In past years, brand partnerships with an existing business have become a favorite tactic for start-ups seeking fuel development and connections to a ready-made client base. However, we have lately witnessed a growth in the presence of long-standing premium companies, with large buyers’ base, working together to achieve new target audiences to offer innovative and new products for their existing customers.
What are the advantages and disadvantages of brand partnership, and which considerations impact collaboration most?
It is probably the biggest advantage and inspiration behind such brand partnerships because they will obtain a new consumer group. In 2017 Louis Vuitton unveiled its partnership with the New York-based Supreme Ski Company at the men’s wear exhibition in Paris in autumn 2017. The news of this partnership came from streetwear and design lovers alike. For decades, Louis Vuitton has become the epitome of luxurious apparel that has often been common among Baby Boomers and Generation X. In joining Supreme, as many say, is the epitome of a hip company, the brand has gained the interest of a younger millennial market, aware of style.
The partnership of Louis Vuitton x Supreme was a triumph is an underestimate. In 2017, the sales of apparel and leather products by Louis Vuitton rose to € 15.4 billion by 21 percent. The LVMH annual report for 2017 specifically attributes to the Supreme partnership (as well as another cooperation with artist Jeff Koons). The pattern continues to increase in 2018, with sales of LVMH apparel and leather products continuing to rise by 19 percent to €18.5 billion.
With Millennials soon to be the largest generation of people residing in the USA, and their buying power is estimated to hit $1.4 billion by 2020, marketers need to adapt and design their marketing strategies for this audience.
Information and costs sharing.
Collaboration enables companies to exchange risks and experiences. Brands should seek a collaborator to share their skills in fashion, such as the Dior Men of 1017 ALYX 9SM maker Matthew Williams, to integrate his iconic utility buckle in a host of belts, caps, and backpacks in the Dior Men spring 2019 range.
They still have the opportunity to find intangible expert knowledge through marketing or connections to client lists and delivery networks – for example, the new Moschino x Sephora range, which has been distributed through Sephora’s vast network of retail stores and online to Jeremy Scott-designed beauty brands. These kinds of brand partnerships are less concerned with getting entry to new territories and giving present clients something new, in the expectation that the brand loyalty can be further strengthened.
Renew the Old Brand
Brand partnerships have proven to be valuable to reinvigorate certain smaller, stagnant brands. Fila’s Italian sportswear company has worked with Gosha Rubchinskiy, a Russian artist, on SS17. The range then sold out, along with its various restaurants. For AW18, Fila has worked with fellow Italian brand Fendi on a high-end partnership, with certain parts for up to $7,000.
Both partnerships also allowed Fila to reintroduce the company and set the foundations for the launch of its 2018 sneaker, the Disruptor II. Fila’s revenues grew by 17% in 2018 and by another 22% in 2019.
Select the right partner
The collaboration will collapse if not well prepared and implemented and end up doing more damage than good. It is important to choose the right collaborator for cooperation. Luxury companies risk losing the luxury name, forcing the business to disappoint prestigious consumers. With sustainability and ethical business practices, especially in the buying patterns of millennium customers, brands should also take into account the credibility of potential collaborators in these fields.
Set the correct price
The price point is one of the most critical reasons for the effective brand partnership. When selecting the right partners, luxury branding could dilute the brand’s reputation in the eyes of its clients by selling their goods at a lower price. Conversely, if the price point is so big, there is a danger that cooperation cannot succeed commercially.
With the cooperation of Fendi x Fila, prices were set in the normal range foreseen by Fendi customers, but perhaps beyond the range for the Fila customers. For Fendi, cooperation was less about encouraging Fila consumers to buy Fendi goods and more about how Fendi would draw on nostalgia and logomania.
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Practical reasons
Until cooperation starts, parties can negotiate on financial issues such as profit-sharing and funding arrangements. The delivery system should be chosen—whose shop would the commodity be stocked? Or is it all going to be sold online? Perhaps we can suggest a limited one-off pop-up store?
Remarking to the Louis Vuitton x Supreme example, Louis Vuitton stressed that the line is offered exclusively by selecting Louis Vuitton shops worldwide to ensure that it meets its customers’ high standards. These concerns should be taken early so that future conflicts between spouses can be avoided.
Final remarks
Name partnerships will certainly prove profitable for all parties, but their effectiveness is not certain. In selecting the right partner, positioning, and business policy, careful thought should be taken. Above everything, the client should remain at the center of decision-making – the partnership has to draw from the clients, and they eventually decide if collaboration is effective.
