Target wants to accelerate its comeback by serving a growing, but highly price-competitive market.
The retailer, which plans to invest $5 billion in 2026 to remodel existing stores and add news ones, wants to fix a pain point for some of its most stressed out customers.
“For many parents, shopping for a new baby can feel overwhelming and time-consuming. From choosing the right car seat to finding trusted everyday essentials, the decisions can quickly add up. That’s why Target is transforming its baby department,” the retailer shared in a press release.
That’s a smart choice as the baby products market has been growing.
“The global baby products market size was estimated at $355.94 billion in 2025 and is projected to reach $579.52 billion by 2033, growing at a CAGR of 6.4% from 2026 to 2033. One of the primary factors driving market expansion is the shift in consumer preferences toward high-quality, utility-driven, and premium baby products,” according to Grandview Research.
Target, while it’s not upscale, has a reputation for quality that might help it benefit from that trend.
Target has struggled to win customers back
When my son was born, I used Target as a way to get us both out of the house. We walked the aisles, I could get a Starbucks coffee, and as he got older, I could kill an hour there by bribing him with getting to pick a Hot Wheels car.
The chain has lost some of its customer base and has been working to win them back under new CEO Michael Fiddelke.
Target saw sales slip in 2025, according to its fourth-quarter earnings release.
“Full-year GAAP EPS was $8.13 compared with $8.86 last year. Adjusted EPS, which excludes non-recurring legal settlement gains and business transformation costs, was $7.57 and in line with company expectations,” it shared.
Fiddelke has maintained an upbeat tone while also acknowledging that the chain has work to do.
“Our team is firmly focused on writing Target’s next chapter of growth, rooted in strengthening our merchandising authority, delivering an elevated and differentiated shopping experience, advancing our use of technology, and continuing to serve and invest in our team and communities,” he said in the Q4 earnings release.
Target wants more baby business
Target has a comprehensive plan to add stores and invest in its business.
“Target’s new stores and remodels are supported by its $5 billion capital investment plan for 2026 — reflecting its commitment to deliver a more consistent, elevated shopping experience, while leveraging technology to fulfill online orders faster and easier for guests. This comes alongside an investment of hundreds of millions of dollars in additional store payroll and training to improve guest service in 2026.,” the chain shared in a press release.
A revamped baby section will be a key part of its store overhaul plan
“Target is transforming its baby department, curating the brands and products parents want most and creating a new shopping experience around them that feels more helpful, inspiring and enjoyable,” the company shared.
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The changes include bringing in higher-end brands.
“We’re launching a new Baby Boutique experience featuring premium brands parents have been asking for, expanding our Baby Concierge service to stores so parents can get expert support, introducing new spaces in stores and online that make it easier to discover and compare products, and adding nearly 2,000 thoughtfully-curated new items and exclusive finds guests won’t see anywhere else,” the chain added.
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Target takes on a growing market
Grandview Research explained why the baby products market is growing.
“Rising demand in the market is closely tied to parents managing daily constraints rather than aspirational buying. More dual-income households and nuclear families mean less time for home-based care, pushing demand for ready-to-use baby food, disposable hygiene products, and easy-to-handle gear such as lightweight strollers and baby carriers,” according to the research firm.
Grandview also highlighted the categories that have been growing.
“Baby cosmetics and toiletries led the market with the largest revenue share of 29.5% in 2025, due to the high frequency of daily-use products such as lotions, shampoos, and diaper creams. Increased hygiene awareness among urban consumers, coupled with strong brand presence and distribution across both retail and e-commerce channels, ensures consistent and recurring demand,” it added.
Related: Target quietly launches cult-favorite brand to lure back customers
Analysts weigh in on Target’s big baby move
GlobalData Managing Director Neil Saunders thinks this is the retailer playing to its strengths.
“Target is already successful in baby, mainly because of its product authority. However, it has lost market share in recent years as online has become more significant and rivals like Walmart have bolstered their offer and service proposition. Renewed investment should help Target to stem the losses and regain some ground,” he posted on RetailWire.
Carol Spiekerman, a retail speaker and strategist, also thinks the retailer is doing the right thing.
“The baby business is evergreen and a category in which Target enjoys built-in credibility. It’s the definition of low-hanging fruit as Target executes the next phase of its turnaround strategy. This time, it seems Target has a multi-pronged plan that builds experiences around brands rather than relying solely on having them,” she wrote.
Gary Sankary, a former Target executive with over 50 years of retail experience, also sees open space in the baby category for a retailer to take share.
“Target has some strong institutional DNA in this category. The merchants on Nicolet Ave in Minneapolis owned this category, and there’s no reason they shouldn’t own it again. The collapse of buybuy Baby and others in the segment is real, and new parents, who are highly motivated buyers and forming shopping patterns that, if Target earns their business, will make them lifetime fans of the store, like many parents are,” he shared on RetailWire.
The retail chain does face some risks in the category and more broadly.
“Target’s mid-market positioning leaves it vulnerable, squeezed by Walmart, Costco, Aldi, and dollar stores on price, while specialty and digital rivals win on product depth, speed,” according to a Morningstar report on analyst opinions.
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