Target’s private labels have always been a key part of its brand strategy, but the retailer is now phasing out some of its original core lines to make room for a wave of new private-label brands that are much more niche.

Over the past year, Target has launched seven new brands, including A New Day and Prologue, focusing in on a variety of customer segments. Meanwhile, it has phased out brands like Mossimo and Merona that were long-time centerpieces of the retailer’s fashion strategy. Those brands were broader, focusing on men’s and women’s, while newer brands are much more niche.

These owned brands make up a strong percentage of Target’s sales: In 2016, private-label brands made up 30 percent of Target’s total revenue, and several of those brands, most recently A New Day, have reached more than $1 billion in annual sales. Both Mossimo and Merona were also billion-dollar brands for Target.

With the owned brands added to Target’s portfolio this year, the retailer now has the opportunity to segment those brands in a much more specific way. Each of the new brands launched this year is targeted at a specific demographic, such as Gen-Z women or millennial men, Target told Glossy at its holiday press preview event on Wednesday.

The segmentation for these brands begins with deep dives into Target’s customer data, looking at shopping habits of different demographics.

“There are a number of different elements that go into the creation of our new brands,” said Target spokesperson Jessica Carlson. “To start, we worked directly with our guests to inform every new brand we have introduced over the last year. Our guest wants and needs to drive every decision we make, and we’re constantly learning and adjusting along the way based on their behavior and preferences. Target’s in-house teams develop personalities and guardrails for each brand and its unique aesthetic.”

While Mossimo and Merona both helped propel Target to prosperity in the early 2000s, the brands have suffered since the rise of fast fashion and online shopping due to their lack of specificity and are no longer “resonating with guests,” Carlson said. The two brands catered to many interests and audiences without focusing in on a particular group. After a few years of diminished overall revenue – dropping from $73 billion to $69 billion between 2016 and 2017  – Target is relying on the success of distinct brands like Goodfellow & Co., a dressier, older men’s line, and Original Use, a men’s line for younger consumers inspired by streetwear.

“We’ve come to expect Target’s pulses of generationally minded initiatives aimed at creating buzz and relevance,” said Jared Berger, vp of retail strategy at Ansira, in an interview with Glossy in May. “[We’ve seen it] in their partnership and co-brands with Missoni and Lily Pulitzer, and their continued evolution of in-house brands designed to both highlight the individual and extend the retailer’s coolness and relevancy quotient.”

The streetwear connection is particularly notable for Target. Target’s competitors — retailers like Macy’s and Amazon — have also made private labels a priority. Macy’s hopes to boost private-label sales to up to 40 percent of its total revenue by next year. However, none of those retailers have tried to go after the streetwear crowd with a private label.

Target is under increasing pressure from Amazon, which is set to become the de facto leader in apparel sales for mass fashion today as it inches closer to toppling industry leaders like Macy’s. Amazon has been steadily launching a huge number of private-label brands. The e-commerce giant has 76 owned brands currently, more than half of which are fashion-focused and covering a huge gamut of different aesthetics and styles. Target and Amazon are adopting similar strategies of scale, hoping that a wider variety of more specified brands will be superior to a smaller number of broader brands.

With its steadily growing portfolio of owned brands, Target is hoping the more precisely targeted nature and granular focus on specific demographics it is adopting will help it stay competitive.

“As we evolve our assortment, we recognize the importance of offering differentiated brands with a variety of aesthetics to serve both our current guests as well as attract new ones,” Carlson said. “We know our guests are looking for a variety of aesthetics to create their own individual style, and we want to offer them options with each of our new women’s and men’s fashion and accessories owned brands.”