New Kids on the Block
The move by Lord & Taylor - nee Home Outfitters out of Canada - to open a few home superstore tests in New Jersey over the next few weeks has got to be one of the most interesting developments on the retail scene in quite some time.
Home Outfitters, owned by the same Hudson's Bay parent company as Lord & Taylor (they were the guys who also bought Fortunoff out of bankruptcy and ended up liquidating it, but hey, that's ancient retail history), has been variously called the Bed Bath & Beyond of Canada, a moniker that I assume does not sit all that well with the Triple B Boys. Its entry into the U.S. market represents the first real affront to Bed Bath since the demise of the late, usually unlamented Linens'n Things a few years back.
(And if you find a certain irony in the fact that an operation that in shorthand goes by L&T is taking not only the cosmic space but apparently the physical space too of one called LNT, well, just consider it one of those wonderful little ironies the universe is so good at supplying from time to time.)
However, let's not attach too much significance to these openings. Bed Bath is a monster, and if you look at the retailing scene in almost any general merchandising classification, there is just one dominant player left in a space, be it Bed Bath, Best Buy or Macy's. Taking on the big dog is no easy task, and BBB's bark is as ferocious as its bite.
This represents a challenge for vendors who have been selling Home Outfitters programs in Canada similar to the assortments they supply to BBB in the United States. Now that each is moving into the other's territories - Bed Bath has several Canadian stores with plans for lots more - vendors are left with some sticky situations about how to deal with exclusivities and key products.
It will take some sorting out, and while big stores generally don't play very well with other big stores, one would think having the right merchandise that somebody else carries is better than having the wrong merchandise that's all yours.
I've always said that this whole exclusive thing is fine ... except when you consider that the flip side of exclusive is exclusion and if your merchandising strategy is based on punishing suppliers who sell their best selling products to multiple customers, there's something wrong with that plan.
If you remember the original Marshall Field (the person, not the store) quote, it was "Give the lady what she wants," not "Give the lady what you want."
So, we'll see how this whole retail invasion works out. Lord & Taylor is also opening limited home assortments in a few of its core branch stores, following the launch at its Fifth Avenue flagship. As you'll read about elsewhere in this issue, guys like Nordstrom, Neiman and Saks are still trying to find their way in the home business.
Whatever the outcome, new stores coming into the marketplace is a good thing. It's good for consumers, who have more choices. It's good for suppliers, who have more outlets to sell their products into, hopefully opening up assortments. And it's even good for existing retailers, who now have competition to keep them on their toes.
And it's sure going to be fascinating to watch, so that's good for me, too?