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Brands exploiting friendships to generate revenue

Long-term appreciated marketing formats include collaborations. Initially celebrated sparingly in fashion magazines, they evolved into a hype-building tool. Now, they've matured into a reliable and effective operating system.

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Collaborations remain a popular marketing strategy in various formats, previously generating...
Collaborations remain a popular marketing strategy in various formats, previously generating excitement merely in fashion magazines, then leveraged for hype. Today, they have evolved into a fully operational and integrated system in the industry.

Brands exploiting friendships to generate revenue

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Why Collaborations in Businesses Matter: A Modern Take on Partnerships

Modern businesses are toughening up, joining forces like never before. From fashion houses pairing with sports brands to tech tycoons joining hands with fast food giants, partnerships are becoming the norm, driving real growth in sales, brand recognition, and audience popularity. But why's this happening? What's in it for the big bucks?

Case Study: Loewe and On Running

On a superficial level, what links Loewe, a Spanish fashion powerhouse, with On Running, a Swiss running gear manufacturer? The answer? A contemporary customer who wants style, even during their sweat sessions. This partnership has already seen five drops, and they've all sold out faster than a cheetah on roller skates. On Running has ascended the luxury ranks, with a whopping 15,000% increase in interest (according to StockX), while Loewe has attracted a younger, hipper audience and boosted its lifestyle image. It's all about the stacks, but it's not just about aesthetics.

Let's dig into a few more successful collaborations from diverse sectors:

  • Nike Air Jordan and Dior: Priced at $2,000 and selling out instantly. Dior took a dive into the streetwear deep end, while Nike boldly ventured into luxury waters.
  • H&M and Mugler/Versace/Balmain: Affordable luxury in one fell swoop. Lines, sell-outs, and PR galore. H&M broke free from the cheap clothing brand stereotype, and luxury brands embraced a younger, mass audience.
  • McDonald's and Travis Scott: Fast food meets hip-hop. A sales surge, heightened brand awareness, and millions of social media interactions courtesy of ironic tees and other logo swag.
  • Puma and "Soyuzmultfilm": Winnie the Pooh and the Wolf team-up. Sold out in three days. 1,500+ media mentions, revenue spike, and increased devotion.

The Business Side of Collaborations

Collaborations offer an ostentatious array of advantages:

  • Broadened Reach: Pooling together two brands' clientele equates to more potential buyers.
  • Unexplored Territories: Break into a new category or market without making a full commitment and bearing exorbitant costs.
  • Image Makeover: A company can become more youthful or acquire new characteristics through collaborations.
  • Revenue Boost: Scarcity sells. Limited, exclusive offers provoke the fear of missing out (FOMO).
  • Buzzworthy Content: The collaboration itself generates a stir, securing media coverage and social media buzz.

When Collaborations Hit a Roadblock

Collaborations can be potent tools, but they're not a one-size-fits-all solution. There are instances where partnerships falter due to unfavorable customer feedback. Here are three such examples:

1. Adidas and AriZona Iced Tea

Adidas shoes sold with budget tea brand AriZona at a measly $0.99 - in honor of the drink's price. The move caused chaos in New York, with mass brawls, forcing the launch's cancellation.

Oopsie: Overestimating hype and underestimating logistics. Stirring up a crowd may be simple, maintaining control is another matter entirely. Collaborations can turn chaotic, posing a safety threat.

2. Crocs x Balenciaga (First Release)

Balenciaga Crocs became an internet joke overnight, before even hitting the shelves. Social media was saturated with phony images, and many fans simply couldn't swallow the 'joke'. Sales suffered, and it wasn't until later versions, several years later, that they gained commercial traction.

Lesson Learned: Timing is crucial. It's essential to introduce a collaboration gradually and provide a clear explanation of 'why this works'.

3. Shell and Lego

Decades of Shell and Lego partnership ended when environmental activists took notice. The #SaveTheArctic campaign went viral, with a tearful Lego figure in a video set to a catchy tune. Lego eventually severed ties.

Takeaway: Core values matter. If a company's values and a partner's don't align, the partnership may not last.

Collaborations can be a double-edged sword. They can boost sales and brand recognition, but they can also result in unanticipated challenges. The key is finding the perfect partner and striking the right balance. After all, together, indeed, is better. Just remember to keep things organized and communicate effectively. Then, everyone wins.

  1. In the realm of fashion-and-beauty, Loewe's partnership with On Running exemplifies the power of collaboration, as both brands cater to a modern customer seeking style and performance, leading to increased brand recognition, audience popularity, and sales growth.
  2. The intersection of technology and business is evident in the successful partnership between Nike and Dior, whose joint venture in streetwear created an instant sellout at a premium price, further solidifying both brands' positions in their respective markets.
  3. Bridging the gap between business, lifestyle, and finance, McDonald's strategic partnership with Travis Scott led to a sales surge, enhanced brand awareness, and a significant increase in social media interactions, demonstrating the potential benefits of collaborating with influencers across industries.

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