*This article was originally published on December 21, 2020.
2020 could have been the death of retail as we know it.
Now that I think about it, maybe it was.
It seems as though I can’t read the latest industry news without seeing an article highlighting the most prominent trends and lessons learned from 2020. Most articles highlight common tactics that were already growing in popularity but catapulted into vital elements, including:
- Loyalty programs
- Omnichannel strategy
But there’s one strategy few are talking about that just may be the most important trend to arise from 2020: brand collaboration.
Like the other tactics, brand collabs and co-branded opportunities have existed long before 2020. But this year has highlighted the strategic advantage of going bolder and getting more creative with partnerships.
Big-Box Stores Made Big Announcements
In-store brand collaborations are a classic strategy—Target has a rich history of working with designers to develop exclusive limited-edition in-store offerings intended to build buzz and draw in a different audience. What’s new about this strategy in 2020, is that brands who may have once viewed themselves as competitors now understand the power of collaboration. Most notably, Target’s recent announcement with Ulta to offer a smaller in-store Ulta branded shopping experience highlights this shift in perspective. Notably, just weeks after Target’s and Ulta’s announcement, Sephora announced they would partner with Kohl’s to offer a similar experience. Sephora is certainly not a newcomer to in-store collaborations, having utilized a similar model with JC Penney since 2006. But their openness to continuing this strategy in a second interaction highlights how long-standing brand partnerships can be beneficial. Not only do brands create a broader target audience, but long-term partnerships also allow brands to create a genuinely co-branded experience that gives customers time to adjust their shopping habits for long-term change.
Ecomm Got (More) Creative
It’s no secret that nearly the entire world spent more time in front of screens this year, and it’d be easy to assume that advertisers would be able to make a simple pivot to account for this shift in consumer focus. However, it’s not so straightforward.
Though the pandemic and resulting lockdowns did correlate with a rise in television bingeing–the expansion of subscription-based (and often ad-free) streaming services has meant that advertisers can’t take advantage of that in the same way they approach network television. Many consumers have also flocked to social media and gaming sites, where ads often feel out-of-place and are the basis for user resentment. And although these trends have been slowly building over the past decade, the events of 2020 have meant that brands have faced the expedited challenge of finding new ways to get in front of their screen-savvy customers.
This summer, ecomm innovator Alo and influential beauty brand Tatcha collaborated to promote a new launch by utilizing the trendy game Animal Crossing and creating Tatchaland. This partnership didn’t offer consumers any specific discounts or added real-world benefits other than the opportunity to win various pieces of virtual merch. Ultimately, this partnership benefited the brands by creating brand awareness through an experience accessible to anyone with access to a Nintendo Switch and a copy of Animal Crossing.
Shopify partnered with TikTok.
On a constant mission to help its merchants get in front of customers, Shopify launched a partnership with TikTok to offer sellers access to TikTok for Business. This partnership offers merchants the ability to launch automatically generated in-feed shoppable ads as well as access to campaign analytics. This means merchants themselves don’t have to dedicate resources to growing their individual TikTok accounts to access new audiences on this viral platform. Unlike many traditional promotional platform opportunities, Spotify didn’t restrict this offering to their top brands but rather made it accessible to all, further empowering each merchant to strategize to the best of their ability.
Everyone Agreed on Gift Cards
This year, brands of every size became more creative not only with how they utilize their gift card offerings but also with how they promote their card via collaboration and alternative sales channels. Many smaller retailers rallied together and developed gift cards that could be utilized in small businesses within their town or city. With community-driven gift card programs happening from Tavistock, Devon in the UK to Akron, Ohio in the US and beyond, these programs highlight the fact that independent merchants not only understand the power of gift cards, but also the power of collaboration.
Additionally, larger brands that once rejected the idea of co-branding or discounting developed strategic partnerships to appeal to current customer trends. One notable set of co-branded promotions are Apple and Best Buy with multiple discount strategies. For Black Friday, Apple and Best Buy offered a promotion where if a consumer spent $100 on Apple gift cards, they received a $20 Best Buy gift card. Even more recently, the two brands offered a similar promotion with customers receiving a $5 Best Buy gift card after purchasing $50 Apple gift cards.
In addition to offering co-branded gift cards directly to consumers, they’ve also utilized this promotional strategy to maximize B2B and third party sales channels. Taking advantage of promotions through alternative sales channels during times of economic uncertainty is an essential strategic move because both companies and end users are looking for ways to make their money go even further. And, with all of these promotions, whether it’s a local community based collaboration or national co-branded promotion, a purchase of a gift card is a promise to spend money with the retailer which is a win for any brand.
As we look to 2021 and beyond, one thing is certain—there’s no going back to the branded silos that retailers once embraced. It’s critical that brands take these unexpected and unique collaborations into consideration as they develop new growth strategies. When deciding whether to pursue a new partnership, three key questions to consider include:
- How much power do I have to protect my brand standards?
- How does this partnership get my brand in front of new audiences?
- What data will I get to know this partnership is successful?
At Prizeout, we understand that successful partnerships look different for different brands, which is why we’re proud to offer a platform that gives control back to the retailer.