This holiday season, the focus is on exclusivity

3 Comments | This entry was posted in Holidays, Marketing, Retail Companies

Last Saturday was a big day. It marked the debut of the Target + Neiman Marcus Holiday Collection, a partnership between two highly regarded retail brands – one a mass merchandiser, the other a luxury purveyor — that will bring more than 50 limited edition designer products to each company’s stores.

The items, ranging in price from $7.99 to $499.99 and consisting of clothing, handbags and home goods, were created by 24 Council of Fashion Designers of America designers and include the likes of Tory Burch, Marc Jacobs, Alice & Olivia and Robert Rodriguez. A few weeks back Good Morning America gave shoppers a sneak peek at a few of the items, including a yoga mat in a black and white print from Diane Von Furstenburg that will retail for $49.99, a set of four printed dessert plates rimmed in 18K gold from Tracy Reese tagged at $39.99 and a little girl’s dress from Jason Wu (one of the First Lady’s favorite designers) priced at $59.99.

Target, which has had its share of success with curated designer collections in the past, will surely benefit from the added designer buzz this creates. Neiman Marcus hopes to see masses of people stream through the doors – some of whom never thought they could afford to purchase an item at the high-end retailer. But what really stands out for me is that the two retailers are using exclusive products – not discounts — to drive shopper traffic and lift spending.

I love that two retailers are collaborating. I love that they consider this a “once in a lifetime” occurrence and have made that clear to shoppers. I love that they’ve created retail excitement around product and made it accessible to so many. And I especially love that price is not the first thing they’re talking about.

Over the last few weeks retailers have unabashedly been playing the price card. Hoping to entice savvy shoppers, they’ve offered great deals on hot items and pulled out all the stops with one-of-a-kind bargains. Judging from the results reported to date, merchants have succeeded wildly.

Still, I’ve always believed that if a retailer wants to leave an impression in the shopper’s mind, offering 20, 30, even 40 percent off was not the best way to do it. Having exclusive merchandise and making a commitment to deliver services or a customer experience that is somehow memorable are means of building shopper loyalty without squeezing margins. Do you need to compete on price? Of course you do, but that can’t be the only hand you play.

Consider Toys “R” Us. Earlier this year the toy retailer announced Tabeo, an Android-powered 7-in. tablet designed specifically for kids — and exclusively for Toys “R” Us. With 50 free, pre-installed apps that were carefully selected to entertain and educate children while helping them explore the Internet, Toys “R” Us endeavors to grab a piece of the electronics market that is theirs alone. In the super price-sensitive toy arena, they stand out with exclusive product. It’s not a first for Toys “R” Us: The retailer dubbed the toy authority also sells rare and collector edition Barbie dolls, limited Lego lines and proprietary products.

Banana Republic, which has boosted sales through exclusive partnerships with Mad Men, designer Trina Turk and most recently the Anna Karenina-inspired collection based on a collaboration with the film’s costume designer, has benefited nicely from providing shoppers with items that stand out from the masses.

The Gap Inc. brand recently announced the 12 Days of Joy promotion intended to give customers “something extra” – and to keep the momentum going beyond Black Friday. Banana Republic will give away makeup from Benefit Cosmetics and a 20 percent discount voucher for a Virgin America flight. There is also an opportunity to enter a contest to win one of six Fiat 500 automobiles. It’s not all about exclusive product, but it’s also not all about discounting.

Another interesting strategy some retailers are using to entice shoppers – and keep discounting at arm’s length — is serving up food and drinks. Terrain, a division of Urban Outfitters, recently served lamb merquez and striped bass at two of its shops. JC Penney plans to tap into the entertainment value of food in its new prototype stores by replacing cash registers with coffee and juice bars – even a gelato shop. Banana Republic served hors d’oeuvres and cocktails at the introduction of the Anna Karenina collection, and Ann Taylor’s Loft division hosted Friday happy hours at the Rockefeller Center store in Manhattan during the summer.

Competing on price all the time is not sustainable. Exclusive products, services and enhanced customer experience are terrific ways to entice consumers and to create memories that will be warmly recalled and shared with friends and family.

Posted in: Holidays | Marketing | Retail Companies and tagged ,


  1. Posted December 6, 2012 at 2:41 pm | Permalink

    Great post Susan. This topic is a critical one. In addition to retailers creating unique products of their own, manufacturers/brands may find it in their interest to help preserve a healthy diversity of retailers by expanding SMU offerings and limited, time-based exclusives that they make available to their retail partners. And just to amplify your comments about how unique products can be an alternative to discounting, it’s the ultimate antidote to “show rooming” as well as more conventional price shopping as you say. And lastly, unique products are also a way to shield retailers from competitors that use non-retail revenue streams to subsidize low prices. As Amazon told Ad Age on 10/8/12, it is using the revenue from its Product Ads program to subsidize it’s low prices. Most retailers don’t have a similar program to subsidize their own pricing, with the result being that Amazon captures the low cost position in almost every case where they are in head-to-head product competition with conventional retailers.

  2. Posted December 6, 2012 at 3:12 pm | Permalink

    This is a great article and we at First Insight agree with your assessment. In particular this statement really resonated with us:
    “Still, I’ve always believed that if a retailer wants to leave an impression in the shopper’s mind, offering 20, 30, even 40 percent off was not the best way to do it. Having exclusive merchandise and making a commitment to deliver services or a customer experience that is somehow memorable are means of building shopper loyalty without squeezing margins.”

    However, one big question still remains: How do retailers and brands know which exclusive items/lines will resonate with their customers?


    Greg Petro

  3. Posted December 14, 2012 at 12:31 pm | Permalink

    It’s more work, but I think brands would be better served trying to understand their customers’ behavior at a finer level of detail (e.g. who is buying which products? what customer segments exist?) and personalizing marketing towards that. An exclusive doesn’t need to be appealing to all of a brand’s customers, just a passionate subset. The future is identifying what each customer segment will get excited by and running campaigns targeted to them individually.

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