Some companies knock-off products. Target imitates entire brands

When Americans went into lockdown last year and began shedding their tailored clothes for sweatpants and leggings, Target was ready. In January 2020, it had debuted its newest in-house brand, an activewear label for women, men, and kids called All in Motion. The pieces, most affordably priced at under $30 an item, were on-trend and made from the latest technical fabrics. During the pandemic, sales of All in Motion exploded. The brand generated $1 billion in revenue for Target in its first year—an extraordinary achievement considering that high-profile activewear startups like Outdoor Voices and Tracksmith have yet to see a fraction of that success.

All in Motion’s aesthetic, however, wasn’t all that new. The product assortment and silhouettes were likely familiar to devoted Target shoppers, who may have purchased items from Champion’s C9 line, an affordably priced activewear brand that had been sold exclusively through Target for more than 15 years until it was dropped by the retailer at the end of 2019. Both lines offered a version of boys’ track pants, for example, with colorful panels along the seams; both offered girls’ leggings in bold graphic patterns. And their prices were nearly identical. (Target says that its designs for All in Motion are original, and that any similarities reflect basic market trends.)

Champion had designed and produced its C9 athletic wear for Target under a long-standing licensing deal that, in 2018, raked in $380 million for Champion’s parent company, Hanesbrands. When Hanesbrands announced, in August 2018, that Target wouldn’t be renewing its C9 contract when it expired at the end of 2019, analysts used the next earnings call to grill then-CEO Gerald W. Evans Jr. about what the company would do now with C9 and how it could ensure a “competitive moat” around the brand, should Target decide to create a similar line. Hanesbrands, which declined to comment for this story, had little leverage and a lot at stake: In 2018, Target accounted for 11% of its $6.4 billion in sales across its many brands, which include Hanes, WonderBra, and Maidenform.

Target, for its part, seemed to see the C9 contract’s expiration as a chance to do what it increasingly does best: develop and launch a stylish brand internally—and keep all the revenue for itself. Since Target CEO Brian Cornell announced a plan to double down on the company’s portfolio of private-­label brands in 2017, the retailer has been recapturing the design halo that it developed back in the aughts through savvy collaborations with the likes of Michael Graves and Isaac Mizrahi. The in-house brand strategy, which has Target’s own designers incubating new product lines from the company’s design lab in its Minneapolis headquarters, has been an unmitigated success. Though the company declines to share how many people are on its design team, their facilities include a 3D lab for prototyping, a lab for chemists and materials scientists to test new products in, a painting studio where prints and patterns are created, and a sensory-testing facility to accommodate Target’s emphasis on inclusive design.

Target now has more than 45 owned labels across fashion, home, beauty, and more. Ten of them generate upwards of $1 billion annually, and four earn more than $2 billion, including kids’ label Cat & Jack and home-decor brand Threshold. “We have been building our design, sourcing, and brand-management capability for years, and now I would describe it as industry leading,” says Jill Sando, Target’s chief merchandising officer, who oversaw the launch of All in Motion. “It’s a critical piece of our strategy.”

[Illustration: Mike Schnaidt]

Private labels aren’t the only factor driving Target’s sales, which have shot up by nearly 30% since 2017, reaching $94 billion last year. The retail giant also cultivates an atmosphere of discovery in its stores and online by showcasing up-and-coming brands, especially from direct-to-­consumer startups. The retailer has become something of the go-to partner for online-only brands making their first foray into brick-and-mortar retail­—from Casper mattresses to Quip toothbrushes. Since 2016, 22 direct-to-­consumer brands have chosen Target as their launchpad. “It’s really about the mix,” Sando says, “creating something distinct, only available at Target, that delivers on our guests’ needs and wants.” This approach keeps customers coming back and leads to what’s known as the “Target Effect,” the phenomenon whereby you step into a Target store to pick up a few items but leave with an enormous haul of products you never knew you needed. Other mass retailers appeal to customers on price alone; Target pulls in shoppers who value good design.

But as Champion well knows, Target can be both partner and potential competitor to outside brands. “If Target wants to raise awareness about its prowess in a new category, partnering with an established brand like Champion, with a built-in audience, is a good way to do it,” says Lauren Bitar, head of insights at analytics firm RetailNext. “Once they train consumers to see Target as a resource for activewear, they can suddenly start selling their own products that look very similar.”

Target is far from alone in analyzing and recreating market trends. “Imitation has been happening for decades in the retail industry, sometimes by design, sometimes by accidental influence,” says Marshal Cohen, chief industry analyst for retail at market research firm NPD Group. “Private label was built on identifying what really works and figuring out how to make it for less.”

Thanks to global supply chains that are capable of quickly churning out new products, fast-fashion brands like H&M and Zara have built their business on shamelessly copying runway designers. Big-box retailers, such as Walmart and Wayfair, have invested heavily in private-­label brands that take their cues from other designers. Amazon has become a knockoff behemoth, unabashedly mining its data to identify top-­selling products and duplicating them through private labels. And then there are the innumerable ways that smaller brands knock off—or pay homage to—one another, egged on by influencer culture. Remember when the smocked Nap Dress was a Hill House special, or when Outdoor Voices had a lock on color-blocked leggings? How about when mid-century modern furniture was being produced by the likes of Ray and Charles Eames rather than West Elm, Joybird, and Article?

But in the hall of mirrors that is the modern retail landscape, Target may have pulled off the most impressive trick yet: elevating its private-label brands to a lucrative—if imitative—art form. While other private labels merely recreate popular products, Target recreates brands, and makes them so desirable that they compete with some of the best on the market.

If imitation is the greatest form of flattery, Target appears enamored with today’s millennial-­oriented brands. There’s an entire genre of shoppable blog posts devoted to pointing out how Target has knocked off yet another higher-end competitor. “Universal Thread is basically Madewell on a budget,” The Everygirl declared in 2018 about Target’s denim and tees line. “Anthropologie dupes we’ve found in Target’s new Opal­house line,” is how Hunker described six boho-chic houseware items, from a rattan chair to a macramé-­inspired hammock. “Prologue is Target’s interpretation of an easy but professional wardrobe. (Think the chic but weekend-­friendly pieces you’d find at Theory or COS),” Glamour observed in 2018. “Is Target’s new luggage brand Open Story an Away killer?” read a 2020 headline on Travel Inspired for a post about the retailer’s affordable hardshell-suitcase collection. When Target launched Smartly, a line of household and personal-care basics with stripped-down branding and an average price of $2, in 2018, many outlets noted that it was taking the premise of Brandless, but undercutting that company’s famous $3 price point.

Target’s team of merchants, Sando explains, analyze search data, study trend reports, and carefully observe the market to pick up on the next big trend. “They know what our consumer is looking for,” she says. “They know what they are buying, but they also have the skill in predicting what is going to catch your attention and deliver on that discovery.” When it comes to developing its own brands, Target also surveys its customers for insights that are handed over to the in-house design team. This information, combined with Target’s design capabilities, allows the retailer to launch trendy brands that compete directly with others, but still feel fresh. (In response to this story, a Target spokesperson said the company is “committed to respecting the intellectual property rights of others and has the same expectations for our vendor partners.”)

When creating products, Target avoids bona fide infringement. Protections for design are limited, says Douglas Hand, a fashion lawyer who worked with designers, including Michael Costello and Phillip Lim, to negotiate contracts for their capsule collections with Target. “Copying trendy designs is Target’s business model—and it’s a viable business model,” says Hand. “Unless they are copying a very limited scope of protectable intellectual property—like a registered design patent or copyright—what they are doing is perfectly legal.”

There have been moments when Target has gone too far. Vans sued the retailer in 2018 for copying its “Old Skool” skat­­er shoe, and Burberry filed an $8 million trademark infringement lawsuit for a Target scarf that featured the brand’s iconic check pattern. (Bur­ber­ry agreed to drop the suit in 2018, while the Vans case was eventually dismissed.) Vans and Burberry, of course, have built up decades of brand recognition and equity around these designs. It’s much more difficult for smaller brands to make a case for trademark infringement.

Emily Golub, founder of a meal-kit company called Garnish & Gather, filed a lawsuit in 2019 against Target, claiming that the name, logo, and grocery basics sold in Target’s Good & Gather line were too similar to the business name she had trademarked in 2014. (She dropped the suit in March 2020.) But it’s remarkable how few lawsuits there have been—a sign, in part, of how common imitation is in retail.

This copycat economy, however, can be particularly harmful to smaller brands and startups that are investing in innovation. Direct-to-­consumer brands, for instance, sink money into product design, then pour even more into marketing to build an audience and cultivate brand loyalty. When a large retailer swoops in to copy their design, it can erode market share almost overnight. Joey Zwillinger, cofounder and co-CEO of the eco-friendly clothing brand Allbirds, knows this well. The brand’s signature, $95 all-wool shoes have not been copied by Target, but dozens of other retailers have ripped off the design since the company launched in 2016—most notably Amazon, which created a $45 version in 2019. According to third party research Zwillinger has reviewed, Allbirds is losing between $10 million and $15 million a month on sales to Amazon. “It’s very significant for us. There’s real damage when big retailers steal intellectual property from little brands, treating us like their R&D department,” he says about Amazon’s move. “The biggest challenge for DTC brands is creating awareness. The arbitrage these big retailers see is they get an enormous amount of traffic, so they can rip off smaller brands and in doing so, squash them.”

[Illustration: Mike Schnaidt]

Allbirds has pursued legal action in the past against copycats, such as Steve Madden, but Zwillinger says that lawsuits take a long time to resolve, and by then, the damage is done, which is why he decided not to sue Amazon. Hand believes that this is why most small players don’t bother going after big retailers. “The process of litigation is so achingly slow relative to the timing of the fashion cycle,” he says. “Target and other retailers recognize that time is on their side. You will have gone 20 seasons before you get any clarity into the status of your case, and by then, the design you’re arguing about is so far in the rearview mirror that it may seem moot. Most brands don’t have the war chest.”

At the same time, many direct-to-consumer brands are eager to be sold by big-box retailers and take advantage of their massive reach. And Target is often entrepreneurs’ first choice, thanks to its curated, design-forward in-store experience. Founders whose merchandise has landed a spot on the retailer’s shelves call it game changing. Katherine Power—the serial entrepreneur behind the Who What Wear media site and CEO of the special purpose acquisition company (SPAC) Powered Brands—has partnered with Target to cocreate the JoyLab athleisure line and exclusively sell the Who What Wear fashion brand. She also launched her skincare line Versed at Target. “There is a reason [Target] does business with founders like me,” says Power. “They trust our vision. I’ve never been strong-armed into doing something that is not right for me or my brand.” The men’s grooming company Harry’s was among the first direct-to-consumer startups to appear in Target’s beauty aisle, in 2016. Michael Moore, Harry’s head of retail, says that Target’s merchandising team understood that as an upstart shaving brand in a world of legacy players, Harry’s needed to introduce itself to new audiences. Target helped the company craft an aisle end-cap that conveyed the brand’s values. “It was a collaborative process,” he says.

Target’s Sando says that when it comes to searching for new brands, her team is looking for partners with expertise that is missing from Target’s own team. Over the past five years, for instance, Target has made an effort to bring on more Black-owned companies. Bevel, a shaving brand specifically designed for Black men, founded by Tristan Walker, debuted on Target shelves in 2016. Within two years, 60% of Bevel customers at Target were white, as compared to 25% on Bevel’s own website. “I have to give Target a hell of a lot of credit,” Walker says. “Our whole premise when we started was to get out of the ethnic beauty and grooming aisles. Target made a bet on us, just as much as we made a bet on them.” By 2018, Procter & Gamble had acquired Walker’s company.

But with its rich trove of customer data and growing in-house design capabilities, Target is increasingly able to create a hit version of just about any brand on the market. Some entrepreneurs are prepared for this. Stuart Landesberg, cofounder of the eco-friendly cleaning brand Grove Collaborative, launched an exclusive line of reusable spray bottles and cleaning products at Target in April. He says he expects retailers and other companies to copy Grove’s products, which is why his goal is to keep launching ones the market has never seen before. “When anybody copies us, they’re copying what we created two years ago,” he says.

“As a founder today, you have to go into business assuming you’re going to be copied,” he says, referring to the competition around eco-friendly innovation. “If people aren’t copying you, you need to ask whether what you’re doing is that compelling.”

After watching his sneakers get repeatedly ripped off, Allbirds’s Zwillinger has come to a similar conclusion. “We know imitations are coming,” he says. “But as a founding team, we decided that we’re not a shoe company, we’re a material innovations company. Copycats just won’t be able to keep up with us if we do a good job. I think that’s true for every business facing imitations and copiers: You need to innovate or you’re going to die.” He cites Allbirds’s recent development of a water-resistant wool and a sugarcane-based EVA-foam shoe sole. But how long can any brand sustain that pace of innovation?

Last March, after C9 by Champion disappeared from Target’s website and stores, it popped up again on Amazon. Hanesbrands announced it had signed a multiyear agreement with Amazon Fashion to make the line exclusively available on the site. But so far, Amazon has generated only a fraction of what Target did for C9: Sales plummeted in 2020 by $361 million from the year before. What’s more, by moving onto Amazon, C9 may have jumped out of the frying pan and into the fire. Amazon’s private labels grew from 30 to 110 between 2017 and 2020—spurring lawmakers to propose legislation that would make it illegal for the tech giant to prioritize its own products over those of merchants in searches.

Amazon treats in-house brands as a science, parsing data about top-selling products to create its own versions. It hasn’t quite mastered the art of creating private labels that are powerful design-forward brands in their own right. Target still reigns supreme in that arena—though it’s likely only a matter of time before Amazon tries to knock that off, too.

Echo Chamber

The world of retail is increasingly full of merchants, brands, and designers copying one another’s best ideas. Here’s a look at some of the forces driving the trend.

The Furniture Facsimile: Ikea touts its Scandinavian design roots and frequently collaborates with leading firms, but it’s been known to “borrow” from them, such as its 2015 line of molded chairs that leaned heavily on Eames.

Runway to Reality: Zara is notorious for replicating runway items. In 2016, it was called out for dupes of footwear from Brother Vellies and Yeezy (by Teen Vogue and Quartz, respectively) and an Acne coat.

Influencing the Influencer: As influencers launch their own fashion brands, their copycat tendencies are coming under fire: Both Arielle Charnas and Danielle Bernstein have been called out by watchdog Diet Prada.

Haute Couture Heist: Upstart fashion labels are fodder for their more famous counterparts: Louis Vuitton artistic director Virgil Abloh was accused last year of plagiarizing Belgium’s Walter Van Beirendonck.

The Prime Reproduction: Amazon’s growing private-label portfolio has earned the ire of Allbirds, whose shoes it has knocked off, and of lawmakers, who call its practice of prioritizing its own brands monopolistic.

The Lightning-Fast Knockoff: Fashion Nova has taken fast fashion, to the next level. Just hours after Kim Kardashian wore a black cutout Thierry Mugler gown in 2018, a copy appeared for sale on the site.

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