A 380 vs. B 787, a similar debate for retailers
In the 2004-2005 with the price of crude at 70-80 USD per barrel a raging debate was on as what is the future of commercial aircrafts. Is it the mega jumbo A380 by Airbus that can transport 600 + passengers from one hub to another hub or a fuel efficient nimble jet such as Boeing's 787(built with materials used for spacecrafts) that could fly point to point transporting smaller set of passengers cheaper? Two of the largest aircraft manufacturers were betting on two diametrically opposite strategies. A similar clash is on in the retail world as we speak.
Retailers are barely making it out of the slump of the last 18 months that have hit store sales the hardest and they are betting on two diametrically opposite horses. On one hand JCPenney, Kohls, Macy who often carried national brands in their stores are moving to a concept of offering exclusive brands to their customers. For example Liz Clairbone is only going to sell exclusively at JCPenney; Dana Buchman at Kohls and Tommy Hilfiger only at Macy's. On the other hand Edward Lampert CEO, Sears Kmart is betting on selling exclusive/proprietary brands such as Craftsman and Kenmore outside of Sears for the first time in its history.......
The 'xclusive' corner is citing that shoppers that are loyal to the brand will follow the brand to the store that it is offered in. JCPenney has an increased focus on the 25 to 45 years woman who is style savvy and yet wants to pay the 'right' price, hence the belief is that it will be able to attract a larger percentage of that persona who shop Liz Claiborne to JCPenney. From a Liz Clairborne perspective their cost of marketing, sales and merchandise planning will dramatically go down as they do not have to deal with the army of sourcing and merchandising associates of multiple retailers but focus on better synergy and planning with JCPenney. The only thing to worry about is, will Liz Claiborne be able stand out amidst the 12 private 'power brands' and several other national 'destination' brands at JCPenney?
On the decommissioning of 'xclusive/Proprietary' corner the reason being cited by Sears is that by allowing sales of their marquee exclusive brands such as Craftsman and Kenmore at other retailers such as ACE would allow them to reach a wider range of customers resulting in a significant upside. The risk for Sear-Kmart however is that, this strategy can potentially decrease the number of footfalls in the store. Will this result in diluting Sears as a 'destination' for shoppers who are seeking Kenmore and Craftsman?
Who do you think will win in this battle of 'xclusive or not 'xclusive? BTW how many 787s and A380s have you seen let alone flown, in the last year?
