The "And" Advantage: How Target's Novel Design Practice Powers a $30 Billion Business

Business leaders face a perennial challenge in reconciling the diverse expectations of stakeholders. Customers seek quality products at fair prices. Investors want strong returns. Employees expect fair wages. Society demands sustainability. Governments push for job creation and regulatory compliance. These competing, and sometimes conflicting, priorities can create what some leaders call a "tyranny of trade-offs"—a zero-sum game where satisfying one stakeholder appears to come at the expense of another.

Yet some organizations are beginning to take a different approach: transforming tough choices into opportunities for innovation and differentiation. Case in point: Target Corporation, which has built a $30 billion owned-brands business_^[1] by reimagining how design practice shapes the way the company develops products. This novel approach offers a model for other organizations seeking to transform competing demands from a dilemma into competitive advantage.

Target's Owned Brands: A Growth Engine

Walmart, Costco, and Kroger all have significant private-label offerings, but Target has taken this to a different level. Its portfolio of more than 40 exclusive brands_^[2] generates more than $30 billion annually, nearly a third of Target's total revenue. Eleven brands generate more than $1 billion annually_^[3], with four flagships—Good & Gather in food, Cat & Jack in children's apparel, Up & Up in household essentials, and Threshold in home goods—each approaching or exceeding $3 billion in yearly sales_^[4]. Were Target's owned brands portfolio a standalone company, it would rank among the top 150 on the Fortune 500_^[5]. The company continues to invest, recently announcing plans to add 600 new items to Good & Gather and Favorite Day (its food and snack brands), introduce more than 2,000 new baby and toddler items, and relaunch its pet-accessories line this year_^[6].

While the success of Target’s owned brands can be attributed to a range of factors—including merchandising expertise, marketing savvy, supply chain efficiency, and scale—one stands out: Target's unique approach to design. It goes beyond traditional design methods, such as user-centered design and design thinking, which prioritize the end user above all other considerations. Such designers identify user needs and wants, brainstorm and prototype solutions, and refine them through rapid iteration. Other constraints—sustainability challenges, recyclability, sourcing and production—are often considered downstream issues to be managed by other teams after the core design is established.

Jennifer Breeden Okun, Target's Senior Vice President of Owned Brand Product Design & Packaging, describes the fundamental problem with this sequential approach: "You get to the end of one thing, you're ready to hand the baton off, and then you realize, oh shoot, that has created an extra cost, and then you have to either go back or make a trade-off"_^[7].

Target's stakeholder design method upends this linearity by integrating a broad array of needs from the outset. Rather than starting with customer needs and then addressing sourcing, manufacturing, and sustainability later, Target brings all stakeholder needs to the table simultaneously.

A Purpose-Driven Design Brief

Why does Target embrace such a broad range of requirements? The answer is rooted in its corporate purpose—"to help all families discover the joy of everyday life"_^[8]—and its distinctive market positioning.

Since the 1990s, Target has intentionally carved out a unique space in American retail between discount stores and high-end retailers with its "Expect More. Pay Less."_^[9] promise. This strategy, sometimes affectionately dubbed "Tarzhay" by loyal customers, has enabled Target to grow into a national powerhouse with over $100 billion in annual revenue. Rather than competing solely on price with Walmart or on luxury with department stores, Target chose to deliver design-forward products at accessible prices.

In tandem, the company has a more comprehensive purpose statement focused on helping "all families discover the joy of everyday life." As Breeden explains, "The idea of 'all' really took us to this place of inclusivity. From a product perspective, it made us think about designing for a very wide audience." This purpose translates into concrete design requirements, such as accessibility and affordability, that align with Target's market strategy.

One of the largest design teams in U.S. retail—hundreds strong, including fashion designers, textile artists, industrial engineers, sustainability experts, packaging engineers, and food scientists—collaborates with merchandising, sourcing, marketing, digital, store operations, and global partners. These integrated teams tackle customer needs, business goals, sustainability targets, manufacturability, and inclusive design.

Breeden emphasizes, "Sometimes constraints can be perceived as trade-offs, but we found that by bringing all those considerations up front through design and the process of problem solving, you can find ways to reconcile things that seem at odds. This ensures that every decision benefits customers, business partners, communities, and the environment simultaneously."

How It Works in Practice: Figmint

The development of Figmint_^[10], Target's kitchen essentials line launched in 2023, provides a concrete example of stakeholder design in action and the business results it can achieve.

With Figmint, Target assembled a cross-functional team and built their design brief around six focus areas including accessibility, aesthetics, affordability, profitability, manufacturability and sustainability.

As part of the accessibility strategy, Target partnered with the Arthritis Foundation and the Intuitive Design Applied Research Institute, not as an afterthought, but as core collaborators in the design process. "We went through many rounds of prototyping," Breeden says, "testing products with people who have arthritis while simultaneously ensuring we could manufacture them efficiently."

Traditional approaches might have treated accessibility as a secondary feature to be addressed after the core design or sacrificed it when manufacturing constraints emerged. Instead, the team worked with occupational therapists to develop innovative solutions like easy-grip handles and one-handed operation features that ultimately enhanced the product's appeal for all users without compromising on style or driving up costs.

The result wasn't just a successful product line that met sales and margin expectations. The integrated approach yielded innovations that differentiate Figmint in the marketplace, creating a competitive advantage that would not have resulted through conventional design practice. Moreover, the team developed and published accessibility guidelines that have since become industry standards, available as open-source resources—extending Target's impact beyond its own business.

Similar success stories can be seen across Target's owned-brand portfolio. Cat & Jack children's clothing balances kid-appealing designs with parent-friendly durability and value, while incorporating recycled materials that advance sustainability goals. Threshold home goods bring sustainable materials into stylish, affordable products without compromising on quality or margins.

Building Organizational Capabilities for Stakeholder Design

Target's integrated design approach didn't emerge overnight. It's built on carefully cultivated organizational capabilities that enable cross-functional teams to transcend the traditional silos that plague many companies.

"Finding a way to articulate a shared purpose that comes from the very top of your company—to have it culturally embedded within the company—that is the number one thing that makes it easier to make things happen," Breeden explains.

This shared purpose creates the foundation, but Target has also embraced "horizontal leadership"—the ability to work effectively across organizational boundaries. "It's about embracing a collaborative approach and aligning everyone to shared goals and purpose," says Breeden.

This approach requires specific skills that Target actively cultivates: "Listening and empathy, adaptability, really good communication, and building robust relationships to create trust through consistency of actions, transparency, and reliability."

Equally important is what Target calls an "enterprise mindset"—looking beyond functional objectives to focus on what best serves the overall organization and its customers.

As Breeden puts it: "By embracing this broader perspective, we can drive collective success across the organization and create solutions that benefit everybody versus trying to do it one by one with baton passes along the way."

From User-Centered Design to Stakeholder Design

The implications of Target's approach extend beyond retail and product development. Any organization wrestling with seemingly competing stakeholder demands can draw inspiration from the stakeholder design model. Here's how executives can begin applying these insights:

1. Start with Purpose

The foundation of Target's approach is its clear corporate purpose: "To help all families discover the joy of everyday life." This isn't just an aspiration, but a practical decision—making a framework that integrates economic and social value creation. Your organization's purpose should similarly provide a compass for navigating a range of stakeholder needs.

2. Aligning Stakeholder Commitments to Business Goals

Target considers opportunities to integrate solutions related to sustainability and accessibility in support of driving efficiencies and achieving business goals. Sustainability elements are important design considerations when determining how best to meet consumer and stakeholder wants and needs.

3. Integrate Constraints at the Start

Rather than addressing challenges sequentially, bring all stakeholder requirements and constraints to the table from the beginning. "It's essential to have the mindset of, 'We are going to figure out how to do all these at the same time,'" Breeden emphasizes. "And though these things seem at odds, how do we work together to figure out the creative solutions?"

4. Develop Cross-Functional Problem-Solving Capabilities

Integrating constraints upfront inevitably requires working across organizational boundaries—product designers must collaborate from day one with sustainability experts, finance teams, manufacturing specialists, and others. This collaboration doesn't happen by accident. It requires "horizontal leadership" skills: the ability to influence, align, and create solutions across teams. It also requires investment in developing empathetic listening, adaptability, communication, and relationship-building capabilities that enable teams to turn potential conflicts into collaborative problem-solving opportunities.

Business Impact of Stakeholder Design

Target's stakeholder design approach has yielded results beyond its large and growing owned brands business:

• It has reduced costly redesigns and rework that occur when issues are discovered downstream
• Counterintuitively, it has accelerated time-to-market by anticipating and addressing opportunities and potential roadblocks earlier
• It has enhanced brand loyalty through consistent delivery on the company’s purpose
• It has attracted talent drawn to an integrated approach to business and societal impact

In today's world of interconnected stakeholders, the ability to create integrated solutions that simultaneously deliver for customers, employees, communities, and shareholders isn't just a necessity—it can be a path to competitive advantage. By reimagining design as a strategic approach to address a wide range of consumer and stakeholder needs, Target offers executives a powerful model for transforming apparent dilemmas into the catalysts for innovation.

[1] Target Corporation 2023 Q4 Earnings Report: https://corporate.target.com/press/release/2025/03/target-corporation-reports-fourth-quarter-and-full-year-2024-earnings

[2] Target Corporation, “Target Brands,” accessed March 2025: https://corporate.target.com/about/products-services/target-brands

[3] Trung T. Phan, “Inside Target’s Billion-Dollar House Brands Strategy,” The Hustle, August 17, 2021: https://thehustle.co/08172021-target-brands

[4] Trung T. Phan, “Inside Target’s Billion-Dollar House Brands Strategy,” The Hustle, August 17, 2021: https://thehustle.co/08172021-target-brands

[5] “Fortune 500 Directory,” 50Pros, accessed March 2025: https://www.50pros.com/fortune500

[6] Retail Dive Staff, “Target expands baby assortment with more than 2K new items,” Retail Dive, March 6, 2025: https://www.retaildive.com/news/target-expands-baby-assortment/743217/

[7] Jennifer Breeden Okun Interview, Yale Program on Stakeholder Innovation and Management, December 2, 2024

[8] Target Corporation, “Purpose & History,” accessed March 2025: https://corporate.target.com/about/purpose-history

[9] Target Corporation, “History Timeline,” accessed March 2025: https://corporate.target.com/about/purpose-history/history-timeline?era=2

[10] Target Corporation, “Figmint Brand Page,” accessed March 2025: https://www.target.com/b/figmint/-/N-q643ler3za4