Target Q1 E-Commerce Sales Up 141%, Profit Plummets

Big-box retailer and home entertainment distributor Target May 20 reported a 141% increase in e-commerce revenue for the first quarter (ended March 31), as consumers stocked up on lower-margin products online due to the coronavirus. As the same time, higher-margin apparel and merchandise sales declined, which contributed to a 0.9% increase in same-store sales.

CEO Brian Cornell said Target.com saw an increase of 5 million customers in the quarter, while more than 2 million used the drive-up service. The chain said more than 70 million people have downloaded the Target Circle app to access e-commerce.

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Overall retail sales increased 11.3% to more than $19.3 billion, from $17.4 billion during the previous-year period. Yet, net income plunged more than 64% to $284 million, from $795 million a year ago. The culprit: increased product, employee and shipping costs for online sales.

Target said cost-of-sales increased more than 18% to $14.5 billion, from $12.2 billion in the previous-year period. Administrative costs increased 10.9% to $4 billion, from $3.6 billion a year ago.

The decreases reflected actions taken by Target’s merchandising teams, including costs and inventory impairments related to the rapid slowdown in apparel & accessories sales, unfavorable category mix as consumers stocked up on lower-margin categories like essentials and food and beverage resulting in higher digital and supply chain costs, driven by unusually strong digital volume as well as investments in team member wages and benefits.

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Indeed, Target is paying store employees and extra $2 per hour through July 4.

“We’ll continue to be focused on [consumer/employee] safety, not just for the next few quarters, but for years and years to come,” Cornell said on the fiscal call. “We’ve been talking for years about being America’s easiest place to shop. We’re going to need to make sure we combine being an easy place to shop with America’s safest place to shop and make sure that that commitment to safety is ongoing.”

Merchandising: ‘Onward’ to a Slew of Exclusives

Target and Best Buy offered a slew of exclusives for several of the new titles hitting shelves May 19, particularly for Disney’s Onward and Warner’s Justice League Dark: Apokolips War.

For Onward, the latest Pixar release, Target offered a 4K Ultra HD Blu-ray with a gallery booklet and slipcover for $34.99. Best Buy had a 4K Ultra HD Blu-ray Steelbook edition for the same price.

Best Buy’s ‘Onward’ Steelbook

Onward arrived at retail without much fanfare, as Disney did little to promote the disc version after the studio’s prominent announcement the Pixar fantasy would be available on the Disney+ streaming service in early April. Stores then offered the DVD, Blu-ray and 4K editions without the so-called first-week discount, typically $2 to $5 off new releases. That is, the stores that bothered to actually put them on shelves. A clerk at a Target in Tustin, Calif., found the box of the store’s entire inventory hidden in the stockroom after being prompted to search for them by customers wondering why the shelf spaces allocated for them were empty despite other new releases having been put out, and the Target website indicating all versions were in stock at that store.

Further, the lack of a slipcover for the regular 4K and Blu-ray editions motivated several Pixar collectors to take to message boards to complain that their absence, in addition to the lack of early discount, would lead them to forgo buying the title until it goes on sale for the holidays. (Slipcovers, often sought by collectors, are typically only included with new discs in their early shipments to stores.)

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Moreover, Onward was also apparently not for sale through Amazon.com except via third-party sellers, and even then finding the disc versions wasn’t particularly easy to do through Amazon’s search function.

Onward’s lack of presence on Amazon is similar to another Disney-owned title, Fox’s The Call of the Wild, which didn’t have a disc listing at the online retailer until several days after its May 12 street date. This may relate to longstanding issues Amazon often has with studios such as Disney over distribution agreements for new titles, leading to Amazon not to take preorders for such titles.

Similarly, the newly released disc of Disney-owned Fox’s Downhill was almost nowhere to be found not just on Amazon (where it was offered by marketplace sellers, essentially Amazon’s version of eBay), but any physical store shelves, being relegated to the online stores of the major retailers.

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For Justice League Dark: Apokolips War, Target offered a Steelbook edition of the Blu-ray/DVD combo pack for $19.99, while Best Buy offered a 4K Ultra HD Blu-ray gift set that included a figurine of the Teen Titans’ Raven character for $29.99.

Best Buy’s ‘Justice League Dark: Apokolips War’ with figurine

Paramount’s Sonic the Hedgehog was offered as a 4K Ultra HD Blu-ray Steelbook by Best Buy for $32.99.

 

Best Buy’s ‘Sonic the Hedgehog’ Steelbook

Best Buy also offered Universal’s new The Blues Brothers 4K Ultra HD Blu-ray release as a Steelbook edition for $19.99.

Best Buy’s ‘Blues Brothers’ 4K Steelbook

Another Best Buy promotion lets customers buy Warner’s The Way Back Blu-ray at $19.99 and get $5 off another Warner Blu-ray.

Finally, Best Buy is already taking preorders for Warner’s Scoob!, which was released through digital channels May 15. The digital version is available now for $24.99, and Best Buy is offering the DVD at $17.99, Blu-ray at $19.99 and 4K Ultra HD Blu-ray at $27.99, though no street date for the discs has been announced.

Merchandising: ‘Birds of Prey’ Takes Flight at Retail

‘Birds of Prey’ standard-edition disc covers

Even a pandemic can’t prevent major Hollywood titles from getting their retailer exclusives. Warner’s Birds of Prey and the Fantabulous Emancipation of One Harley Quinn landed at retail May 12 with exclusive packaging options from all three of the major national home video retailers.

Best Buy’s ‘Birds of Prey’ Steelbook

Best Buy offered its typical Steelbook packaging for the 4K Ultra HD Blu-ray combo pack of Birds of Prey, at $34.99.

The nation’s largest electronics chain, which has been primarily serving customers through online orders and curbside pickups during the pandemic, also offered a promotion allowing customers to save $5 on another Warner movie with the purchase of Birds of Prey.

Target’s ‘Birds of Prey’ Blu-ray art

Target offered the Blu-ray/DVD combo pack at $24.99 with exclusive box art touting a digital comic book. The cartoony art style likely inspired Target to include the phrase “This is a live-action movie” on its “Only at Target” sticker placed on the outside wrapping.

Walmart’s ‘Birds of Prey’ DVD art

Walmart had a couple of options for Birds of Prey. First was a single-disc DVD edition with exclusive box art for $16.96, contrasted with the regular two-DVD version available everywhere else for $17.99. Walmart didn’t offer the wide-release DVD on its shelves, but did sell it online.

The Walmart DVD includes just the “Birds of a Feather” featurette, rather than the full array of extras fans could get for just $1 more.

Also available at Walmart were Blu-ray and DVD double features of Birds of Prey with 2016’s Suicide Squad, the previous appearance of Margot Robbie as Harley Quinn.

Among other titles, Fox’s The Call of the Wild arrived on disc May 12 as well, though the disc versions of the film are nowhere to be found on Amazon. Likewise, preorders for the May 19 disc release of Fox’s Downhill are absent as well. Amazon has had longstanding issues with listing new Disney titles, and it appears some of those problems have now carried over with the Disney-owned Fox releases as well.

Interestingly, one of the biggest concerns about Call of the Wild among online commenters at sites such as Blu-ray.com is that it was being released without a slipcover.

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Merchandising: Best Buy Continues 4K Catalog Push

With a modest slate of new releases hitting shelves May 5, retailers focused mostly on promoting catalog titles and more notable recent hits.

Best Buy in particular continued to offer deals on a variety of films on 4K Ultra HD Blu-ray.

The chain had a two for $30 deal on select movies from Paramount, including Ghost in the Shell, Interstellar, Saving Private Ryan, Gladiator, Braveheart, A Quiet Place, Mission: Impossible — Fallout, Overlord, Bumblebee and the 2009 Star Trek.

It also had a three for $35 offer on select Universal 4K movies, including Warcraft, Lucy, King Kong 2005, Get Out, Apollo 13, American Made, Straight Outta Compton, Fast & Furious 6, Furious 7 and The Fate of the Furious.

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Many promotions were also built around the annual “Star Wars” day known as “May the 4th Be With You.” Best Buy made “Star Wars” movies one of its weekly “Top Deals.” Target dedicated a full page of its weekly ad to “Star Wars” products, including the movies on Blu-ray for $19.99 each. And Disney offered the “Star Wars” movies through digital retailers for as low as $4.99 on May 4 only.

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Merchandising: Best Buy Celebrates ‘4Kpril’

The big retailers didn’t bother to attach exclusives to any of the modest new releases of April 14, as the coronavirus pandemic continues to shift attention away from the electronics section.

Best Buy, which has turned its focus to online shopping, touted some catalog sales and preorders for Steelbook editions of future releases.

Under the banner “4K Ultra HD — Celebrate 4Kpril,” Best Buy promoted a “save on select 4K movies” sale with 4K Ultra HD Blu-ray titles starting at $9.99 each.

Steelbook editions of 4K Ultra HD Blu-ray combo packs being touted for preorders at $34.99 apiece include Sony Pictures’ Bad Boys for Life (due April 21), Warner’s Birds of Prey (due May 12), Paramount’s Sonic the Hedgehog (due May 19) and Disney’s Onward (due May 19).

Best Buy’s ‘Birds of Prey’ Steelbook
Best Buy’s ‘Sonic the Hedgehog’ Steelbook
Best Buy’s ‘Onward’ Steelbook

Target changed the distribution of its weekly ad to online only, and this week didn’t include a home entertainment section.

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Merchandising: Pandemic Feeds Catalog Clearance Sales

With depressed foot traffic due to the coronavirus pandemic, retailers are touting deep discounts in an effort to clear some catalog titles.

Best Buy, which has been relegated mostly to online business but still offers curbside pickups, gave a savings of $30 to shoppers who bought both Star Wars: The Rise of Skywalker on Blu-ray ($24.99) or 4K Ultra HD ($29.99) with the Star Wars Jedi: Fallen Order video game. With the game priced at $39.99, that essentially means the movie is free, although the more-expensive Steelbook ($34.99) and the nine-movie boxed set ($249.99) also meet the terms of the promotion.

Another sale at Best Buy offers $5 off an additional movie when buying a Blu-ray or 4K UHD version of Universal’s Dolittle or Cats. A list of eligible titles is available at BestBuy.com.

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Different deals could be found at Target and Walmart, two big retailers whose stores are still open because they sell groceries and essential household supplies.

Target didn’t have any exclusives on the week’s new releases, but did have a buy-two-get-one-free sale on movies and kids’ books, with discs priced at $10 and $15.

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Walmart had a $29.96 Bad Boys 3-Movie Collection containing Blu-ray Discs and digital copies of the first two “Bad Boys” movies and a Vudu digital copy for the new Bad Boys for Life.

Merchandising: Stores Deliver ‘Star Wars: The Rise of Skywalker’ Exclusives

After weeks of touting preorders for Disney’s Star Wars: The Rise of Skywalker, retailers finally had the discs available for consumers March 31 despite the ongoing coronavirus lockdown.

Among the big three retailers, Target and Walmart stores remain open, with adjusted hours, since they offer groceries and other essential household goods.

Best Buy stores are closed for walk-ins but are offering shipping for online orders, as well as curbside pickups for local shoppers.

Target’s $34.99 Rise of Skywalker 4K Ultra HD Blu-ray combo pack comes with a gallery booklet and an exclusive bonus DVD with the featurette “A Final Alliance,” a chronicle of the various starships used in the film.

Target’s ‘Star Wars: The Rise of Skywalker’ 4K Ultra HD Blu-ray

Walmart offered the 4K Ultra HD Blu-ray combo pack as a limited edition with fold-out artwork packaging for $34.96.

Walmart’s ‘Star Wars: The Rise of Skywalker’ 4K Ultra HD Blu-ray

Best Buy has its customary $34.99 4K Ultra HD Blu-ray Steelbook treatment for Rise of Skywalker.

Best Buy’s ‘Star Wars: The Rise of Skywalker’ Steelbook

In addition, Best Buy has the exclusive U.S. distribution of the $249.99 nine-movie, 27-disc “Skywalker Saga” boxed set that includes a 4K disc, a Blu-ray disc and a bonus disc for each of the episodic films. Rogue One and Solo are available on 4K separately.

Best Buy’s exclusive ‘Star Wars’ The Skywalker Saga’ boxed set

Speaking of 4K, Disney also released all the films not yet available on 4K as three-disc standalone combo packs (ie episodes one through seven and Rogue One are new on 4K, while Last Jedi and Solo remain available on 4K from their earlier combo pack releases, though Disney seems set to re-release them with new packaging once existing inventory thins out). The retailers had them for $29.99 each.

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The online Disney Movie Club was offering various membership discounts such as 50% off all items in the order plus free shipping with the purchase of one at the full price ($34.99), which lowers the average to under $20 when all eight 4K combo packs are purchased together. DMC VIP members (those who fulfilled the membership requirement of buying five full-price discs previously) qualify for a 60% discount, pushing the average price to under $17.

Among other promotions, Target was offering a buy-two-get-one-free mix-and-match sale on video games.

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Merchandising: ‘1917’ Tops New Product Releases

With coronavirus sheltering orders across the United States impacting consumers’ ability to shop, stores are still selling new DVD and Blu-ray titles.

Best Buy may have closed its showrooms, but it still offers online shopping and curbside pickup for local shoppers.

Best Buy also had the only notable exclusive being touted by the big retailers among the week’s new releases: a 4K Ultra HD Blu-ray Steelbook combo pack of Universal Pictures’ 1917 at $32.99.

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Target and Walmart stores remain open because they sell groceries, classifying them as “essential” businesses exempt from shelter-in-place orders.

Neither were promoting exclusives among the week’s new titles, but they continued to take preorders for the March 31 4K Ultra HD Blu-ray release of Star Wars: The Rise of Skywalker.

Target’s ‘Star Wars: The Rise of Skywalker’ 4K Ultra HD Blu-ray

Target’s edition at $34.99 comes with a gallery booklet and an exclusive bonus disc.

Walmart’s ‘Star Wars: The Rise of Skywalker’ 4K Ultra HD Blu-ray

The Walmart edition features fold out packaging containing images from the film for $34.96.

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Walmart’s ‘Bad Boys’ Blu-ray triple feature

Walmart, which halted next-day delivery for online orders due to high demand, is also taking preorders on a Blu-ray containing all three “Bad Boys” movies for $29.96 due April 28.

Merchandising: It’s a ‘Jumanji’ Jungle Out There

The big three retail chains each had exclusive promotions for two of the big titles released to stores March 17.

The most notable was for Sony Pictures’ Jumanji: The Next Level.

Best Buy’s ‘Jumanji: The Next Level’ Steelbook

Best Buy had its typical Steelbook edition of the 4K Ultra HD Blu-ray combo pack for $32.99.

Walmart released a 3-movie “Jumanji” DVD collection containing Next Level, its 2017 predecessor Welcome to the Jungle, and the 1995 original Jumanji for $29.96.

Target didn’t have an exclusive edition, but did offer a free $10 gift card with the purchase of the new movie on disc with the $19.99 Jumanji board game.

‘Jumanji’ board game

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The other notable title was Warner’s animated Superman: Red Son.

Target’s ‘Superman: Red Son’ Steelbook

Target offered a Blu-ray/DVD Steelbook at $19.99 with the same cover art as the regular edition. The exclusive appeared to be available only in stores as it wasn’t listed on Target’s website.

Best Buy had the 4K Ultra HD Blu-ray combo pack with a pack-on Soviet Superman figurine for $29.99.

Walmart had a DVD-only edition of Superman: Red Son for $14.96. Only the Blu-ray and 4K editions were released wide.

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Another exclusive at Walmart involved the 2016 animated movie Trolls, in the form of a gift set containing a Trolls DVD and a troll wig. The set is timed with the release of Universal’s Trolls World Tour movie.

Merchandising: Declassifying ‘Spies in Disguise’ Exclusives

Best Buy and Target offered exclusive 4K Ultra HD Blu-ray versions of the new animated movie Spies in Disguise, which hit shelves March 10 from Disney-owned 20th Century Fox Home Entertainment.

Best Buy offered the film with Steelbook packaging for $34.99.

Best Buy’s ‘Spies in Disguise’ Steelbook

Target had a $32.99 limited edition with a pack-in “Super Spy Training Manual” booklet.

Target’s ‘Spies in Disguise’ limited edition with booklet

Another notable promotion during the week involved Walmart offering a code for exclusive behind-the-scenes content of Disney’s Frozen II with the purchase of Sparkling Ice bottled vitamin water.

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