The phenomenon of co-branding

24 December 2021

In the retail world everything moves fast and brands, to gain or maintain their competitive advantage, must find, and adopt innovative strategies. Among these, collaborations are certainly the most favoured recently. Louis Vuitton x Supreme (2017), Dolce & Gabbana x SMEG (2016) and IKEA x Off-White (2019) are certainly good examples of those collaborations that worked and in fact, they are still remembered and complimented to this day. 

Collaboration or better co-branding is considered a form of alliance where two or more brands cooperate and form a partnership. This is obviously done to reach certain benefits. For instance, it has been shown that the likely positive spillover associations between the brands can enhance brand image and awareness also thanks to the marketing exposure and to the creation of a form of newness and surprise. A further benefit that comes from a successful collaboration is the reach of new target segments. For example, the IKEA x Off-White collaboration managed to reach a new target segment of fashion-minded millennials with a limited budget. Instead, the Louis Vuitton x Supreme allowed the former to gain the Supreme’s consumers and therefore, a new target group.  

An interesting element in the world of co-branding is that luxury brands that cooperate between themselves or with sportswear brands result in higher desirability among consumers. According to research, this is because sportswear is a category driven by wellness aspirations. Consumers do not buy sportswear only for physical activity but also for lifestyle expression and general wellness.  These collaborations are powerful because they satisfy the modern consumer who wants to be comfortable, stylish and feels good about themselves. A great example of a collaboration of this type is the Gucci x North Face, one of the most sought-after collaborations of 2021.

Co-branding can positively affect consumers’ attitudes towards the collaboration but also toward the individual brands. It can increase consumer engagement and brand loyalty. However, co-branding may also negatively impact consumers’ attitudes if negative values are associated with one of the brands or if there is no or an insufficient fit between the partnering brands. To positively influence consumers’ attitudes, the collaboration must be done between two brands that are perceived as congruent, related or with similar values otherwise it can lead to counterproductive market outcomes. If negative values or an unpleasant experience are associated with the brands or one of them, the collaboration can result in consumer dissatisfaction which consequently can lead to regret and disappointment (even for those products bought before the collaboration) and then to brand avoidance.

Brand collaborations are a crucial branding strategy, and they can be a great way to strengthen the image of the co-partnering brands but they must be done well. Luxury brands that cooperate can keep up with marketing trends and stay competitive, but they must remain faithful to their roots and original values.

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