Although ‘co-branding’ is a relatively new term in marketing lexicon, partnering with a brand to create synergy has been around for a few decades and sprouted a handful of sub-categories.
B2c co-brandings include Michael Jordan and Nike (which gave the world ‘Air Jordans), Philadelphia cheese and Milka chocolate, or the multiple prestige brands that have affiliated with Product Red (in itself a licensed brand) in order to raise funds for The Global Fund to fight HIV. Industrial co-branding is when a non-consumer brand piggybacks onto a consumer one – and by doing so raises awareness of their ‘intangible’ product in a wider marketplace; Intel convinced hundreds of computer manufacturers that displaying the ‘Inside Intel’ logo on their product would add value. Similarly, the Woolmark logo has appeared on over two billion garments, assuring the consumer that regardless of who designed and spun it, their sweater is made from genuine Australian merino wool.
Fashion is particularly ripe for co-branding efforts. Under the hip guise of ‘capsule collections’, partnerships between prestige apparel houses like Marni and Paul & Joe with budget retailers such as Target and H&M have created near hysteria on the High Street.
According to the writers of ‘Co-Branding: The Science of Alliance’, the ultimate aim of brand affiliation must be the enhancement of both for a competitive advantage that is mutually felt. Joint ventures will almost certainly affect the way that customers perceive the brand – and this carries a level of risk.
In 2014 the Spanish designer Custo Dalmau, produced a low-cost collection for the budget supermarket chain LIDL. Custo’s bright, distinctive t-shirts, which generally retail for around 80 Euros and have a celebrity following, were being displayed next to light bulbs and cheap electronics for less than 20. Whilst the venture lifted the ‘penny dreadful’ perception of LIDL, critics wondered what it did for Custo beyond increasing volume. Despite selling out of 300,000 items in a week, one commentator called it “Co-Branding Suicide”.
Custo was not the first prestige brand to collaborate with LIDL; previously the Michelin-starred chef Sergi Arola had lent his support to their ‘Deluxe’ comestibles range without the backlash. So why the beef with Custo? Could it be that critics were worried that his product had become just a little ‘too’ democratic?
Custo could have done a collection for Primark, H&M or any one of half a dozen budget fashion retailers. By daringly teaming up with LIDL he broke new ground in Spain. Has the brand suffered? Not noticeably. Has he gained new customers? Most likely. His LIDL collection was astutely called ‘Growing by Custo’. As his new, young, 20-euro T-shirt customers do just that, they may well turn into future 80-euro T-shirt ones.
Given that Custo had already been working to capture a wider audience by dropping the price of his main line, the venture seems part of a long-term strategic plan and overall a risk well worth taking.