Who doesn’t want cheap toilet paper?
Target plans to launch a house brand, Smartly, for consumer staples priced mostly at $2 or less, the Wall Street Journal reported. Think dish soap, body lotion, paper towels, and, yes, toilet paper. Smartly products will go on sale in Target stores and online in mid-October.
To stand out in the Amazon era, Target has created 20 private brands over the last two years, the Journal reported, mostly in apparel and home goods. In consumer staples, Target already has its Up & Up line, but said Smartly will be up to 50% cheaper. Private-label brands generally tend to be more profitable for retailers.
“We differentiate Target by developing and curating new, innovative products and exciting new owned brands, which deliver an unbeatable combination of quality and price,” Target chief merchandising officer Mark Tritton said in May. More recently, Tritton said that “standout” growth in Target’s home goods category was benefitting from the company’s newest private-label brands.
Target isn’t the only retailer banking on private labels. Walmart bought small online brands like Modcloth and Bonobos, and launched four new clothing brands earlier this year. It also has private-label wine. Jet.com, the e-commerce startup Walmart purchased in August 2016, launched its own house brand, Uniquely J, one year ago in an effort to appeal to urban millennials.
Target’s Smartly line has a similar feel and pricing structure to Brandless, an e-commerce startup that launched in July 2017 as the “Procter and Gamble of millennials,” which sold everything at a flat price of $3. Smartly, like Brandless, is packaging goods with simple, minimalist labels that emphasize the product name and description (“paper towels,” “cleans up your messes”) over a brand name.
Meanwhile, Amazon’s own private-label business is growing rapidly, on pace to generate $7.5 billion in revenue in 2018, according to estimates from investment firm SunTrust Robinson Humphrey. Amazon is now inviting manufacturers to create products exclusively for its collection of private brands, threatening the third-party sellers that rely on its online marketplace.