Images courtesy of Target, Neiman Marcus and Time Warner Cable.
Last week’s news of the Target/Neiman Marcus partnership no doubt had every girl twirling with glee around her 5th floor walkup.
The announcement that on December 1st, Target and Neiman Marcus are coming together to offer 50 products at both stores designed by 24 designers who are members of the Council of Fashion Designers of America (CFDA), had me on Target’s website buying camping equipment faster than you can say Marc by Marc Jacobs. Come November 30th, I will be among thousands of girls who will be camped outside the stores with visions of Alice + Olivia, Prabal Gurung, Jason Wu, and Diane von Furstenberg dancing 'round in our heads.
It’s a brilliant move for two well-established and very different brands. Why?
Think Carrie Bradshaw.
Late Gen-Xers/early Gen Y-ers were in our late teens or early 20s when Sex and the City debuted on HBO. Every Sunday night, our eyes were glued to the screen as we watched our favorite 30-something parade around Manhattan in the most coveted designer duds known to woman.
With each episode, we believed more and more that you could live in the city and afford the finer things in life on a next-to-nothing salary. So much so that when we finished college, we moved to the city and got apartments that were the size of Carrie’s bathroom, for triple the price.
And because we had developed a “need” for things designed by Louis Vuitton and Chanel, we didn’t mind the months and years of ramen noodles we had to stomach to satiate our appetites for tasty designer morsels. We had champagne wishes and caviar dreams...until the credit card statements arrived, and reminded us that reality was less like Sex and the City, and more like Confessions of a Shopaholic.
We became a group of girls with killer collections of Manolo Blahniks and Jimmy Choos but we were stifled by debt. We learned that we could NOT have it all, so we learned to compromise.
In the book titled Trading Up, the authors discuss how middle-class consumers would distort their spending habits to buy luxury goods that were significant and meaningful to them. The author went on to co-author a second book, Treasure Hunt, where it was discussed that "trading-up" was only one facet of the middle-class buying behavior--trading-down was the other, thus killing the middle market retailers.
There have been a number of studies and books written since, exploring the consumer behavior of the middle, upper-middle, and elite class buying behavior, most of which identify the love that all segments share for Target, Costco, Barneys New York, Neiman Marcus, Nordstrom, and Saks Fifth Avenue.
And what did we do? We traded in our daily purchases at luxury department stores and boutiques for the designer collaborations we found at Target and H&M. We stood in line all night long to beat the rest of the girls trying to nab one of the Proenza Schouler dresses or Luella blazers that were part of Target’s Go! International collection. We sustained (and often inflicted) injuries as we clawed our way through the racks of Madonna and Lagerfeld-designed apparel that were being ransacked at H&M.
As a happy accident, designers that have embarked on collaborations with mass-market retailers have created loyalty among a highly influential set of fashionistas. These girls purchase the products because they like the idea of being affiliated with the brand and most importantly, because they get to be one of the lucky few that earned bragging rights for successfully walking out with the uber exclusive product. And those bragging rights have made them brand evangelists, even though it will likely take them seven to 10 years before they can afford to purchase the actual designer products on a regular basis.
The exclusivity that these collaborations have offered has become a different kind of currency. Today, you get more street cred if you are one of the few that got hold of one of the designer collaboration pieces at Target than if you were to have blown your entire paycheck at the designer's boutique. Sure, young fashionistas still aspire to own products designed by Stella McCartney, Versace, Missoni, and Zac Posen, but they would rather have the ultra-exclusive bargain version and be able to make next month’s rent.
And the fashionistas aren’t the only ones that are benefitting from these collaborations—the designers have been able to expand brand awareness in new markets. As noted in Eric Wilson's 2011 article in the New York Times, "Perversely, selling clothes at Target has become a status symbol for up-and-coming designers. 'The model has changed in a way,' said Gaby Basora of the Tucker label, who designed a collection for Target last year. 'It used to be that you went mass toward the end of your career. Now it’s more of a legitimizing moment for younger bands.'"
Target’s partnership with Isaac Mizrahi, one of their first designer collaborations, was incredibly successful for both brands, tripling in volume over five years to $300+ million. Moreover, it introduced Mizrahi to mainstream America. Many believed it was a step down for Mizrahi, but he viewed it differently. As he told the Wall Street Journal “You’re not selling out, you’re reaching out.”
While Target is no stranger to designer collaborations, I think that Neiman Marcus entering this partnership is brilliant: they are playing into the behavior and spending habits of their current and target (no pun intended) consumers. I think they have taken the time to understand their customer mix, and in doing so, they are evolving the Neiman Marcus brand from elusive to exclusive, a subtle distinction that many luxury department stores are realizing.
I can't help but wonder...will this be a win-win for both parties, or is one side getting more out of this relationship?
Lara Marrero views shopping as both an art and a science. Her education in marketing and psychology combined with her love of boots, bags, and baubles, arms her with unique insight into retail and ethnographic trends. Working with Gensler’s strategy and design teams, she helps inform the design process through research, trend analysis, and her knowledge of brands and consumer needs. Lara is a senior associate and the marketing manager in the Los Angeles office. You can contact her at email@example.com.