retail news in context, analysis with attitude

More discussion of the issues raised by Target's decision not to carry the new Beyoncé album. Its objection was to the record company's move to release the album for one week exclusively on iTunes, which it said would hurt its sales.

While other retailers (like Walmart) will carry the album, I said that Target seemed justified, if only because it is looking for ways to differentiate itself, not just carry stuff that everybody else is carrying. (I don't think this is the only approach, but it seems like a reasonable strategic decision to me.)

One MNB reader wrote:

Kevin, I don't understand the  vehement criticism of Target for deciding not to carry the Beyonce CD. 

I think they were looking more at the long-term value of the Target brand than they were for this month's short-term sales. 

Part of a retailer's brand is its selection, so why should it carry everything that others are also carrying? Where is the brand distinction in that strategy? When you chase everyone, you're more susceptible to price competition. For example, Costco and Trader Joe are both very successful with their limited selections, they're certainly not chasing everyone.

It's so much more difficult for any brand to choose which customers NOT to pursue than it is to choose their intended audience. There's so much fear associated with that decision, especially with too much emphasis assigned to short-term results and the stock price instead of long-term brand equity.  

Yes, I understand your readers who say "if you don't have it, then I'll just go to your competitor." But that's ok, as it's better to not chase everyone in the long-term.

From another reader:

Several years ago the food and drug retailer that I worked for refused to stock Eveready Batteries because Eveready had an exclusive agreement to sell bonus packs to Costco/Price Club and would not sell the same bonus packs to the traditional retailer.  That retailer is still very much alive and doing reasonably well.  A business can make marketing decisions based on principal and continue to grow.  Target needs to make their decisions on what they believe is the best options to serve their customers and maintain their competitive position if that is demanding equal treatment from vendors in all channels then that is what they should do.

I pointed out that I'm aware of times when retailers such as Stew Leonard's and Costco have not sold Coke or pepsi products, and explained via signage that they were not able to get what they thought was an appropriate price … and that in my mind, this gave the retailers credibility as being advocates for the customer, not sales vehicles for the manufacturer.

But MNB reader Ken Wagar disagreed:

Kevin, I understand your comments above and went through the cola wars years ago and watched various retailers throw out Coke or Pepsi. I can even agree that some of them were doing the “right” thing in terms of trying to get a better deal for their customers. The problem is that we who have been in this business for years and understand these situations are far from “average consumers” and we need to be careful when thinking that the majority of consumers will understand these situations like we do.

My opinion at the time was that in spite of understanding what they were doing and why, it was still foolish to penalize their shoppers by not carrying such heavily demanded items.

Another MNB reader chimed in:

I think Costco had a spate with Apple awhile back…..

Seems both are doing well without each other, hmmmmm.

What play do you want to make strategically?

Sometimes you have to fire a shot across the bow to get the others attention.

Good for Target, might not make a difference in this case, but others may notice.

Again, I'll go back to this morning's Eye-Opener … because I think this is exactly what Whole Foods is doing with Chobani yogurt.

I wrote a piece criticizing Toys R Us the other day, prompting one MNB reader to write:

Kevin, does it strike you that Toys-R-US is another Blockbuster……or Post Office?  Ironically, they are unlike Babies-R-US, whom I believe is losing their relevance at a slower pace…


And, I mentioned yesterday that a New York Times piece praising Best Buy's recent moves might actually get me to go there, but one MNB reader attempted to dissuade me:

You may think about going into Best Buy because of the article. Going in you will discover that the sales staff is more interested in socializing with one another, the staff has marginal knowledge and the product selection is poor. Go in and look for a 3.5 mm double male connector (like you need to hook up your iPod to your car radios input) and all they have is 30-35.00 overpriced cables. You can buy what you need for 5.00 at Amazon and have quite a few to choose from.
KC's View: