Consumer Behavior - "Retail's New Odd Couple"

“Retail’s New Odd Couple”

Group 1Kelly Aranibar, Yasmin Bagha, Emily Bartlett and Nick Cafferky

By: Ann Zimmerman & Dana MattioliSource: Wall Street Journal

Published: July 10, 2012

Background

Summary of Article

• An experiment that “pushes retailing’s boundaries.” • Includes a limited collection of 24 designers

• Prices range from $7.99-499.99, average $60.00

• Products

• Label includes both Target and Neiman Marcus logos.

• Reasoning for partnership

• Gamble for Neiman Marcus

Commercial

Pros

Target

• Partnerships are met with continued success.• Missoni• Jason Wu• Zac Posen

• Competition• H&M and Kohl’s

• Profit

• Exclusive products keep shoppers in stores.

Neiman Marcus

• Products are more accessible to a broader range of customers.• Specifically younger

customers• New target markets

• More consumer exposure for designers.

• Tone down “snobbish practices.”

Cons

Target

• Confusion among customer base.

• Lack of consistency• Pricing

• Lack of awareness• Advertising

Neiman Marcus

• Erode luxury chain’s exclusive appeal.

• Goods must be produced in bulk.• Reduces quality • Reduces demand

for products.

Consumer Perspective

• Cognitive Dissonance

• Social judgment theory

• McGuire’s psychological motives• The need to categorize

• Reference Price

Critique

• Majority of Target customers will think the Neiman Marcus products are too expensive.

• Neiman Marcus could lose credibility among its loyal customers.

• “Hush-hush” approach

• Commercial

• Ultimately, this experiment will erode the exclusivity of the luxury retailer.

Discussion

1) What do you think about this experiment?

2) Which company do you think works to benefit most from this experiment, and why?

3) What do you think about the advertising in terms of the commercial we showed earlier?

4) Do you think this could lead to the future mergers of high- and low-end retailers?

Works Cited