Photo: Juleskills via flickr
Although its latest Missoni diffusion line proved to be a hit for Target, it’s also somewhat of a black eye. Because of the incredible demand on the day of the launch, Target’s website crashed, and across the country customers’ orders have been canceled or delayed. Some angry shoppers have even vowed never to shop at Target again. It’s proof that the retailer should not continue to put so much emphasis onto its diffusion lines. Customers now have a number of other places to go for imitation designer clothes — H&M, Topshop, Kohl’s, JCPenney, among other stores. Furthermore, Target is losing customers to its biggest rival, Wal-Mart, reports Businessweek:
According to conventional wisdom on Wall Street, Target shoppers who traded down to Wal-Mart during the recession would rush back to Target once the economy began growing again. Thus far, it hasn’t happened, which helps explain why Target’s shares are underperforming two-thirds of the 95 companies in the Standard & Poor’s 500 Retailing Index.
While the company is now adding more groceries to its product lineup, it’s is not enough to differentiate the retailer.
“Competitors have learned from Target,” retail consultant Carol Spieckerman told Businessweek. “Now, it needs something new.”
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