On Sunday, Target made a pretty big announcement: It's partnering with Disney to create a unique shopping experience for fans of both brands.

The announcement included the following details:

  • Target will open 25 Disney "stores within a store" in October, with 40 more planned to open by next year;
  • A new Target store will open near the Walt Disney World Resort in Orlando in 2021; and
  • Target has also launched a Disney-themed section on its website, which features products from Pixar, Marvel, and Star Wars brands.

The Disney stores within Target will span an average of 750 square feet, according to CNBC. They'll be strategically located, next to--you guessed it--the kids' clothing and toy aisles. And they'll be staffed by Target employees who will receive special training in connection with the Disney brand.

Imagine these shops as a mini-version of the Disney stores you see in major cities (like New York and Paris), except accessible to many, many more people.

This is a brilliant partnership, on many levels--and has the potential to shape the future of retail.

Here's why.

Brand power (times two).

If you think people who own Disney products or who visit Disney theme parks are likely to shop at Target (and vice versa), you'd be absolutely right. According to CNBC, Bob Chapek, chairman of Disney Parks, experiences and products, "said there's about a 90 percent overlap between the two company's customers."

And in the same vein, Target CEO Brian Cornell called Disney "among our largest and most admired [brand] relationships."

By partnering together, Target and Disney strengthen this connection between the two brands in the minds of consumers. 

The result? 

When families with small children shop at Target, a look through the Disney store is almost automatic. And when those same families forget basic items they need while visiting Disney theme parks, they'll look for the store they're familiar with--and just happens to be around the corner: Target.

Sounds like a win-win for both companies.

Leveraging strengths.

Years ago, Disney discovered the perils of retail the hard way.

Years of investment into retail led to the brand opening a peak of 749 Disney stores worldwide, back in 1997. But a declining economy hit those stores hard, leading the company to close hundreds of stores and sell others. (Today, Disney owns about 300 stores globally.)

Enter Target, a company that has not only survived the retail apocalypse, but is currently thriving. Its recent quarterly earnings report showed continued growth and great momentum, leading shares to jump to a record high. (Target shares are up more than 55 percent this year alone.)

By making a deal with Target, Disney gets to use Target's established infrastructure to sell its stuff. In other words, Disney leaves the heavy lifting of retail to the expert, while retaining a good amount of creative and branding control--areas in which the company has excelled.

"Our teams worked closely with Disney to co-develop and design the store experience with features like music, interactive displays, photo ops and a seating area where families can watch Disney movie clips," Target said in a statement.

Of course, the Disney-Target partnership is just the latest example of the store-within-a-store model, which seems to be quickly taking root. 

For example, Best Buy made deals with Apple and Samsung to feature the tech companies' products in branded areas of Best Buy's stores. And Kohl's sublets space to partner businesses like Aldi and Planet Fitness. 

Even Target already operates a similar model with CVS. (CVS acquired Target's pharmacies back in 2015, continuing to run those sections of Target separately.)

Which is why all eyes are on this partnership.

Because if sales meet or exceed expectations, Target's leverage for working with other powerful brands will only increase.

And that could mean very interesting things--not just for Target, but for the future of retail. 

Correction: An earlier version of this column misstated the name of the chairman of Disney Parks, experiences and products. His name is Bob Chapek.

Published on: Aug 28, 2019
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