Kai Ryssdal: Here’s today’s sentence that has never before been said on the radio: There will be at the end of this year, a joint Target and Nieman Marcus Holiday Collection. Big-box and high-end, all in one convenient location.
Cognitive dissonance is the word that came to my mind when I heard about this this morning. So we called consultant Debra Kaye to get a little perspective. Welcome to the program.
Debra Kaye: Thank you very much.
Ryssdal: So this comingling of brands — Target and Neiman Marcus — what do you suppose is in it for them? What’s in it for Target first of all?
Kaye: Well for Target actually it’s quite brilliant because what they are doing actually is they are showing that they have even more upscale quality because what they now have in their stores is now in high-end stores as well.
Ryssdal: And so what then, is Neiman Marcus now dumbing down? Can you read that into it?
Kaye: No, I don’t think so at all because what Neiman Marcus is recognizing is what culture already does. Everyone knows that high-end consumers are shopping in Target and are shopping in Neiman Marcus. And so what Neiman Marcus is saying is we recognize you already do it, we’re making it easier for you.
Ryssdal: Yeah, but I’ll tell you what, I’m a Target shopper, but I kind of get the willies when I walk into a Neiman Marcus because, you know, I sort of don’t belong there.
Kaye: That’s right, you do, you get scared. The reason you’re scared is not because you think they have higher prices — because everyone knows all stores have all prices — but because you think they are going to treat you badly. But now that you know that they have the same items as Target, they welcome the same kind of people as Target, you’re not afraid of them anymore, so you’re more likely to go in their stores. It’s a really good traffic builder.
Ryssdal: You think so?
Kaye: Yeah, I really do. I think culturally it breaks all barriers and says, ‘hey we get it, we get that you shop high and low, and we welcome everybody.’
Ryssdal: Do you think we’re going to see more of this then? I mean, it can’t be that easy.
Kaye: Well, who knows if it’s going to be easy, right? If it does work, what I think we can look forward to, is to see high-end stores have, you know, little special stores of H&M in their store or little special stores of other discount merchandisers in their store, so that they can build traffic. I mean have you walked into a high-end store lately? You can throw a bowling ball down some of those stores and not hit a person. They really need to build traffic and I think this is a great way to do it.
Ryssdal: Yeah. Does the fact that these two are not really competitors make this possible?
Kaye: Well obviously because they are not direct competitors, but I also think it’s something else from Neiman Marcus. Remember, Target has what like, many thousands of stores? And Neiman Marcus only has 42. Neiman Marcus really can’t afford TV advertising and Target can, so what this does is it gets Neiman Marcus a mass market audience at probably half the price because they can share TV costs with Target.
Ryssdal: This kind of seems like Neiman Marcus puts itself at peril and people are going to see Neiman Marcus stuff at Target, so why do we need Neiman Marcus?
Kaye: That’s a really good question, but I think that’s an old fashion question [laughs]. And I think it’s an old fashion question because if you don’t keep refreshing yourself, in 10 years your business is going to die, so you’ve got to keep trying new things and that’s what they’ve done here.
Ryssdal: So are we now going to see Cartier and Zales cross-promoting each other? I mean, cubic zirconium and 14 karat diamonds?
Kaye: I don’t think so, I think that’s crossing the line too much. I don’t think you are going to have one diamond ring on one hand and another fake on the other. I think that’s a little bit different [laughs]. But I do think, we have seen people mix really high-end suits with a J.Crew t-shirt — that’s what this is all about.
Ryssdal: Alright, Debra Kaye, her consultancy firm is called Lucule. Debra, thanks a lot.
Kaye: Thank you very much.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?