You Say Exclusive, I Say Exclusion

The Robin ReportWe are right smack in the middle of a massive wave of exclusive merchandising. You can’t swing a dead hang tag these days in any decent sized store in the country and not find some brand or label (and they are two very different things, you better believe) that isn’t available anyplace else.

They can be brand new brands like Material Girl — the Madonnaized program at Macy’s (M) — or names going around yet one more time, like Liz Claiborne at Penney (JCP).

They can be well-known personalities such as Martha Stewart – here, there and many wheres — or head-scratchers like Jaclyn Smith at Kmart (SHLD). They can be meaningless like Canopy at Walmart (WMT) or totally meaningless like Whole Home at Sears (SHLD).

Companies like Iconix (ICON) have more than two dozen individual names available and if you ask real nice we’re sure they’ll come up with one just for you.

There are private labels, house brands and captured names, not to mention restricted, conflicted and afflicted brands. And you know what? Many times in many cases for many stores, the whole thing makes a lot of sense. For all the obvious reasons, it’s good to have stuff that nobody else has.That is, with one very huge proviso: It has to be stuff that somebody actually wants.

And that’s the part of this whole exclusive thing that I don’t think a lot of merchants take into account when they plan out their merchandising strategies.

All of that exclusive merchandise not only has to be good, it has to be better than the stuff excluded to make room for it.

So, if you’ve dropped Wamsutta solid color sheets because many of your big competitors are carrying them too and then replaced them with Wally’s solid color sheet program, maybe that’s exclusion. You’ve stopped carrying one of the longest-running, best-selling solid color programs in the history of the home textiles business and replaced it with a brand nobody’s ever heard of, created by people who were probably designing underwear three weeks ago and not supported by anybody else anywhere.

Hmmmm?

Not only that, but when you think about it, it’s totally inconsistent with retail strategies at the corporate level. Look at Macy’s – I don’t mean to pick on them but they really are becoming the poster boys for this sort of thing. When Macy’s decided it needed the strongest brand it could support, out went Burdines, The Bon and all the rest. In came one name: The name that everyone knew, the one that could be broadly supported, the one with the parade and the Miracle on 34th Street and all the rest.

That was a smart move and I think it will ultimately pay off for the company and in fact probably be the savior of the Great American Department Store. But then to take those 800 stores with the same name and put in lame brands that sound like B-List Italian movie stars just doesn’t make sense. I don’t get it.

Car manufacturers came to the same conclusion that Macy’s did about the big picture. Instead of trying to support multiple brands that had increasingly fragmented customer bases — not to mention decreasing ad and marketing budgets – they made the decision to consolidate around their strongest brands… the ones people really wanted.

Too many retailers today are practicing the politics of exclusion when they go for exclusives. By laboring over private labels and avoiding the obvious choices, they run the risk of selling what they want, not necessarily what their customers want.

Look at Sony. This is a brand you can buy in all sorts of retail channels, from the neighborhood Duane Reade to the most exclusive and expensive home theater specialist in town. The consumer gets Sony (SNE). The consumer wants Sony. (And by the way, whatever problems Sony is having these days has a lot more to do with its product development than with its distribution strategy.)

When department stores were just becoming department stores around the beginning of the Twentieth Century, a fellow by the name of Marshall Field – maybe you heard of him? – had a pretty simple strategy: “Give the lady what she wants.”

Without exclusion…except for the rather obvious one of Marshall Fields’ name no longer on the store. Macy’s took care of that too.

Warren Shoulberg is the editor of a leading home furnishings business publication and has been writing about retailing and the home business for longer than he cares to admit.

Warren Shoulberg About Warren Shoulberg

Warren Shoulberg is editorial director of several home furnishings magazines for Sandow Media and has been reporting on the home business for a long time. He is currently working on his next book, Stupid Business.