The odd couple

Discount retailer Target and luxury brand Neiman Marcus are partnering to offer a collection for the winter holidays.

http://bit.ly/MXwp5D

It’s an interesting marriage because it appears counter to the conventional approach to strategic partnerships, which typically seeks more synergy between the partner brands’ audiences.

While this is a relatively new strategy, Target reports that similar partnerships with designers have previously proven successful, at least for the mass-appeal retailer. That seems inevitable – budget shoppers given the opportunity to engage with brands usually outside of their price range.

But what does that do to the high-end brand? On the upside, a short term spike in sales and an introduction to a new audience. But surely this strategy puts the premium positioning of the brand at risk over the longer term. After all, a high-end consumer with the means and inclination to indulge in luxury brands will drop it like a hot potato and never go back if they see it on the shelves of a discount retailer – after telling all their (label-savvy) friends.

This strategy may make sense for a high-end designer label looking to effect a long-term change in market positioning to appeal to a more mass market audience. This is highly unlikely ever to be the case though. Either way, the big mass appeal brands win.

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