Many of us have that person in life with whom we’re just naturally competitive. Maybe it’s our sibling who’s close in age, or a childhood friend who’s actually more of a frenemy.
In the world of retail, there are perhaps no two companies that compete more than Walmart and Target.
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Both companies are known for their gigantic stores, vast array of products, and attractive prices. And if there’s one area within the retail space that both companies are trying to win at, it’s fashion and apparel.
Clothing is one of those things that people will purchase in the best and worst of economic times.
In fact, in 2020, Target enjoyed $15 billion of sales growth at a time when people were worried about the economy and weren’t leaving their houses. And much of that growth came from apparel sales.
But in the past few years, Target’s growth has been slowing. And part of the reason may be that Walmart is doing a better job of capturing fashion-minded consumers.
Inage source: Getty Images
Walmart ups its fashion game with smart partnerships and help from AI
For a long time, Walmart was known more as a place to buy low-cost groceries and cleaning products – not necessarily a clothing destination. But in recent years, Walmart has been investing heavily in fashion. And its efforts are paying off.
In 2024, Walmart re-launched its No Boundaries brand, which features modern apparel for young adults.
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More recently, Walmart introduced its Weekend Academy brand for tweens. Not only does it feature hip items, but, like the No Boundaries line, almost all pieces are priced under $15. And many items are priced under $10.
But it’s not just that Walmart has been making a strong effort to produce clothing items that are budget-friendly. Nowadays, to Walmart, being trendy is just as important as being affordable.
Case in point: In 2021, the company brought in fashion designer Brandon Maxwell to elevate its fashion brands. Walmart has since enjoyed huge success with its Free Assembly line.
Plus, Walmart has made a huge investment in AI to elevate its fashion game.
In the fashion industry, it usually takes about six months to design and produce a clothing line. Walmart’s new Trend-to-Product tool allows the company to take apparel from the design phase to the on-shelves stage in only six to eight weeks.
Target is falling behind Walmart on fashion
Target has tried to carve out a name for itself as a fashion destination. And for many years, it had the reputation of being the more hip retailer compared to Walmart.
But in recent years, Target has had a few missteps.
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For one thing, it seems like Target has gone all-in on beauty while forgetting about apparel. While the company recently expanded its lineup of affordable makeup products, it hasn’t put nearly the same effort into its clothing and footwear.
Furthermore, the one clothing area Target has aimed to focus on is activewear. But the company may have gone overboard.
Target recently launched a host of new products under the Blogilates for Target activewear line. But many of those offerings are not so competitively priced. And it seems counterintuitive for Target to compete with its more well-known All in Motion brand.
Further, while Target has maintained a nice range of inventory for its Cat & Jack kids’ clothing line, some consumers would argue that it’s not budget-friendly barring an actual sale.
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All told, Walmart seems to be doing a better job than Target of expanding its clothing offerings strategically while maintaining attractive price points. If it continues on that path, it could continue to take business away from Target at a time when the company really needs a lifeline.
Maurie Backman owns shares of Target.
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