brand marketing

RTR Rising: When Retailers Deal Among Themselves

In a 2011 article, I predicted that RTRs (retailer-to-retailer deals) would accelerate even as brand marketers were abuzz about the impact that DTRs (direct-to-retailer deals) were having on the industry. The world of RTRs has branched out in many new directions since that time, and a spate of pair-offs involving strange bedfellows has occurred just within the last month.

While the media debate surrounding the benefits, compromises, and perils involved continues, I prefer to examine an area that is far more relevant to the brand marketing community: the shifts that these deals represent.

A TALE OF TWO BRANDS

The team-up between Neiman Marcus and Target for holiday 2012 will have both retailers carrying and cross-promoting a multi-category program featuring twenty-plus designers, including Diane Von Furstenberg, Rodarte, and Tory Burch. The program will debut on December 1st and run for three weeks in dedicated shops, both within retailers’ stores and on neimanmarcus.com and target.com. The two have obviously taken pains not to upstage one another. So symbiotic is the pairing that even the product labels will feature both retailers’ logos.

The Gist: State of Independence

Target has a well-documented history of forging designer alliances, and didn’t need Neiman Marcus to carry on the aspiration-by-association tradition. In fact, in 2009, Target executed a partnership with Rodarte, one of the designers in the holiday partnership portfolio. Neiman’s could pull off a holiday scale surge without Target simply by opening pop-up boutiques.

The Shift: Brand Determines Fit

This isn’t a retailer-to-retailer partnership fraught with trade-offs and risks. It’s a brand-to-brand alliance. Target pioneered planned-scarcity designer partnerships in the mass channel, but it also ushered in an era of mass retailers becoming brands, rather than just housing the brands of others. This gives Target a major common ground with Neiman Marcus, a retailer whose very shopping bags have carried cache since the early 1900s. Both retailers’ brands stand for exclusivity, curating, discovering, and maintaining a discerning eye in the service of their customers.

THAT’S FRESH!

When Canadian grocery giant Loblaws launched the Joe Fresh apparel brand in 2006, it marked a nervy jump away from its core business. The brand has gone on to become one of the most popular apparel brands in Canada, and recently caused quite a buzz when handful of stand-alone stores hit the U.S. market. The dust from groundbreaking had barely settled when Loblaws announced that it would roll out nearly 700 in-store boutiques within J.C. Penney outlets next spring. Loblaws’ initial plans were to open as many as 800 stores in the U.S., but with the Penney deal in place, stand-alone store openings will be curtailed to a few flagship locations in major urban centers.

The Gist: It’s all Good

For Penney’s, Joe Fresh will be an eye-catching addition to its 100-brand in-store boutique portfolio, acting more as icing on the cake than make-or-break. Meanwhile, Joe Fresh will benefit from the context and cross-shopping opportunities presented in the J.C. Penney environment, while spreading brand awareness that will ultimately drive sales across all of its business models and formats.

The Shift: Scale and Sympathy

Wholesalers and retailers often find themselves at cross purposes, as they leverage different assets and strengths to go after the same customers. Although retailers have traditionally viewed one another as competitors, their fears are increasingly being outweighed by the benefits of working with a kindred spirit offering a new merchandising template. It’s no wonder that several of the new brands that will set up shops within Penney’s, including Joe Fresh, Giggle, Carter’s, and Cosabella, have owned-retail experience. As the retail shop-in-shop momentum marches on, retailers will become the logical tenants. It took Walmart the better part of twenty years, and Target over thirty, to achieve the U.S. scale that Loblaws will achieve in less than two years, thanks to its new alliance. Although British high-street apparel retailer Topshop’s recent partnership with Nordstrom will see it operating within existing departments rather than in walled-off shop-in-shops, it too will realize a far more rapid ramp-up than could be achieved by building on its three-store stand-alone base in the U.S.

GEEK MEETS CHIC

The just-announced teaming of Best Buy’s Geek Squad and Target will have white-shirted, clip-on-tie-sporting Geek Squad “agents” stationed in 28 Denver-area Target stores come October. During the 6-month trial, select Target stores will tap into up to 80 hours’ worth of full-on Geek Squad services, including installation and repair and warranty plans for products such as mobile phones, cameras, printers, MP3 players, e-readers, tablet computers, and home-theater systems.

The Gist: Strength-to-Strength

Target may have cemented its reputation for offering fashion-at-a-price, but the “other fashion,” consumer electronics, still offers a major opportunity area, as consumers trade discretionary dollars between the two categories. Matching blouses to skirts is one thing, but pulling together complex electronics solutions is quite another. Thus, enter the Geek Squad. Best Buy needs many things right now but, on the surface, a service contract with Target wouldn’t seem to be one of them … except for the fact that Target is beloved by women, the fifty-percent-plus of the population that Best Buy has yet to fully woo.

The Shift: Retail in Service

At a time when the Best Buy brand is in a state of flux, from a product-selling perspective, its push into services has been unwavering and, in fact, is the main focus for its next-generation “connected” store format. Best Buy’s most recognized brand happens to be a service, so it makes sense that it would follow the lead of private brand products by migrating, and monetizing, the Geek Squad brand outside of Best Buy’s boxes. Best Buy isn’t alone; a service integration sensation is taking hold across retail. Last month, Target announced a beauty concierge service test in all 28 of its Chicago area stores, and a key component of J.C. Penney’s transformation is in synthesizing service providers into the in-store experience, from fit specialists to baristas, while Sam’s Club has added free health screenings to its member services portfolio.

This article originally ran on the International Licensing Industry Merchandisers' Association (LIMA) website.

Hear, Hear: What Brand Marketers Can Learn from the Voice

I’m addicted to NBC’s“The Voice.” There, I said it. But I’m not alone–the blind-judging song-fest has launched ahead of CBS’s reigning line-up of comedies by a 64 percent margin, is currently the highest-rated network show of the season and enjoys an enviable level of social-media engagement. The show’s better-than-“Idol” talent pool, genre-spanning panel of celebrity songbird coaches, and talent-before-looks hook provide plenty of reasons to give The Voice a listen. Personally, I can’t help but see it as a modern metaphor for brand marketer/retailer dynamics and see several lessons to be learned from the show:

Consistency is King– The Voice’s judges can’t see contestants’ audition performances, and can only hear them. The second a false note, quake or disquieting quirk hits a judge’s ears, their hand retreats from the button that lets them vie for adding the performer to their team. Banal contestants who demonstrate consistency frequently win favor over those who deliver flashes of greatness.

The same holds true for brand marketers. In consumer and shopper marketing, “seamlessness” has become a big buzzword, but as a point of differentiation when working with retailers, it’s an oft-overlooked advantage. Retailers will take their hands off of the brand button if you or your licensing partners are inconsistent in messaging or execution, and particularly if your brand tactics compromise their vision for their brand. Retailers favor safety over sizzle for a reason.

Play the Field – Viewing a single episode of The Voice will make it clear that once one judge pushes a button, the other judges are far more likely to jump in to keep from missing out on grabbing a major talent for their team. From there, the show’s topsy-turvy dynamic has judges competing against one another to woo newly-anointed contestants over. Now, the contestant is in charge as they carefully weigh which judge will have the highest probability of coaching them to greatness.

As retailers move far beyond the core categories that used to define them, your distribution options expand as well. Your initial retail “button pusher” may be a fan but they may not be the best, or the only, choice for driving your rise to brand greatness, so choose carefully and evaluate expansion opportunities on a regular basis. If you don’t put your brands out there, you’ll never know who else might want to jump in.

Rock the Big Reveal– Once a Voice judge presses their button, their chair twists around, giving them a full view of the rest of the contestant’s performance. At this point, judges can either be seen beaming as a fully-packaged star-in-the-making greets their hungry eyes, or attempting to mask disappointment when they behold a fixer-upper. Similarly, once a retailer has made a decision in favor of your brand, it’s only the beginning. Think of your big reveal as when you and your brand partners execute programs under pressure.

Just as there is no shortage of aspiring stars-in-the-making, retailers have plenty of brands vying for their attention these days, including those created by their internal brand teams. Once a retailer puts you in their consideration set, you’ve crossed a major threshold, but your work doesn’t stop there. Will your performance have them congratulating themselves on their choice or going back on the hunt for a fresher face?

This article originally ran on the International Licensing Industry Merchandisers' Association (LIMA) site.