Feb 26, 2021
Apple and Target Just Announced What Might Be the Most Brilliant Brand Partnership Ever. It’s Bad News for Best Buy
By Jason Aten, Inc.
It’s not about selling electronic devices.
On the surface, Apple and Target look quite different. One is the most valuable company on earth and makes some of the world’s most iconic products. The other is the eighth-largest retailer and is known for trendy house brands, selling everything from paper towels to home decor to childrens’ clothing to electronics.
Except, when you look a little closer, Apple and Target actually have a lot in common. Both are brands known for their highly loyal customers, and both have a “cool” factor that makes them the envy of their retail competitors.
It’s also worth noting that both became destination shopping experiences under the leadership of the same retail guru, Ron Johnson, who was the head of merchandising at Target before launching Apple’s iconic retail stores.
That’s one of the reasons I think the announcement on Thursday that the two companies are partnering to open what they are describing as an “elevated Apple shopping experience” in 17 of Target’s stores is so interesting. The retailer will create a dedicated space to highlight iPhones, iPads, Apple Watches, AirPods, HomePods, and Apple TVs, it said in a blog post.
This isn’t the first time Target has launched brand-specific shopping areas within its stores. Previously, the retailer dedicated space to miniature Disney Stores. It’s not the first time for Apple either. The iPhone maker already has its own retail experience within Best Buy stores. In fact, it’s for Best Buy that this might be the worst news.
Before we get to that, it’s worth unpacking why this is such a smart partnership. Here’s the thing–Apple isn’t an electronics company as much as it is a lifestyle company. I know that sounds like a clich, but it’s true. Apple isn’t selling iPhones and iPads, it sells an experience. Sure, it’s possible because the company is pretty good at making technology, but that isn’t what Apple is really selling.
The primary thing Apple sells is the way your iPhone, and your HomePod, and your Mac all just work–and work together. That’s why people pay a premium for the company’s products and services. Even though the things it makes have plenty of competitors, almost none of them come close to matching the overall experience.
Target is essentially the same. There are less expensive places to get paper towels–including Target’s largest competitors, Walmart and Amazon.com. Both of those retailers also offer a lot more product options, but no one gets excited about going to Walmart like they do Target.
I wrote back before we all started staying at home that in our home, a trip to Target is a perfectly acceptable date night. You know, back when people used to have date nights.
The point, though, is it’s a place people like to shop. In that sense, there’s a lot of overlap in the type of customers both companies are trying to attract.
That brings us back to Best Buy.
Best Buy is the logical place to go if you’re looking for a computer or smartphone or any of the other devices it sells, like televisions or refrigerators. But, remember, Apple isn’t just trying to sell computers or smartphones.
That’s why it went through the trouble of building its own retail locations in the first place. It wants the experience of shopping for an iPhone to be as much like using an iPhone as possible. But there are only so many Apple Stores, compared with the 1,800 Target locations across the U.S. This partnership allows Apple to expand that experience to a lot more people who might never walk into an Apple Store or a Best Buy.
Finally, it’s worth mentioning that the products Apple plans to sell in its Target locations make up almost 80 percent of Apple’s revenue in the most recent quarter. And every one of them is a lifestyle product.
People who shop in an electronics store are looking to buy electronics. People who shop at Target are looking to buy a lifestyle. Those are the people Apple wants to reach.