Picture this scenario: You’re the owner of an online streetwear clothing store, and you’re on the lookout for ways to grow your business. The popular local football team—the Panthers—is well loved, so you want to capitalize on the team’s brand recognition and popularity.
You decide to pursue a brand collaboration with the team, win it, and develop a new line of clothing, Panther Pride, with the mascot and logo featured on the front. The clothes fly off the shelves thanks to advertising pushes by both your business and the team—and a stellar season performance from the Panthers. Here’s how brand collaborations work, and how to identify potential partners that will suit your company.
What is a brand collaboration?
Brand collaborations happen when two or more businesses come together to create a product or service that caters to the customer bases of both businesses. The relationship is meant to be mutually beneficial, boosting sales or engagement rates for both companies. Businesses will find brand collaborations by looking at other brands that are complementary or overlap in ways that aren’t competitive.
How do brand collaborations work?
Brand collaborations work so businesses can share their resources to co-build an (often exclusive) offering. The collaboration capitalizes on the combined reach and brand recognition of both parties, making it a cost-effective way to market the product or service.
To kick off a brand collaboration, first identify your goals for the campaign, whether they are increasing sales, increasing engagement, or increasing reach. You can then reach out to potential partners to find brands that make sense for your industry or target audience and clearly communicate your expectations to see if a collaboration would be mutually beneficial.
Benefits of brand collaborations
Forming a brand partnership can be a great way to grow your business because it allows you to access a new target audience and unexplored market. Undertaking brand collaborations may allow you to:
- Tap into new audiences. If you have your eyes on a new target market or demographic, partnering with another company with its own established customer base can bring you potential customers that you might have been unable to access before.
- Make and save money. Research found that brand collaborations can be up to 25 times less expensive than traditional digital advertising while producing similar outcomes. Another report by American Express found that 64% of highly collaborative businesses experienced increased revenue growth over a 12-month span.
- Generate buzz. Brand collaborations can be a powerful tool for drumming up interest in your business. Co-creating products or services advertised as one-offs, exclusives, or limited editions is known as scarcity marketing, which induces demand and can help boost sales.
- Leverage another company’s strengths. If your business builds complex, easy-to-use technological products but struggles with creativity, partnering with a non-technical brand known for its creativity could be a good way to leverage each other’s strengths in a way that’s mutually beneficial.
3 types of brand collaborations
Brand collaborations aren’t just about releasing products with two companies' names on them. Here are a few options for you to think about when it comes to working with another business or individual:
1. Influencer marketing
Influencer marketing happens when companies ask individuals or content creators with large followings on social media platforms to tout their products. Large companies tend to partner with mega-influencers (individuals with millions of followers), but small business owners often hire micro-influencers (individuals with follower counts in the thousands). This leads to more visibility and, potentially, more sales. For example, doughnut chain Dunkin’ collaborated with TikTok star Charli D’Amelio, a partnership that led to a 45% surge in coffee sales.
2. Product collaborations
Product collaborations involve two brands creating a new good or offering. There are plenty of examples of how brands created this type of collaboration. For example, Fishwife Tinned Seafood Co. and Fly By Jing co-developed a tinned fish, The Fly By Jing Smoked Salmon. The offering highlights the best of both brands: Fishwife’s salmon, sourced directly from a Fairtrade finfish farm in the Kvarøy Arctic, with Fly By Jing’s Sichuan chili crisp, crafted in Chengdu.
Co-marketing, or collaboration marketing, is a technique that takes advantage of companies’ reputations, customer bases, and brand loyalty to create a hybrid effort beneficial to both businesses. Think of product bundling like Beanie Babies in McDonald’s Happy Meals or GoPro and Red Bull cross-promoting their products and creating content together. Co-marketing often succeeds when the collaborating companies have some overlap in terms of audience and industry but aren’t directly competing with each other.
How to find brand collaborations
- Identify your goals
- Choose the right partner
- Use tools to manage partnerships
- Communicate and compromise
For every successful brand collaboration, there’s an example of a failed partnership. Here are some points to keep in mind to ensure your brand collaboration is positive for your business:
1. Identify your goals
Before you set out, decide what you want to get out of a potential brand collaboration. That could be to increase sales, boost social media engagement and follower numbers, or increase brand loyalty. Identifying your goals will help you determine what type of cross-brand collaborations to pursue and what types of partners may be best.
2. Choose the right partner
Ideal partnerships are brands that have some, but not too much, overlap in industry and customer base so that each has an opportunity to expand their market share. A food brand might not want to collaborate with a furniture business, given there’s not much shared interest between the two, and one ice cream company wouldn’t want to collaborate with a similar ice cream company, since the two would be competitors. Mattress maker Casper’s partnership with furniture retailer West Elm is a good example of two complementary businesses working together to grow their respective operations.
3. Use tools to manage partnerships
The Shopify Collabs app, for example, lets you recruit and manage content creators to promote your products, endorse your brand, and increase your sales. The app also allows you to review and approve creator applications, send gifts to valued creators, generate discount codes and affiliate links, and track and pay sales commissions to creators.
4. Communicate and compromise
When you’ve identified potential partners, reach out to them and work together to identify shared goals and expectations for the collaboration. In your discussions, remember you may need to compromise sometime. You should also discuss what the potential product or advertisement will look like, how you will share profits, and how you will track and measure success.
Build and manage a community of influencers who love your brand
Shopify Collabs can help you recruit and manage creators who can promote your products, endorse your brand, and ultimately increase your sales.
12 examples of successful brand collaborations
Knowing what brand collaborations have been successful is a good way to generate ideas for your own brand partnerships. Here are a few examples:
- Spotify and Hulu. The music and TV streaming tech giants offered a discounted bundle of their products, enticing customers to subscribe to both.
- BuzzFeed and Best Friends Animal Society. The animal rescue service and the digital media company partnered to promote pet adoption, resulting in a huge uptick in awareness of animals that needed to be adopted.
- Walmart and BuzzFeed. Another BuzzFeed partnership, this time with retailer Walmart, involved BuzzFeed’s food and drink vertical, Tasty, using Walmart-branded cookware in its videos.
- Home Depot and Pinterest. Home Depot and Pinterest created a series of pins on the popular social media site showing users which Home Depot products they need to complete home improvement projects and how to use them.
- Crate & Barrel and Dolly. Dolly, an app that connects users to furniture delivery services, partnered with Crate and Barrel to sell and ship the retailer’s products.
- Adidas and Peloton. Adidas and Peloton collaborated on a clothing line targeted to a shared audience: active individuals.
- Shahla Karimi and Kenneth Cole. Fine jewelry brand Shahla Karimi partnered with fashion brand Kenneth Cole to create a collection that catered to existing customers of both companies.
- United By Blue and Chacos. Retailer United By Blue collaborated with footwear company Chacos to create a limited-edition sandal, a hat, board shorts, and T-shirts.
- The North Face and Gucci. The two retailers combined forces to create an outerwear line that incorporated the luxury elements of Gucci’s brand with the trusted reliability of The North Face.
- DoorDash Drops. DoorDash announced a collaborative effort with various celebrities and Instagram influencers that gives subscribers to its service exclusive access to branded products, such as musician Chlöe Bailey’s hot sauce.
- Target and Lilly Pulitzer. The fashion collaboration between retail giant Target and women’s resort wear brand Lilly Pulitzer was so successful that it temporarily crashed Target’s website.
- Airbnb and Flipboard. Airbnb collaborated with news aggregator Flipboard to create Experiences, which offers users high-quality content tailored to their interests.
Brand collaborations FAQ
How can you ensure that both brands contribute equally to a collaboration?
Setting goals and expectations before the collaboration, having a plan, and clearly communicating throughout the collaboration are the best ways to ensure that both brands contribute equally to a collaboration. Not every partnership needs to be split 50/50, but being aligned beforehand can prevent one party from feeling like the other isn’t pulling its weight.
How can you measure the success of a brand collaboration?
Tracking metrics such as sales, social media account engagement rate, and lead generation both before and after a partnership can help you gauge how successful your collaboration has been.
Do brand collaborations require both brands to contribute equally?
No. Labor and contributions can be split however both parties agree upon beforehand and are usually tied to how much of the profits each receives. For example, if you decide to contribute 75% of the time, labor, and money upfront, you could expect to receive 75% of the profits from the collaborative effort.
Can brand collaborations be a cost-effective marketing strategy?
Yes. Research shows that brand collaborations can be up to 25 times less expensive than traditional digital advertising.
Do brand collaborations always involve creating a new product?
No. Co-branding and influencer marketing collaborations don’t necessarily require your business to create any new products or offerings. It could instead rely on a popular individual or brand to help you sell what you already have.