Exclusive Distribution Arrangements Escalating

With less and less distinctiveness across retail customer experiences, large, dominant retailers are defaulting to greater use of exclusive distribution arrangements in their quest for differentiation.

We'd be more excited if these distribution deals were being used strategically to provide greater assurance of returns. This profitability confidence would be leveraged by strategically astute retailers to make more aggressive investments in exciting new consumer experiences. Unfortunately, it seems that most exclusive distribution today is being used simply to limit price competition and boost short-term margins. What a lost opportunity.

Two examples recently discussed by Planet Retail:

TARGET to feature Sony Blu-ray Disc players
Beginning in the Autumn and continuing through the holiday season, US discounter Target will feature Sony Blu-ray Disc players as the exclusive product in the emerging category of high-definition home video systems, as well as an expanded assortment of Blu-ray Disc movies. “We’re extremely excited that Target chose to carry Sony Blu-ray Disc players,” said Randy Waynick, SVP of Sony’s Home Products Division.

WALGREENS expands exclusive Yes to Carrots selection
Yes To Carrots has announced that US drugstore chain Walgreens will expand its exclusive selection of Yes To Carrots high quality skin and hair care products. “We’re excited about being the exclusive retailer carrying the Yes To Carrots line,” said Michelle Hobson, Walgreens manager of strategic business development for beauty. “We are always searching for new products our customers will love – and I think Yes To Carrots will be a big hit. We look forward to a great partnership.”