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