Target's new baby section takes aim at specialty shops' service
By Jessica Wohl
(Reuters) - Target Corp is testing a baby section with trained staff at 10 Illinois stores in a push to gain a bigger share of the shrinking but highly competitive market for baby gear.
The U.S. birthrate has declined in recent years, intensifying competition among mass merchants such as Target, specialty shops led by Toys R Us Inc's Babies R Us and Bed Bath & Beyond Inc's buybuy BABY, and websites including Amazon.com Inc and its diapers.com site.
For Target, trying to do a better job satisfying new parents could lead to higher sales over time. Households with children spend about 20 percent more each year at Target than patrons without children, said Trish Adams, Target's senior vice president of merchandising.
"We kind of are a store for families, and particularly young families, and we just think there is further opportunity to capture a larger share of their wallet," she said.
The Target test stores feature the same products, but the redesigned baby areas will operate a bit more like specialty shops, with trained staff members assisting shoppers. Other changes could come as Target does more research, Adams said.
One reason for the stiff competition is that the U.S. birthrate has declined. There were 63.2 births per 1,000 women in 2012, in line with 2011 and down from 69.3 births per 1,000 women in 2007, according to Centers for Disease Control. The decline in fertility that began in 2008 is closely linked to the weakened economy, the Pew Research Center said in 2011.
Still, people do not tend to trade down when buying for babies, and the rise of dual-income households and having children later in life means that parents have more disposable income for those purchases, said Pat Conroy, vice chairman and head of the consumer products group at consulting firm Deloitte.
Companies have brought out everything from designer diapers and easier-to-feed foods to sportier strollers and baby monitors with color video screens as they try to push parents to spend more. Continued...