When it comes to online shopping powerhouses, Target has been something of an also-ran compared to Amazon and Walmart. Now, the retailer is hoping to become a bigger player in the online marketplace—and it’s turning to Shopify as part of its plan.
Target and Shopify have struck a deal to boost the retailer’s third-party marketplace. Starting Monday, Shopify small businesses can apply to be a part of Target Plus, which could significantly expand the chain’s online product offerings.
What does this mean for Target and its shoppers? Here’s what you need to know.
What will the Target/Shopify partnership mean for shoppers?
Put simply: More items to choose from. Select Shopify merchants will list their products on Target’s website. The product line will vary, but don’t expect things like additional paper towel brands or a different sort of coffee maker. Target and Shopify say they plan to curate the offerings, hoping to promote things that are trending, which could spark additional consumer interest.
“Our partnership with Shopify extends the breadth of thoughtfully designed and affordable items available to discover and enjoy as part of Target’s distinctive mix of brands shoppers love,” said Cara Sylvester, executive vice president and chief guest experience officer at Target, in a statement.
How many Shopify vendors will begin selling products on Target.com?
That’s still unclear. It won’t include the entirety of Shopify stores, though. Target is looking to dramatically expand its offerings, but it says it plans to be selective. That makes sense, as more than 2 million merchants use Shopify to sell their goods. Many of those are also small businesses that simply could not keep up with the potential demand of Target shoppers or don’t have their inventory set up with things like UPC codes.
Will Target ship products from Shopify merchants if I buy it on Target.com?
No. Target does not plan to offer fulfillment services. The sellers will have to store, pack, and ship their own goods.
Will Shopify merchants’ products be in Target stores?
In some cases, yes! Target will be the first big-box retailer to bring merchandise from select sellers into its brick-and-mortar stores. The timing for that is still in flux, but the companies say they expect it to occur in the coming months and almost certainly before the holiday shopping season starts to get underway. Expect an emphasis on whatever’s up-and-coming on TikTok and other social media channels.
What is Target Plus?
Launched in 2019, Target Plus is the retailer’s third-party partner program for Target.com. It currently has more than 2 million products from such companies as Timberland, Crocs, and Maui Jim. All totaled, more than 1,200 partners are part of Target Plus. It’s currently an invitation-only marketplace, so it has a much smaller footprint than the third-party programs of its competitors. Marketplace Pulse, an e-commerce research tracker, estimates Amazon has roughly 2 million third-party sellers and Walmart has about 135,000 sellers.
Has Shopify done this sort of deal before?
Yes. In 2020, the company partnered with Walmart to expand that retailer’s online offerings. And last year, it struck a deal with Amazon that let Shopify merchants integrate Amazon’s “Buy with Prime” checkout function into their shops.
Why is Target partnering with Shopify?
Simply put, Target needs a boost in the online shopping space. Last year, Target earned about 80% of its $105.8 billion in sales from its brick-and-mortar locations, with the rest coming from online. Compare that to Amazon’s $574.8 billion, the vast majority of which came from online. Walmart, meanwhile, generated $100 billion in e-commerce sales in 2023.
Competition is also growing from smaller marketplaces, including Shein, Temu, and TikTok Shop. Target’s digital sales grew 1.4% in the first quarter of 2024, but that was the first time they’d shown gains in more than a year.
Working with third-party sellers can be profitable since a company like Target doesn’t have to buy or store inventory and isn’t as impacted if items need to be marked down.
Why is Shopify partnering with Target?
Shopify could use a boost as well. The online marketplace was named one of Fast Company‘s Most Innovative Companies of 2024 for its approach to work and has been shaking off its post-pandemic slump. But just last month, it saw its share price fall 20% in a day after it reported a surprise first-quarter loss and warned that revenue growth could shrink this year.
A partnership with Target could help turn things around, though that’s hardly a guarantee. Target shares were up about 3% in midday trading Monday, while Shopify was down 2%.