The retailing giant hopes a 5 percent discount will lure its frequent shoppers to buy more — and bump up its sales and bottom line.

Starting next Sunday, Target shoppers can use a Redcard to save some green.

Target will start offering a 5 percent discount on virtually every item for customers who pay with a Target credit card or debit card. Analysts see it as a bold move by the Minneapolis-based discounter, which is hoping to entice shoppers with an unusually lucrative pitch.

If the 5 percent deal works as well as it did in test markets, it should attract more customers, who will buy more items, which will give Target’s sales a big lift — perhaps more than $1 billion next year. But if it doesn’t? Then the deal will slice into Target’s margins,  discounting everything shoppers would have bought anyway.

So other retailers will be watching closely to                                                                                       see which way it goes and how disruptive the offer proves to be.

‘If it goes well, you’re going to expect others to copy it,’ said Red Gillen, senior analyst at Celent, a banking-industry research firm in Boston. ‘The industry follows their competition quite closely.  Walmart is also very, very aggressive in different kinds of payment products, so look at what they might do.’

Yet Walmart’s dominance is one reason Target finds the 5 percent discount so appealing. Both inside and outside Target Corp., the program is seen as a two-fer: something that can help Target, but would be tough for the larger Walmart to match.

Gregg Steinhafel, Target’s chairman and chief executive, explained the difference between shoppers of the two discount giants.

During a recent media event, Steinhafel noted that Walmart customers tend to be so loyal that they already use Walmart for everything — electronics, clothing, groceries. But Target customers are more apt to shop around. So offering a lucrative loyalty program makes sense for Target, but wouldn’t carry the same upside for Walmart.

‘It’s another way in which Target can differentiate itself from Walmart,’ agreed Dave Brennan, a retail specialist at the University of St. Thomas.

Dave Heupel, an analyst with Thrivent Financial, said the 5 percent deal should also give Target a new weapon in the pricing wars.  Its surveys show ‘there’s usually not much difference in the price between Walmart and Target ... but there’s a huge variance in how (consumers) view Walmart and Target,’ which works to Walmart’s advantage.

Heupel suspects that Target’s discount “really mitigates any advantage Walmart may have had” on price perception.

So be prepared for a blitz of boasting, price-cutting, claims and counterclaims. Heupel is certain of one thing: Starting next week at Target, “They’re not going to be shy about letting you know what fantastic benefits this has.”

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