# S1 E8 Shopify 2 Target Plus

S1 E8 Shopify 2 Target Plus 

[00:00:00] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Hello and welcome to the Middlemen. We live at the intersection of online media and commerce, and we distill the topics that you need to be aware of. And I am Tom Limongello. I'm here with Todd Sawicki This episode is about Shopify. It's our second episode in the series, and it's also about the news around Target and Shopify Partnering for Target's third party marketplace. 

[00:00:29] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Todd, what's the news? So Target announced a partnership with Spotify and it came across as a fairly big deal in. The news two large companies, target being one of the largest retailers in the United States, obviously, and Shopify as we're sharing with everyone and teaching them over in last week. 

[00:00:49] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: This week and in the upcoming weeks is the most important e-commerce platform to build an online storefront outside of Amazon and. Also a publicly traded company that's seen [00:01:00] stock price zoom up during the COVID stock market bubble. The and so they have a partnership. And so people have said, oh my gosh, this is really gonna, be something that helps put target on the map in terms of being a much more larger presence in the online commerce space. 

[00:01:17] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And really what it is in fact something much smaller. So the partnership is to quote the press release, which we're sharing on the screen from Target's website to quote, Shopify. Merchants in the United States can apply to sell online and Target Plus through Marketplace Connect and App enabling merchants to seamlessly sell and manage orders on leading marketplaces like Target Plus. 

[00:01:43] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: That's it. What it is and I'll, quickly show everyone and show the, app page. It's Shopify has an app that allows merchants or brands who sell through [00:02:00] Shopify store to push their inventory and product listings into online marketplaces. Currently through or previously through the app, you could push to Amazon, Walmart, eBay, and Etsy, and now you can push products to target. 

[00:02:18] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I, this is, so this is really just a little app partnership. And by the way, this app, and the way Shopify works as a store owner is that you can install different apps, add additional functionalities to your storefronts. This is a paid app. It's not even free, it's not used universally across the 2 million stores in Shopify. 

[00:02:35] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: So you're talking about a subset of stores that cross list goods in marketplaces outside of Shopify. So the reality is. This isn't as big a deal. It's not like every Shopify merchant suddenly is gonna show up in target, which I think some people actually thought it was going to be and what it means. 

[00:02:57] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Yeah, I'll do this in my NPR voice. I [00:03:00] want to remind everybody we bought some, gear. If you're looking at the screen or if you're listening we, are upgrading a little bit. But yeah, like my, my, my interjection is to say I was really excited about this. Whole partnership idea because in my mind it sparked, oh, target is really great at curating their store, but their online presence is not an endless aisle. 

[00:03:24] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: It really actually seems to lack an assortment. And I thought that on the Shopify side you had this amazing sort of flywheel of product discovery where I'm not discovering those stores on my own. I'm seeing the ads that show up on Instagram. Either based on a, search that I've done or just based on whatever targeting I'm seeing these products and I'm going to the store and converting. 

[00:03:52] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And I feel like if Target were to lean into this partnership, that it could be really interesting [00:04:00] because Target has this sort of halo of quality, even though they're a mass retailer. So, to me it seemed maybe it isn't on the surface technically an amazing new thing. It's just adding the last of the big retailers to their app. 

[00:04:17] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: But it could be amazing. I don't know if you think the same way, so I'm, more cynical here. This is like a little low level biz dev partnership in all reality. It's, one of the things that if it were all 2 million merchants magically showing up on target, I think that would be a bigger deal. 

[00:04:37] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: The, but in this case, I'll read you another quote from the press release. It really isn't anything close to that. And that's I think something that we should we'll, push into here, so to, to quote, the new partnership with Shopify will expand, target plus through a hand selected note, hand selected assortment of new and on-trend products and brands like True classic Kalina and more [00:05:00] giving consumer options to explore porter prices, blah, blah, blah. 

[00:05:03] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And one of the things that target. Does is I love how they turn. What I, what I think is a, potentially a negative about their business versus I think your perspective on Target. Like they, they turn closed and not open. Meaning they're, they don't have an app store. 

[00:05:25] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: They don't connect very easily to third party platforms. In fairness, this is kinda one of their big first steps in that direction. They don't have open APIs to, publish into like other platforms like Amazon and Walmart do. And they're turning this, thing into a huge plus hand-selected curation. 

[00:05:45] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I look at slow and outmoded potentially, as if you, so if you're brand on Shopify and you wanna sell in Target, you don't just install this app and suddenly you're in Target, you install this app and basically you apply. [00:06:00] To target and hope their merchandisers pick you up and wanna put you in their storefront. 

[00:06:07] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: In this day and age of digital distribution and, digital connections, you're still gonna have to talk to a human being just like you did before to get approved, most likely. Like you're gonna, you're basically, it's like almost to me, it's like a credit card application. You're gonna fill out a credit card an application to show up in Target, and hopefully you do. 

[00:06:23] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: But there's no guarantees you will. So this is I'm not quite sure it'll have much of an impact on either company's earnings anytime soon. And the other thing is that as we looked at this, Target's already selling third party goods. I think that's one of the things people realized is that, like I just bought some razor blade replacements for, my old fashioned manual razor and the, razor blade replacements. 

[00:06:53] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Are being sold and shipped by a third party, which I didn't realize was even happening. So Target's already at least started inviting third [00:07:00] party sellers, even if it's not quote unquote, an open platform a allow Amazon and Walmart. And but that, that already happens. So I don't even think people are aware that Target's been a platform that third party sellers and brands have been able to sell. 

[00:07:15] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: To date. So maybe it's an interest in showing, in target, showing the Shopify merchant world that they are more serious than they have been even though they've had this program since 2019. And like you mentioned, Rugg Bulls on there and their other third party sellers out there, whether they're Shopify or not. 

[00:07:36] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Maybe they're, trying to push harder on it. But then that raises a question for me, which is. Whether curated is a marketing term or not. If you have a very curated experience, and I think Target has a great one in store where they have their Starbucks area, their CVS area they they, box things up nicely so [00:08:00] that they don't have a, total mess in terms of their assortment. 

[00:08:04] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: But it isn't the deepest assortment. So if they go bigger, do they lose that curation? Or is there a special target way of opening the doors at least a little bit. Is there I don't know if what you think about that concept is curation in conflict with marketplace. I think that's the, bet that obviously target's making to differentiate themselves, I think in this world of, endless aisles, right? 

[00:08:31] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Amazon's tagline a few years ago was the world's largest retailer. And Target is, clearly not trying to compete against that. The whole curation, hand selected language, trying to turn what I view potentially as a negative into a positive good marketing. Congrats on the team who's, who stumbled into those words. 

[00:08:48] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I think that's an area where I would. I don't know if, you can do that in this world of infinite choice and competing now. I think there is one interesting thing in the press release they also [00:09:00] mentioned is that Target has said that they will select and recruit. Products and brands through this program to put in store. 

[00:09:09] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Now that is potentially an interesting aspect from a merchandising standpoint. It does make their dis their merchandising discovery potentially a little easier. And so I think that is something where you have an opportunity of your target to get more stuff in store now it is, that enough? 

[00:09:25] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I don't know. And I think Tom, you pointed out interesting experience looking at some, their relationship. Previously or to date with some of these upstart brands and is it such a good thing? Yeah. I'm gonna share something here on the screen again. So anybody who is a fan of. 

[00:09:47] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Summer floating inflatable devices. There's a brand out there that I was a fan of in the last couple years called Sunny Life. And they make like popsicles shaped [00:10:00] floaties for your pool or anything inflatable you can imagine, but in nice irregular shapes and bright colors. 

[00:10:07] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Really exciting brand. Probably a little expensive, but now if a brand like that wanted to be in Target plus. They might notice that Target just launched Sun Squad, which is lower priced and very similar brand of inflatables that probably pushes out any potential for competitors in this area because they have a whole wall of these products it's half an aisle. So it's, to me, if you're a brand who. Is likely a target of targets private label ambitions, you might have a little bit of trouble. Or is it the case that you better get into the Target Plus program? Otherwise Target's gonna copy you. So those, were my thoughts as I was going through the store with my daughter in the last couple days.[00:11:00]  

[00:11:00] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I think that's it, raises some interesting questions, right? In terms of Amazon a few years ago was notorious. For copying successful brands and products third party sellers successful products. And when Jassy became CEO and Jass became CEO of Amazon, he killed that program and Amazon's been much more focused on just being a platform. 

[00:11:20] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And they said, look, we're gonna basically kill off our private label brands. We're gonna focus just on working with third party brands and resellers. More and more that's their take. Fewer and fewer things are being sold and distributed by Amazon. And I think that's a fascinating aspect where if your target. 

[00:11:37] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Do you I, think that's an interesting thing to, to look into and be concerned about is, that where are you gonna scare off brands wanting to work with you if you copy them? Another interesting thing here to our conversation in our series near here and now on understanding Shopify and the question why Shopify as a platform, we're starting to answer that question. 

[00:11:56] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I. As well, and how do you work with Shopify as a platform. But I think another question that's [00:12:00] fascinating to me is a brand, which is where do you go first? Do you go to Amazon first? Do you go to Target first? Do you go to Shopify first? And you, from my perspective of, living and working with the Amazon marketplace and different customers of ours from an Expedia perspective who work with both. 

[00:12:19] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And my advice has often been if you're creating a brand, starting at Amazon first. Building up revenue and sales and then migrating to Shopify has been a recommendation. Obviously there's lots of benefits of creating your own storefront on Shopify that we talked about last week in terms of owning your customer relationships and having complete control over what happens with your products. 

[00:12:40] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And I think, but that, that has been categories like electronics, like anchors, the, I think the, poster child for successful upstart brands in electronic accessories as an example. And there's been other brands who've followed them in that regard. And they started on Amazon and now they have the third party [00:13:00] storefronts. 

[00:13:00] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: They have a Shopify store. They're, outside of Amazon. And but that's not, yeah that's where, I think I when I again, thought about this partnership, I'm like, oh, beauty brands, apparel, brands and stuff like that, that generally just start with their Instagram strategy and then bolt on a Shopify store, and that's their little virtuous cycle. 

[00:13:22] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: I. They don't start on Amazon, right? No, I think you're and, actually as you brought that up in our conversation about beauty brands oh, damn. If I, if you look at the beauty brands like Archie and Sisters, the and, others that have popped up, you look at that and you go, oh my gosh. 

[00:13:40] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: They absolutely, they're almost never on Amazon. In fact, they're, they don't even sell direct on Amazon. It's all through resellers authorized, or not a lot of times not authorized. And so they're. Going, doing a Shopify social strategy first and marketplace strategy [00:14:00] later. And I think that's an interesting question as to, oh, if I'm going to why Shopify often it's to be, to have those first party relationships with your customers is really the primary reason. 

[00:14:10] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: But I think it gets to product discovery. And if you're, from a consumer standpoint, how do you discover products? And if you're a brand, an upstart brand who is social friendly, and obviously if you're an influencer starting a brand, you already have an audience and it's easy to take advantage, and it's a lot easier to sell on Insta or TikTok via Shopify than it is via Amazon. 

[00:14:33] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And so if you have that built into from a brand's perspective, would be customer discovery, ac customer acquisition. Then I think that's an interesting way to look at it. 'cause if you don't have those natural channels, then going to a marketplace like Amazon is a way to, they have customers coming to their store and looking for products. 

[00:14:56] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: They spend, by the way, am I don't know if people realize this, Amazon's the largest [00:15:00] advertiser on Google search globally. Spend billions of dollars on Google search. They're trying to drive a crap ton of traffic back to Amazon. And so they're bringing people to your, product, to your, to their marketplace, to their storefront. 

[00:15:13] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And so if you, that's, so you're effectively, the benefits of Amazon is you're outsourcing that customer acquisition to Amazon. And trade off, of course is they own the customer relationship, not you. Versus yeah, that's the front line. If you have that audience you, don't need that. Yeah, the yeah, and we talked a little bit about this last time, is that Shopify is not a marketplace, so they don't, benefit from that front running except in the case, I think we're starting to see from the Shopify summer editions they are starting to promote their own shop app. 

[00:15:45] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And it's interesting to watch that sort of slowly become a thing. Shopify, for those who aren't aware, Shopify has an app called the Shop app. And effectively it's intended as this promotional [00:16:00] vehicle that Shopify is promoting as almost a front door to Shopify as a way to discover products across the Shopify ecosystem. 

[00:16:08] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And even then, it's not a universal, I. Across Shopify's 2 million stores, you have to download the shop app to your store that connects you almost similar to this Marketplace app that, that we're talking about in terms of the partnership between Target and Shopify. So you download that app to your Shopify storefront that connects you with the shop app catalog, and you can opt into having products promoted through Shopify's shop app, which is the one marketplace app that they have. 

[00:16:38] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: You can, they do have an a, a. An advertising program that you can opt into to have them acquire customers for you through the shop app. And that's really the, and we'll get into this a little bit too, it's really their only online retail media play currently. Yeah. And 'cause they don't have inventory on storefronts. 

[00:16:57] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Yeah. The fact that and, there, there [00:17:00] were also ideas around, and I think this might be interesting as well, is, even though brands are not really looking to spend more on retail media they're gonna spend it somewhere with some retailers and does Shopify's entrance into target give those brands a low barrier to entry to, be doing retail media with at least a big retailer, whereas maybe they don't see the results of doing it with an Amazon or a Walmart. 

[00:17:33] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Or maybe it's too hard to do with a Walmart because they don't the third party app ecosystem in Walmart's case isn't, is as easy to use. Yeah I think when we were talking about this, my thinking was that was target strategy here. Like we know we're not gonna be the best at running third party marketplaces, so we want to go with the best app ecosystem, Shopify for those merchants so that it's very easy for those [00:18:00] merchants to just bring. 

[00:18:01] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Their entire capability to the target marketplace. I don't know if that makes sense to you, but that was my thinking of hey, like maybe this is a very pragmatic strategy on Target's point. I think that's a an interesting perspective, right? For, again, for those who aren't aware, why Shopify one of the reasons why Shopify is, it has by far the largest third party app ecosystem. 

[00:18:28] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: To add functionality to your online storefront or your online e-commerce presence. And so if you wanna do it, Shopify has an app that allows you to do that. Not Shopify As, themselves as a company. They do have apps in the app store, like the Mark Shopify Marketplace Connect, which interestingly enough, they have, that was a third party app company that they acquired, formerly known as Coiso. 

[00:18:52] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And so to Target's point of being behind. Amazon and Walmart in terms of their online [00:19:00] presence. I think that's an interesting thing where if, Target is leaning into Shopify as a way to extend their technological commerce presence, then that's an interesting, I think play for them and doing a partnership around one little app in the Shopify app store is perhaps meaningful in terms of a direction for Target, but not meaningful in terms of. 

[00:19:24] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Will it materially impact Target or Shopify's business or revenue? No, this is not gonna change the trajectory of either company's revenues, but I do it. But it does, I think, signal some, interesting impacts of, yes, Shopify is an ecosystem that is important. If you're an, if you're building, if you're a brand and you want an online presence and you wanna sell things online target, it will allow you to extend into other marketplaces like Target. 

[00:19:49] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: And I think that's really one of the things to walk away from. This is. I just don't know how you, if you're selling in Amazon, you're gonna eventually be selling in Shopify, you're selling in Shopify, you're gonna be selling on Target, Walmart, [00:20:00] Amazon, most likely. There isn't, I think a it's not one destination for every consumer or every transaction, I think is one of the takeaways from this thing. 

[00:20:10] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: We'll probably have to end it there. I I think my insistence on there being magic in this connection between Target and, Shopify may not have passed. Through the reality that retail is. Is a marathon and not a sprint. I feel, like I don't think I've won this one, but I, still have a belief that it could be interesting. 

[00:20:34] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: So we'll have to see it play out. But again, thank you for listening. Hopefully it was a better experience this time now that we both have new microphones. And we're, doing our best to upgrade our capabilities here at the Middlemen. So thank you listeners who have told us your feedback. 

[00:20:51] The Middlemen Episode 8 - Shopify Part 2 - Target Plus: Keep doing that. And we'll be, back with episode three of Shopify soon. So thanks again and we'll talk to you next time. [00:21:00] And don't forget if you to like, subscribe and check in for the next episode, as we mentioned, which will be continue on the Shopify and understanding Shopify. So tune in again.