from both marketplace sellers and Target’s own brands.
Target has been striving to revive its sales growth amid reduced consumer spending on discretionary items, trailing behind grocery competitors like Walmart. The retailer has experienced four consecutive quarters of declining comparable sales, with overall sales decreasing in three of the past four quarters. Its digital sales grew by 1.4% in the first quarter after more than a year of stagnation.
Target anticipates returning to sales growth in the second quarter, albeit from a weak performance last year. For the full year, the retailer forecasts comparable sales to remain flat to up 2%, with adjusted earnings per share ranging from $8.60 to $9.60.
Target Plus, however, remains a small fraction compared to other third-party marketplaces like Amazon and Walmart. Target operates the platform with over 1,200 sellers, while Amazon boasts about 2 million and Walmart approximately 135,000 sellers, according to Marketplace Pulse estimates.
Target’s marketplace showcases a wide array of products across categories such as apparel, sporting goods, and home decor. The retailer reported significant growth in its seller and product count over the past year, although it does not disclose separate revenue figures for the marketplace.
Despite its size, Target Plus is identified as one of the fastest-growing segments within Target’s business. The platform not only serves as a revenue stream but also integrates with Roundel, Target’s advertising arm, which saw over 20% growth in the recent quarter.
Third-party marketplaces have gained prominence in retail for their potential to drive higher profits, as retailers earn commissions on sales and offer additional services such as fulfillment and advertising. Target, unlike some competitors, does not provide fulfillment services, leaving sellers responsible for storing, packaging, and shipping their products.
With Walmart intensifying its marketplace efforts and other platforms like TikTok Shop and Temu gaining traction, the competition in the e-commerce marketplace sector is heating up.