The fashion industry trades have been buzzing with news about the latest brand linkups with a marquee retailers. One of the latest is Nordstrom’s
The matchup may prove to be a big success, but it does sound a bit like Walmart’s
Jet.com as a source of revenue for Walmart was a flop. The division lost $2 billion in 2019. In May 2020, when Walmart finally shut it down, executives eulogized Jet as the engine driving Walmart’s store branded digital strategy. It wasn’t a failure, they seemed to be saying. It was a learning experience.
The Nordstrom announcement in July was as full of promise as Walmart’s had been in the beginning with Jet. The Nordstrom statement’s headline: “A Game-Changing Joint-Venture.” Nordstrom will have exclusive North American retail and distribution rights for some coveted youth market fashion brands.
Nordstrom President Pete Nordstrom gushed that, “Bringing the Asos brands, including Topshop and Topman, to our customers allows us to create newness and excitement.” Maybe. But what caught my eye in the announcement was the part where the brands retain creative control and Asos — with a reported 85,000 products on its site — gains a store-level foothold in North America.
And then there’s the Target
The Levi’s gambit and a strong 2020 holiday season have thrilled Wall Street. Target’s shares rose about 50 precent between the beginning of March and the middle of July, compared with an increase of 18 percent in the S&P Retail Industry Index for the same period. But the odds are good that Target and Levi’s linkup will come and go without leaving any appreciable impact on the company’s long-term performance.
In my experience interacting with industry executives, these efforts to rev up interest are often flailing attempts to catch a big wave or develop a stronger presence in a particular category, without much research. It’s a reactionary leadership style with executives behaving like lemmings, following each other over the edge.
How many Levi’s-branded pet accessories and home goods can Target really sell? How much profit is there, really, in small-run products, many of which will fail to find an audience? And most importantly, why aren’t major retailers doing the sort of digital product research, for example, that could enhance their goods from both branded vendors and for private label products, which contribute significantly to the bottom line?
The retail industry is in the middle of a historic reshuffling and realignment, each company struggling to reach its customers and the products that interest them enough to open their wallets. Instead, they should be thinking like the Zara’s and the Uniqlo’s of the industry which invest heavily in research to create a unique look and brand that is dynamic and leading, rather than just imitating what’s already out there.