Question

Target is a discounter that enjoys the opportunity to collaborate with high fashion brands and license a capsule collection to distribute in their top tier stores to differentiate themselves from their competitors. However, groceries dominate the majority of the store's sales and staple items in clothing tend to offer the highest gross margins. How would you choose a licensing partner for Target to attract Millennial shoppers to their new store opening in Herald Square in October 2017? Be specific in explaining your rationale for choosing this Designer Brand partnership with Target. Discuss sales targets and royalty payments in your answers.

Answer 1

In order to attract millennial shoppers and to drive more millennial foot traffic through the store, we've selected metrics that act as key decision makers for shoppers. Including price, brand popularity, margins for the store for viability, % of millennial shoppers that they attract, potential sales per month, the frequency or the rate at which they update their clothing line and rated it on a scale of 1 - 5 stars. Based on the table below, I would choose American Eagle as it present the best balance in terms of Margins and it's over all ability to attract millennial shoppers backed by high potential sales and the frequency at which they update their clothing line.

	Partners	American Eagle	Crocodile	Louis Philip	GAP
Partner Criteria
Price		***	**	****	*****
Store Margins		***	****	**	**
Brand Ranking or Popularity		*****	****	**	***
% of Millennial Shoppers		*****	**	*	***
Potential Sales		****	**	*	***
Updated Clothing line Frequency		****	****	**	***