Neiman Marcus & Target: A glorious failure

“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”

-  Samuel Beckett

If you pay attention to this sort of thing, you know that several months back Neiman Marcus and Target made a big splash when they announced a partnership to jointly market a limited collection of fashion items for the holidays. This announcement was followed by a lot of PR hoopla and a high-profile television and social media advertising campaign.

And guess what? It was a bust.

The product offering failed to generate the sales frenzy that past designer collaborations from Tar-zhay have, and the merchandise has been marked down 50 – 70%. The media are now out with their post-mortem bashings, many taking the “I knew it was a bad idea all along” route.

Having previously led strategy and corporate marketing at Neiman Marcus for several years, I’ve gotten plenty of questions about my take on the strategy and its execution (NOTE: full disclosure, I remain a Neiman’s investor). Frankly, I think much of the criticism misses the mark entirely.

Clearly, a lot of the execution was messed up. Prices were generally too high, designer brands were extended too broadly and some of the product was just plain goofy: a $50 Rag & Bone boys’ sweater? That was never a good idea.

Big picture, however, the concept was fundamentally good for both Target and Neiman’s. Target is well-known for enhancing its fashion cred with such partnerships; so for them, this was a no-brainer. If they made any money on it, all the better. But the real value is in brand enhancement.

For Neiman Marcus, the strategic value may be less obvious but, in essence, their foray into “mass-tige” is no different from Karl Lagerfeld or Jimmy Choo doing their special offerings at H&M. The goal is to generate buzz and expose their brands to a demographic that they need to cultivate for the long-term. Forging a longer-term and/or more broad partnership would be dumb. But experiments, such as what was tried here, can be shrewd moves indeed.

Which brings me to my last point. What gratifies me the most is that Neiman’s actually tried something bold and, arguably, counter-intuitive. Neiman Marcus’ last CEO–and my former boss–Burt Tansky was a brilliant merchant and remains a luxury and fashion industry icon–and rightly so. But he was hardly a risk-taker and fundamentally not wired to say ‘yes’ to strategic innovation. Kudos to Karen Katz and her team for being willing to push the envelope.

It’s so very easy to label something a failure after the fact and to castigate management for its ineptitude. The far easier path for leaders of course is to never try. You rarely get criticized for the things you didn’t do.

It’s a terrible strategy to eliminate the possibility of failure. Great companies and great leaders are not characterized by an absence of failure.

Without trying, there is no growth. Without failure, there is no learning. The key is to fail better.

So was the Neiman Marcus and Target partnership a failure? In the immediate-term, definitely. But the overall grade from where I sit is “Incomplete.”

If the lesson Neiman Marcus takes away from this project–and it is a project, not a strategy–is to pull back on innovation, to stop experimenting, than it will be a huge waste of time and resources. If it strengthens their resolve, if they apply their learning to improve the process of innovation, than it will be the most glorious of failures.

8 thoughts on “Neiman Marcus & Target: A glorious failure

  1. Outstanding blog – we all need to take a moment to analyze the concept of “risk” as it
    relates to our work.
    I am attending CBRE University this week and, as an industry veteran, embrace the opportunity for growth and learning. Part of the lifelong learning curve is to look for different ways of looking at the same topic.
    Rest assured that I will be mentioning your blog to my peer group.
    Thank you for the stimulating thoughts.

  2. I was curious to see where this retail collaboration would end up. As a former employee of both I thought it was an interesting idea for them to team up and see what the general populace thought of it all. Evidently not much, although I agree that it was a good thought. Perhaps the items they offered should have been better thought out. Although Target is a more fashionable option than WalMart, customers are still looking for bargains and $50 for a sweater (from Neiman’s collection or not) was a pricey thing, especially this season.I saw the offering at my local store and must admit I cringed a bit. I’m glad that Karen Katz is taking steps to spread the attraction of Neiman’s and partner with other retailers. Perhaps their next attempt will be a smoother and more attractive pairing of merchandise. Target was a great choice. Hopefully they will do this again.

  3. Pingback: Analysis of Target + Neiman Marcus collaboration | Biz Beat Blog

  4. I was just discussing this very topic New Year’s Day with my favorite shopping partner in crime, my stepmother…we both are major supports of both Target and NM. Steve, I think you hit the nail on the head with your comments. Kudos for highlighting the need for innovation and celebrating retailers who are experimenting with risk. Today’s retail landscape would benefit from more excitement.

  5. To me as a shopper it was not a failure. Granted I had several “Are you kidding me” moments with co-workers who could not understand why buying a Judith Leiber compact at $59 was a steal and they needed to get one ASAP. Most Target customers are not familiar with the names that were used in the collection. I think if Target had supplied only those stores in neighborhoods that had a higher income brackets they would have been a bit more successful pre markdown. Also some of the designer offerings were well ridiculously pretentious. Pet supplies and cookie cutters? $80 to $100 dresses for kids, a $100 skateboard by someone not known in the concrete surfing circles, dresses not cut for women who don’t spend hours in the gym (a size 14 was really a size 10). And prices that did not scream mainstream just coming out of a recession so splurge a little (except for the Judith Leiber). I will say that I liked the collection and I bought the things that I wanted at 50% off not at 70% which to me means that 50% should have been their price point. It may have been a “failure” but my pocketbook was happy for the post hype deals.

  6. Just reading this and wanted to add a late post. I am a fairly well dressed middle aged, upper middle income woman who buys a significant amount of her casual wear at Target. The day I read about the Target/Neiman’s partnership I went to Target certain I would come home with some great buys. The products offered were ugly. Badly designed and made. Here’s my theory as to why. Target is always hit and miss from a design perspective, but it does best when it sticks to simple – T-shirts, jeans, sweaters that riff on classic models. Neiman’s is at its best with the outrageous. I bought a beautiful bowl there once made entirely of pine straw. Somehow the two partners played to each others’ worst charactetistics rusher than their strengths. I’d love to see them try again, but this time forget the silly die-cut blouses. Do things with color and fabric choices rather than gimmicks. Maybe that means choosing different designers, maybe it means different objectives. Let Target choose the product and put Neiman’s in charge of producing it, rather than the other way ’round.

  7. Pingback: My Top Ten Blog Posts of 2013 | Steven P. Dennis' Blog

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