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The World of Exclusivity

The World of Exclusivity
The strategy of exclusivity, which has been a key retail marketing approach over the past decade, has become even more important and still offers significant growth opportunities for brand licensors and retailers worldwide. In

The strategy of exclusivity, which has been a key retail marketing approach over the past decade, has become even more important and still offers significant growth opportunities for brand licensors and retailers worldwide. In fact, exclusive merchandise may be the most important impetus to drive consumer purchases during current sluggish economic times and the threat of yet another recession.

Exclusive merchandise will likely define success for retailers not only during the critical upcoming holiday season, but also for 2012 and beyond. Several recent marketing promotions provide valuable insight into just how important the strategy of exclusivity has become.

Target's recent launch of its exclusive Missoni fall collection not only sold out within hours of store opening, but also caused its website to come to a crashing halt.

Toy's 'R' Us announced in mid-September that its key marketing strategy for the holiday season will focus on exclusive products. The specialty retailer released a 44-page catalog that showcased 350 exclusive products.

Sears, which has several prominent brand names in its portfolio, announced a partnership with Costco to sell its Craftsman brand tools.

Petsmart has partnered with Martha Stewart for an exclusive line of toys for dogs and cats.

Kohl's, which has had great success with many exclusive brands over the past several years including Bobby Flay housewares products, Candies and Jennifer Lopez and Marc Anthony apparel, will also be the exclusive retailer for VF Corporation's Rock & Republic brand, set to launch in spring 2012.

Macy's, in partnership with Iconix Brands, launched the Material Girl brand with Madonna and her daughter.

Other retailers focused on exclusive product include drug chains Walgreens and CVS, home specialty retailers Home Depot and Lowe's and electronics retailer Best Buy. For many of these retailers, exclusive brands may now represent more than 50 percent and as much as 80 percent of its product offerings, which is far more than it was a decade ago.

There is no doubt that the changing dynamics of exclusivity is forcing licensors and licensees to rethink brand strategies. Brand licensors must embrace this retail world of exclusivity and let go of the false assumption that it doesn't apply to or impact their specific brands. In addition, there will be even more brands competing for retail shelf space. These brands will include more traditional brands with strong global cache, celebrities (especially those with a strong fan base), distressed brands that still have widespread appeal and even existing retail brands that could be licensed to other retailers worldwide.

  • New categories–Think beyond the traditional or obvious product categories, which is often discussed, but rarely executed. For example, new multi-platform opportunities exist in apps, e-books and digital media.
  • Co-branding–If Hello Kitty and Kiss can develop a collection of products in various categories, then the opportunity for other non-traditional partnerships clearly exists.
  • Pop-up stores–With the availability of prime real estate at attractive prices, the opportunity to open brand specific exclusive retail stores is even more attractive than it has been in previous years. And they don't always have to be brick and mortar.
  • Social media–The opportunity exists for any retailer or licensor to build a strong audience on social media networks with the ability to purchase merchandise directly.
  • New markets–There is significant opportunity for brands that might be considered mature in one country, but might be new in another country. Well-established properties such as Peppa Pig, Pocoyo and Winx Club have all made a strong entry into the U.S. market. Meanwhile, Iconix is aggressively expanding several brands including London Fog, Candies and Badgley Mischka in China, which has a strong penchant for western properties.

The strategy of exclusivity is more prevalent than ever. While it will continue to evolve and change the business dynamics among retailers, licensors and licensees, it will also create new opportunities for brand development and growth throughout the world.

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