Target is betting on affordability, exclusive merchandise, and generative AI to win holiday shoppers this year. The retailer is offering more than 8,000 new gifts, with over half exclusive to Target and most priced at $20 or under. Target is also launching Ask Target, a conversational AI assistant available in beta on Target.com and the Target app, which helps shoppers find inspiration, build wishlists, and get personalized product recommendations. The strategy reflects broader consumer pressure: a National Retail Federation survey found that more than half of holiday shoppers (56%) say the state of the economy will affect their spending plans.
Target's AI assistant is part of a broader digital-first strategy that complements its owned-brand focus. The company's apparel business is 80% owned brands, allowing it to offer competitive pricing on items like a $45 cashmere sweater and $5 candles. For commerce practitioners, this demonstrates how conversational AI can accelerate product discovery and personalization while owned brands protect margin in a deflationary environment. Target's chief merchandising officer noted early adoption of Ask Target, with team members already using it to get product information across categories like beauty.
The U.S. holiday retail market is expected to grow 4.2% year over year, reaching a record $1.013 trillion in November and December. Target's layered approach—AI discovery, exclusive merchandise, daily deals, and price-point variation—positions it to capture share among budget-conscious consumers while leveraging owned brands and AI tools to maintain competitive pricing and margin.