Why Target’s Neiman Marcus deal is good for Walmart too

Walmart and Target were both winners this week as Target announced a deal with Neiman Marcus that makes the distinction between it and Walmart even sharper.



Target secured an unprecedented partnership with Neiman Marcus and 24 designers that solidifies the company’s positioning as the upscale discounter with the differentiated branding statement of, “expect more, pay less.” The two retailers, working with the 24 designers, plan to create a limited edition collection of 60 holiday gift items called the Target + Neiman Marcus Holiday Collection. The products will become available in both retailers’ stores and on their Web sites beginning Dec. 1, at prices ranging from $7.99 to $499.99. Most items will be priced at less than $60.



Target was clearly enthused at the prospect of having its name affiliated with a bevy of big name designers and a department store chain whose premium prices have earned it the derisive nickname of “Needless Markup” the same way “Whole Paycheck” is applied to Whole Foods. Target chairman, president and CEO Gregg Steinhafel, normally an understated fellow, showed little restraint when commenting on the partnership and its implications for the retail industry.



“Target and Neiman Marcus are known for charting new terrain, and by joining forces for the holiday season, we’ve set the stage for a redefining moment in retail,” Steinhafel said. “This collaboration is unlike anything Target has done before, and we are confident our guests will be thrilled with this extraordinary collection that features some of America’s most preeminent designers.”



Indeed. The roster of designers includes some big names that even those with only a passing knowledge of the fashion industry would recognize, including; Alice + Olivia, Altuzarra, Band of Outsiders, Brian Atwood, Carolina Herrera, Derek Lam, Diane von Furstenberg, Eddie Borgo, Jason Wu, Judith Leiber, Lela Rose, Marchesa, Marc Jacobs, Oscar de la Renta, Philip Crangi, Prabal Gurung, Proenza Schouler, Rag & Bone, Robert Rodriguez, Rodarte, Skaist-Taylor, Thom Browne, Tory Burch and Tracy Reese.

While the deal is a win for Target in its relentless quest to differentiate itself from Walmart, the benefits to Neiman Marcus were less obvious and comments by president and CEO Karen Katz didn’t little to clarify the situation.



“Neiman Marcus and Target share a passion for great design and delighting customers in new and unexpected ways,” Katz said. “We are thrilled to be collaborating to offer a spectacular and special collection of one-of-a-kind items for the holidays. These will be the ‘must-have’ gifts, whether you are a loyal Neiman Marcus customer, a devoted Target guest or a fan of American design.”