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Interesting piece in USAToday about how retailers are teaming up and combining complementary brand strengths to try and improve their strategic positions for the upcoming holiday season.

Examples cited by the paper include:

• KB Toys setting up toy boutiques inside 70 Sears units around the country, and developing a “My First Craftsman” line of toy power tools using the familiar Sears brand name.

• teaming up with Office Depot to sell home office equipment and furniture online; Amazon handles the online ordering part, and Office Depot supplies the fulfillment piece.

• Blockbuster and Philips Consumer Electronics are working together to sell video and audio hardware in Blockbuster stores around the country, which until now have almost purely been in the software business. Home Depot’s Expo Design Center has a similar deal with Philips.

• Target is working with a wine education specialist to teach customers about wine in a variety of seminars…and, not coincidentally, build consumer interest in its wine departments.

Of course, there are numerous other examples, such as Home Depot’s test with Dunkin’ Donuts, and Giant Foods’ use of in-store Toys R Us boutiques.
KC's View:
While the USAToday piece is crafted around the holiday season and the desire by retailers to salvage what is expected to be a down buying season, we believe that these kinds of arrangements make sense on a broader canvas as well, as retailers need to look for new and different ways to display their wares, gain exposure to consumers, and develop new approaches to marketing and merchandising.

We remember years ago going to a supermarket that was located next to a highly successful movie theater, and that used to keep its café open late on Friday and Saturday nights to appeal to moviegoers hungry for dessert or yearning for a cup of coffee. These days, we’d suggest going one step further and actually setting up shop inside the theater.

Here’s the deal as we see it. Retailers can sit and wait for Wal-Mart, Starbucks, and all manner of other competitors to come into their markets and start nibbling away at their sales and market shares. Or, they can make the first move…get aggressive, and build on their strengths by going after the customer wherever he or she happens to be.

It comes back to our familiar mantra: the successful retailer needs to be where the customer wants, when the customer wants, how the customers wants and with the products, services and perceived value that the customer wants.

There is no other option. Except maybe slow and painful death.