Is ‘Martha Fatigue’ Possible at Macy’s?

January 29, 2008

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Destination: Wedding – Martha Stewart Collection with Wedgwood Launches in Macy’s Stores – 1/29/08

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For those who love all things Martha Stewart, you will be thrilled to know that she has partnered with Macy’s and Wedgwood to bring Martha-branded china, crystal & flatware to a Macy’s near you (and online).  From this morning’s press release:

NEW YORK–(BUSINESS WIRE)–Jan. 29, 2008–Shopping for those special items to last a lifetime will be a little easier for nuptial-bound couples this spring with the launch of the Martha Stewart Collection with Wedgwood exclusively at Macy’s. This new tabletop line, featuring 10 fine bone china patterns, six crystal stemware patterns, and six stainless steel flatware patterns, is now available at Macy’s (NYSE:M) stores, macys.com and macysweddingchannel.com. 

“I have always been an avid collector of fine china, crystal and silver, and my personal collection includes many Wedgwood pieces I am very proud to own. Our line with Wedgwood offers a range of beautiful and timeless pieces that can be collected and enjoyed for years to come,” said Martha Stewart, Founder of MSLO. 

I absolutely applaud Macy’s strategy of negotiating exclusives with mass-appeal designers like Martha Stewart and Tommy Hilfiger, to name just two.  Target has certainly shown us the power of the excusive deals which positioned them as relevant arbiters of trends – even in a discount environment.  Of course, Macy’s is not Target and is supposedly courting an aspirational customer, including those who may now be shopping at Target.

Macy’s is seeking to make department stores relevant again and this is one of many well-considered strategies they are employing, as well as effectively positioning their own brands (INC, Hotel Collection, etc.), improving the store environment, etc.  

Here’s my question:  Will the consumer (particularly the aspirational customer) ever tire of the next great Martha collection?  

I was shopping in my local Macy’s in December.  I was amazed by the percent of the housewares department devoted to the Martha Stewart Collection.  I did think the Collection was quite good – nice product, effective packaging, good value and quality.  I noticed also the nice chunk of real estate in bedding and furniture devoted to the exclusive Martha products.  And now, the table top department will likely carve out an equally impressive space for the Martha/Wedgwood product.  

My concern is that like anything that seems to be working, stores often find a way to beat it to death. In this case by devoting potentially too much space and crowding out and marginalizing other options. 

The whole idea of “exclusive” in aspirational product includes some level of scarcity.  No scarcity here – you and your entire neighborhood can have the same products in your kitchen (and bath and more).  The mass customer doesn’t mind as much, but the aspirational customers (which Macy’s is trying to court) do care.  They want to feel like what they buy for their homes is a signature of their taste and personality.  Make it look too huge, and this customer will look elsewhere for her kitchen gadget, saucepan, bedding, or china.

A second point particular to the housewares product was that the brand image presented here through packaging, signing and presentation clearly screamed “gift”.  This might help explain the size of the presentation in December, but it makes me concerned for February and beyond.  This gift-oriented packaging and presentation will not play well to customers wanting to pick up a new sauce pan for themselves.

Please, Macy’s.  As you score more of these incredible exclusive deals (i.e. the recent Tommy Hilfiger coup), keep your aspirational customer in mind.  We want the products – but we want them to feel special.  Don’t overdo the presentation or the marketing. 

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

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For the love of a Louis Vuitton bag…

January 24, 2008

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RETAILWIRE DISCUSSION TOPIC

Women Wear Their Wealth on Their Arms – 1/24/08
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TOPIC SUMMARY:

High tickets apparently indicate high fashion, at least where bags are concerned among the mega-rich on both sides of the Atlantic. Whether or not the fad has reached its peak, this season’s must-haves include a couple of bags that are ordered at select parties attended only by invitation. Heaven forbid retailers should expect customers prepared to spend five or more figures to just wander into a store for a browse.

The newest example of the expensive bag genre is one by Burberry, made of alligator skin and selling for £13,000 ($25,737). It’s not as expensive as the Chanel bag with the diamond studded clasp that costs in the region of £100,000 ($197,980) or last year’s Louis Vuitton version that sold out in spite of (or because of?) being priced at £23,484 ($46,494).

For all the show-offs who take pride in owning something that so few other people can afford, there are far more women who are happy to have a large wardrobe of bags that each cost a mere fraction of what their wealthy sisters are flaunting.

There is plenty going on at the less expensive end of the market, however. Whether it be copies sold for pence rather than pounds or eco-friendly bags like those designed by Anya Hindmarch and Stella McCartney, most women can decide what kind of a statement they want to make without taking out an additional mortgage to cover the cost.

Discussion questions: What do you think is driving the trend toward ultra-expensive handbags? Do aspirational purchases represent a bigger opportunity for retailers today than the past? Do you think consumers will back off these types of purchases in light of the current economic climate?

 My post:

Handbags and other accessories continue to shine as apparel makers fail to excite us – largely due to retailers over-saturating us with a few looks how many cropped, 3/4 sleeve cardigans does a woman really need?).  Until that changes, expect the accessories market to remain strong as women will continue to desire a great look.

The trend of wildly expensive 1-of or few-of-a-kind bags has been going on for some time now, driven by brilliant marketing from brands owned by the “big 3” luxury players: LVMH, Richemont, and PPR.  Their careful strategies of real and perceived scarcity, artisan craftsmanship, and celebrity buyers will continue to drive the top-end luxury bag market, as well as inspire the aspirational brands and consumers.   The current economic malaise will not last forever, but purchases of aspirational labels like Coach and Dooney & Burke will not be as robust as true luxury brands like Hermes and Louis Vuitton.  Any drop off from the aspirational buyers of these elite brands will be more than made up by the top end.  Further, unless there is a true and sustained worldwide downturn, I expect markets outside the US to keep these brands growing.

Finally, the nascent but growing luxury bag on-line rental services will ensure that anyone of at least moderate income means can sport a Chanel, a Prada, a Louis Vuitton…

 Mike Osorio, your Dare to be Contagious! strategist www.OsorioGroup.com

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GO TO THE FULL STORY AND DISCUSSION:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12710

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