Target’s Q2 earnings gave us plenty to like. Net sales increased 5.3%, comparable sales grew 3.8%, and Target raised its full-year sales outlook to around 5%. Target has now delivered three consecutive quarters of improving sales performance, telling us that the turnaround underway under CEO Michael Fiddelke is gaining traction.

With holiday plans already taking shape, Q2 tells us where Target is investing, what is bringing guests back, and what brands will need to execute particularly well in Q4.

Target is creating more opportunities for brands to get into the basket. Those opportunities will increasingly favor brands that connect assortment, value, availability, digital shelf and retail media rather than optimizing each one independently.

5 Questions as we prepare for Q4:

What is our role in the Target guest’s trip? If traffic is growing faster than basket size, what will earn our place in that basket?

Is our Q4 value proposition obvious? Can a guest quickly understand why the product is worth buying without relying solely on a promotional badge?

Where is our newness? Target is increasingly using seasonal assortments, exclusivity, collaborations and emerging brands to create discovery.

Can our inventory support our media plan? Especially when a growing share of digital demand is fulfilled quickly through Target’s store network. Nailing the basics is still key.

Are sales, ecommerce, operations and Roundel working from the same Q4 plan? The Target guest experiences all of them as one ecosystem.

Target’s strongest categories tell us something about the trips gaining momentum. Food & Beverage and Beauty delivered high single-digit growth, while the retailer’s Fun 101 category, which includes toys, electronics, sporting goods and entertainment, grew double digits. Target said snack sales increased more than 15% following its largest grocery reset in more than a decade. Frequency, discovery and fun are all playing a role in bringing guests back.

Align with Target’s investments, especially where they’re trying to build authority

Q2 also gives brands a map of where Target wants to become more differentiated. Newness. Newness. Newness!

Food & Beverage is being repositioned from something shoppers add to an existing Target trip into a reason to visit in the first place. Target is increasing newness, giving more space to emerging brands and leaning into areas such as wellness, global flavors, protein and better-for-you snacking.

Target Beauty Studio begins rolling out this fall to more than 600 stores, bringing more than 60 new-to-Target prestige and emerging brands into an elevated beauty environment.

For brands, these investments should shape how you approach the retailer. A category Target is actively trying to reinvent creates different opportunities than one operating primarily for efficiency. New products, exclusive assortments, culturally relevant ideas and strong category insights become especially valuable when they help advance a priority Target has already made clear.

Roundel should be planned alongside the rest of the Target business

Target’s fastest-growing businesses are also extending beyond traditional merchandise sales. Non-merchandise revenue grew more than 20% during Q2. On the earnings call, Target reported that Roundel gross billings grew nearly 20%, Target+ marketplace GMV increased more than 40%, and Target Circle 360 membership revenue grew more than 40%.

The guest seeing a Roundel placement may later purchase through Target.com, select Drive Up, receive the product through same-day delivery or walk into a store after discovering the item digitally. Target is simultaneously investing in personalization, loyalty, AI-powered discovery and faster fulfillment.

A holiday strategy that separates merchant conversations, digital shelf, retail media and inventory planning becomes increasingly difficult to optimize in that environment.

Brands should enter Q4 with a shared view of the business across those functions. Media teams should understand promotional timing and inventory constraints. Sales teams should understand what search and media data are revealing about demand. Ecommerce teams should know which seasonal items the merchant organization is prioritizing.

At Bluebird, our goal is to not only spend more on Roundel. It is making every dollar of that investment work harder because the rest of the retail fundamentals are aligned behind it.