Industry Landscaping

Have you seen the new TV spot from The Home Depot, the one in which the young husband can't decide which tractor brand to buy?The voiceover in the spot proclaims, "Only The Home Depot has John Deere ... (slight pause) and the new tractors from Cub Cadet and Toro, all under one roof."I may be imagining that parenthetical pause, influenced by recent events in the home improvement channel -- namely, Lowe's' February rollout of John Deere products, which ended The Home Depot 's "exclusive" relationship with the brand. (That word is in quotes because, in the home channel, "exclusive" typically means that you work with The Home Depot or Lowe's but not both; all three aforementioned tractor brands sell through independent dealers and other channels.) But it wouldn't be surprising if The Home Depot were only reluctantly admitting that it now shares John Deere with its archrival. In a recent Bloomberg News story, a Wall Street analyst specifically cited "John Deere tractors" as a reason for the chain's fourth-quarter success. John Deere's expansion of retail distribution, which has always been the goal of almost all product marketers, is something of an anomaly these days. Take a walk through The Home Depot or Lowe's, or Kohl's or J.C. Penney or Target -- heck, look at the signs in 7-Eleven -- and it's obvious that exclusive product is becoming a linchpin of successful retailing. It may still manifest itself more often in the form of private label products, but it increasingly is involving national brands as well.Last week, Advertising Age noted that Procter & Gamble's Max Factor "has been reduced to little more than a Wal-Mart house brand" now that the cosmetics line has been de-listed from Target, Walgreens, CVS and Rite Aid.But is the prospect of a national brand becoming a Wal-Mart "exclusive" truly a horrible notion, or just a concept that's a little ahead of its time? After all, the drugstore chains that just dumped Max Factor have devoted much recent attention to marketing exclusive cosmetics lines they've sourced from Europe, or the salon marketplace, or just about anywhere else they can find them. Will some other national brands someday be looking for a single "house" to call home?That may sound like anathema to brand marketers right now. And from the viewpoint of traditional brand marketing, it is. But in a retail environment where even the biggest of the big-box chains is looking to rationalize SKU counts, it might be what many brands will need to survive in the future.Do recent events mean the end of Max Factor as a "national brand"? Maybe. But does near-exclusive distribution through Wal-Mart mean the end of Max Factor as a product line? You know the answer to that one.Then again, maybe I'm just imagining this, too.Peter BreenManaging Director, ContentIn-Store Marketing InstituteP.S. We'd like to thank the hundreds of members who responded to our recent "Pick the Next Retailer Profile" e-mail. The winner, Whole Foods, will be profiled this spring.

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