Target (TGT) is looking to score a goal with a new set of shoppers by making a big push into the world of U.S. soccer.
The discount American retailer announced on Thursday it had signed on to become an official sponsor of Major League Soccer and the fast-growing league’s new Twin Cities franchise, Minnesota United FC.
The move is a departure for Target, which has never sponsored a professional sports league or team before and whose partnerships in the world of sports have been limited to sponsoring NASCAR and Indy racing. Target declined to share the financial terms of the deals.
As Target struggles to get back to sales growth, it is betting that riding soccer’s exploding popularity can help it win over more of a crucial and growing cohort of shoppers.
“We are always looking for new, innovative ways to connect and drive relevancy with our guests and we think soccer is a platform that can enable us to do just that,” Target’s senior vice-president of marketing Rick Gomez told Fortune. He added: “Soccer is incredibly popular with Hispanics and Hispanics represent a key demographic for Target.”
While beers and different consumer brands often sponsor sports leagues and teams, it’s rarer for retailers to do so.
Gomez noted that soccer’s popularity is on the rise across demographic groups and said soccer items are a hit with Target’s customers: sales of soccer-connected merchandise, including 1 million soccer balls, rose 15% last year, making it Target’s fastest-growing sub-category within its sporting goods business, he said.
The news comes at a time Target is on track to report a third straight quarter of comparable sales declines (the retailer’s shares were lashed by investors on Wednesday after Target announced a 1.3% drop in holiday season comparable sales) and fewer shoppers are coming to its stores. But the calculation is that Target is getting in on soccer’s boom before it peaks. Playing the game has long been popular – some 15.8 million Americas last spring had played soccer in the preceding 12 months, according to Statista, compared to 11.4 million six years earlier. That includes 3 million youngsters and Target will be the official retailer of U.S. Youth Soccer.
That has at long last translated into a thriving professional soccer league in MLS. Minnesota United FC, owned by a group led by former United Health Group CEO Bill McGuire and based in Target’s home area, will begin its inaugural season in March this year as part of an ongoing MLS expansion that will have seen the league go from 10 teams in 2004 to 28 by 2020. As part of its sponsorship, Minnesota FC’s uniforms will have Target’s bullseye logo on the jersey. The full design will be unveiled next month.
As the Los Angeles Times reported last year, MLS attendance has grown by almost a third to 21,300 per game, exceeding those of the National Hockey League and the National Basketball Association, which admittedly are arena sports and not stadium sports. And broadcast revenues have risen six-fold since 2005.
Gomez said Target would work with many of its top vendors, including Proctor & Gamble’s Gillette and Tide brands, and consumer products giant Kimberly-Clark (KMB) to integrate them into its soccer-related marketing, though details are still being worked out.
“We see this as a platform that could help us build connections with our guests, build love for our brand and at the same time drive traffic into our stores,” said Gomez. And after the problems Target had over the holidays, it could use all the shopper traffic it can get.