Target’s Neiman Marcus flop
Target has carved out a successful niche for itself as the upscale discount alternative – the place for people who want a bargain, but don’t want to shop at Wal-Mart.
Over the years, high-profile partnerships with designers and labels such as Isaac Mizrahi and Missoni have helped solidify that reputation with launches that resulted in long line and sold-out merchandise.
That’s why the company was so optimistic about its collaboration with Neiman Marcus and a bevy of well-known designers for the holiday shopping season – a collaboration that ended up being a resounding flop.
So what happened – and what can we learn from it:
- The prices were outside the Target shoppers’ comfort zone. One of the things that made the previous ventures successful was that they were priced at (comparatively) bargain levels. This time, analysts said prices (like a $69.99 trinket box or $39.99 iPad sleeve) simply weren’t the bargains the Target shoppers expected. The takeaway: Know your customers and their budgets. If you’re going to make a new boat line or accessories, make sure it’s not too much of a stretch – unless you’re ready to market heavily to attract an entirely new audience.
- The designers – known for clothing – were instead tapped to design items like the aforementioned boxes and sleeves, not to mention yoga mats. These aren’t the products that make these names popular. The takeaway: Brand matters, but so does product. Slapping a popular name on something won’t move the product if it’s not something the buyer already wants or needs.
- The displays didn’t work. Many critics said the items weren’t displayed or properly promoted within the store. The takeaway: This one’s easy. If your showroom or retail store is a mess, it’s going to turn off customers. Location is key in moving product.
- Both Target and Neiman Marcus insist the promo wasn’t a flop and that they moved most of the product. (Of course, much of that came after the collection was discounted by 50 and then 70 percent). The takeaway: Perception is reality. No matter what Target and its partners say, the collaboration will be seen as a failure because that was the narrative that was established from Day 1 when it didn’t live up to the much-hyped expectation. Don’t spend weeks bragging about how you’re going to blow out sales at your boat show, for instance, if you’re not sure you’re going to do it.
Target execs tell Forbes they’ve learned from the mistakes and are ready to address them in future endeavors. They’re not letting one high-profile mistake scare them away from other partnerships. So that’s probably a good final takeaway: Don’t let one mistake scare you away from taking smart risks.