Benefits of Brand Collaborations

by Adwright, 26 March 2021

I. Introduction

Collaborations, or collabs for short, have been the rage in recent years. Brands within and across industries are pairing up to offer fun and new experiences for consumers. Collaborations happen when two brands team up to launch a novel product, service or experience. It is a marketing and advertising strategy that aims to find success for both brands in the partnership. This article will discuss the benefits of collaborations and how brands have utilised this strategy to their advantage.

II. Why collaborate?

i. New audience and new markets

Each brand has its own set of customers. When two brands collaborate, they will now have access to a different group of customers. The collaboration leverages each consumer segment’s strength and builds reach, which will increase trust and eventual patronage.

Often, the two brands have groups of customers with differing characteristics. Taking one of the most famous collaborations as an example – Louis Vuitton (LV) and Supreme – Supreme has a young fanbase who values independent thinking and original expression. In contrast, Louis Vuitton has a mature fanbase who desires prestige and classic designs. Supreme’s original fanbase viewed Louis Vuitton as traditional and stuffy, while Louis Vuitton’s customers viewed Supreme as childish and lacking prestige.

Louis Vuitton and Supreme’s unexpected but effective collaboration (Image credit: The Cut)

When Supreme and Louis Vuitton collaborated, it brought these two groups of customers together. Supreme was thrust into Louis Vuitton’s customers’ attention, and vice versa. It changed the perception that customers had of each brand, with Supreme elevating its prestige and Louis Vuitton shedding its “old-fashioned” image. The collaboration allowed Louis Vuitton to tap onto Supreme’s younger fanbase, while Supreme could appeal to a more mature customer group. This strategy has led the brands to enter into new markets.

ii. Get noticed

An unexpected collaboration sets people talking, hence creating publicity for the brands involved. In a crowded marketplace filled with many brands, collaboration is one way for brands to stand out and be heard. Furthermore, when a smaller brand collaborates with a bigger brand, the former can capitalise on the latter’s reputation and larger customer base. Typically, the bigger brand sees potential in the value within the smaller brand. Thus, the collaboration positions the bigger brand as an industry leader who has the foresight to place itself with the next up-and-coming trend.