This document discusses how partnerships can help retailers adapt to changes in the retail industry and engage customers. It provides examples of successful partnerships across different sectors, including: Target partnering with Disney to replace toys with Disney stores; Starbucks partnering with Spotify to provide in-store entertainment; luxury brands partnering with resale companies to promote sustainability; and pop-up stores allowing direct-to-consumer brands access to new customers within established retailers. The overall message is that partnerships allow retailers to gain new expertise, products, services and experiences to remain relevant to today's customers.
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Power of Partnerships
1. Power of Partnerships
D E M A N D W O R L D W I D E + S H O P P E R X L A B
In a recent collaboration with ShopperX Lab
and Sparks & Honey there was an opportunity
to discuss changes and challenges in retail
with a group of senior innovative thought
leaders from a diverse set of retailers
representing luxury, specialty, technology and
brand.
One concept that resonated amongst the
group was that we are all seeking to
differentiate and engage with the highly
connected consumer of today. The theme of
our discussion was that a retail strategy
delivering personalization and experiential
retail must stay true to your brand, your
customers, and should embrace your expertise.
This all makes perfect sense, so how do you
add differentiation and embrace customer’s
wishes by adding new products, services, and
experiences that are new to your company?
The most progressive retailers and brands are
turning to partnerships and collaborations as a
strategy to embrace the changes they seek to
make. The benefits of partnerships are many,
including driving net new traffic and increasing
revenues while delivering new experiences and
products that are relevant. The partnership
strategy opens up new revenue streams,
attracts new customers, and protects the brand
image for both partners.
LET'S TALK PARTNERSHIPS
BY PAULA LEVY
There is a new model for retail-consumer
engagement with Brick and Mortar stores
transforming in size and product
assortments, requiring less selling space with
BOPIS and ROPIS Omnichannel intiatives,
and the convergence of digital and physical
which is here to stay. The new consumers
expect experiential retail to shop stores and
no matter what the doom and gloom of retail
news suggests with store closings, there is a
new mode of operation that will keep stores
in our future for the long term.
The connected consumer wants multiple
channels of engagement and they definitely
want stores to stay – just a different format
than the traditional stores of our past. A
recent study by SmarterHQ, claims
Millennials and GenZ not only go to physical
stores but they actually prefer them.
To be successful in partnerships, retailers
need to stay aligned to your brand image and
vision, connect with your customers, and
above all be authentic in delivery and
engagement. The best partnerships are
based on a deep understanding of your
customers and their lifestyles as well as
designing a win-win-win formula for you, your
partner, and your customer.
2. In our search for partnerships in retail, we found many that are prospering and inspirational,
delivering a true win for all engaged. There are many reasons to partner and gain speed to market
with a winning formula for success.
Partnerships come in various forms and address diverse business needs to deliver benefits. Having
a partnership strategy is essential to your success and this strategy will derive directly from your
customer journeys and developing a deep understanding of who your customers are, why and how
they engage and shop with your brand and marrying this knowledge to your brand image and
vision. This exercise will identify a clear path to partnerships that will add value to your bottom
line and impact revenue positively.
PROGRESSIVE & PROFITABLE PARTNERSHIPS
Let’s first look at a few large retailers with a partnership focus and strategy underway. Target,
Macy’s, and Walmart have each taken a partnership approach to transform their business models.
Designer created exclusive Target products and co-branding started early and has been very
successful with designers such as Isaac Mizrahi for apparel, Michael Graves for home furnishings
and many more. They have won customer loyalty bringing designer merchandise at an affordable
cost
Known brands such as Vineyard Vines, who have their own stores, provided an outlet to reach a
new audience and customer for both brands
To increase margin in a product category, Target partnered with Disney to replace their low
margin Toy Department with micro stores within Target driving excitement, entertainment and
sales. In turn, Target will open on Disney property in 2021
Kids may not have their own money, but they have an influence on household spend. Target
partnered with UNICEF to help kids raise dollars through activities in a program called KID
POWER as an opportunity to connect with this younger audience and give back with philanthropy
at the same time
Leveraging their expertise in sales and order fulfillment online, Target is teaming with TRU Kids
(new owner of Toys R Us) to manage the relaunch of the brand’s online retail arm. A true win-win
in gaining speed to market as customers will be directed to Target online to deliver TRU Kids
orders
Retailers with a Partnership Strategy
Target has created a multitude of partnerships to address a number of business opportunities and
fix specific business challenges. Their overall strategy is paying off for the brand and delivering new
product categories, services, experiences and value to their customers. Here’s a view of their various
partnerships integrated into their business today as our top progressive retailer in partnerships:
3. PROGRESSIVE PARTNERSHIPS
Worked with over 5,000 small businesses introducing products in the last 7 years
Outdoor Story brings curated goods from Dick’s Sporting Goods into Macy’s – two established
retailers collaborating for new customer acquisition
Color Story partners with Crayola, Levi’s Kids and MAC Cosmetics together focused on colors with
something for every generational shopper
Herald Square Flagship store has partnered with BEAUTY by POPSUGAR, Shinola, and digital
customization studio YR Store to provide customers a DIY experience enabling self-expression
designing products in a workshop
Retailers with a Partnership Strategy
Macy’s has launched STORY as a narrative driven retail concept that invites consumers to explore
emerging small business brands and hundreds of products. This is a launchpad for online
companies to try out brick and mortar stores and get great branding from a dominant retailer. For
Macy’s they can test markets with new products, experiences and additionally capture customers
with new exciting brands.
STORY is a partnership/sponsorship with retailers that share a customer profile providing increased
branding and revenue streams for both. The analysts and press covering Macy’s (Forbes and Retail
Dive) feel that Macy’s has executed STORY well in some locations but not consistently across
locations but all agree a great idea. The overall STORY concept, if executed well with consistency
across markets should generate revenue and customer loyalty
4. PROGRESSIVE PARTNERSHIPS
Retailers with a Partnership Strategy
Walmart is the third large retailer with a partnership strategy adding experiential retailing to extended products
and services based on their customer needs. They have stayed true to their customer and focused on delivering
convenience and value that they are known for through their partnerships.
Buzzfeed’s Tasty provides food and drink as well as related content driving ecommerce traffic
Pet Vets have been added on premise to providing services to customers’ pets
Co-branding with Roku selling audio gear under the name onn Roku, provides a more
affordable choice to Roku branded items
Localized grocery delivery companies across the country are providing one-hour delivery
services including new partners Point Pickup, Skipcart, AxleHire, and Roadie
Google partnership provides voice-assisted grocery shopping with pickup and home delivery
options adding experiences to the shopping journey
Checkers, Philly Pretzel Factory, and Subway all use Walmart real estate for brand exposure and
provides Walmart employees and customers with convenience of food-to-go
5. Experiential Retail is a large driver in retail today to meet the needs of the new connected
consumer seeking entertainment while they shop. Here are some retailers that have taken this
approach to expand the customer experience through partners in addition to the large three
highlighted above.
Experiential Retail
Starbucks added music through Spotify that
brought entertainment to their shops while
adding music to their sales on-premise and
through Spotify. Perfect reason to stay and
drink your coffee versus leaving the
store. Great example of leveraging expertise
Starbucks + Spotify
Offering paint recommendations, this
partnership provides an enhanced experience
and a convenience in decorating to know what
color paint matches a furniture or décor
purchase
Pottery Barn + Sherwin Williams
Offer pop up newsstands with coffee and
snacks. A perfect reason to stay in the store
longer and visit more often for convenience and
experience. Extending their Lifestyle brand with
simple entertainment their customers love
Shinola + The Smile
Offers customers manicures and blowouts for
convenience. No longer a reason to leave the
store for these quick salon services that make
a customer feel special
Neiman Marcus + Le Metier
Convenience Captures Consumers
Expanded delivery services of
furniture in local geographies.
Not every customer can carry out
purchases and this provides an
added convenience that fits into
the budget of the Crate & Barrel
customer
Crate & Barrel + Dolly
Brilliant move for Kohl’s to
increase store traffic and win
over customers by taking returns
from Amazon. Kohl’s is gaining
new customers offering the
convenience of returns and
capturing a larger audience now
in their stores
Kohl's + Amazon
Bringing food & beverage services
to the seats outside of VIP. In our “on
demand” culture this partnership
brings convenience & on demand
services to the fans spending
significant fees for seats. Why leave
to stand in a line and miss the
action?
Yankees + Postmates
Convenience isrequired for today’s busy consumers. Retailers are all adding convenience
through BOPIS and ROPIS omnichannel services and more based on what their customers
want. There is certainly a reason to partner for expertise when that expertise does not exist
within your brand and you can get to market faster. Why recreate the wheel when someone
already mastered it? Leverage branding to drive more traffic to your stores where you can.
6. Product Extensions that meet your customer’s needs through net new products and co-branding
opportunities expand a retailer’s revenues and customer visits. Why have customers go elsewhere
for products when they can stay within your store and shop for all? This is also a perfect solution
for white space in stores due to downsizing product assortment by leasing space to experiential
and extended product offerings. In addition to Target:
Product Extensions Escalate Brand
Offering limited time designer sales creating
buzz and bringing in new and existing
customers to purchase coveted brands at a
price point they can afford. Designers
partnering with H&M on a flash sale annual
basis include Versace, Balmain, Giambattista
Valli, Karl Lagerfeld, Stella McCartney, Comme
des Garcons, Alexander Wang and Lanvin
H&M + Exclusive Designers
Co-branded a high-tech jacket for cyclists
enabling smartphone controls with basic arm
movements a few years ago. Where other
brands have ventured into “smart clothing”
on their own, Levi’s turned to a pro with
Google getting to market faster with
combined expertise
Levi's + Google
Bringing a well-known brand into the
stores. Customers are shared for increased
branding and revenue streams
West Elm + Caspar Mattresses
Provide relevant books for the customer to
purchase within a set number of locations.
PRH Labs creates personalized assortment of
books based on rich data to ensure the
selection is relevant to the retailer’s
customers
West Elm + Penguin Ramdom
House Labs
Co-branded Apple Watch Nike+ - an
exclusive Apple Watch Series for Nike Sport
Bands targeted at runners integrating special
Siri features and the Nike+Run Club app. This
is the latest from this long-standing
partnership with proven success
Nike + Apple
Showcasing their paint colors with room
designs provides convenience in 360-degree
design bringing their brand closer to the
customer to start their education on color
preferences
Sherwin Williams + Pottery
Barn/West Elm
Thinx will sell their "period-proof underwear"
for the first time in Nordstrom brick and mortar
stores as Nordstrom taps DTC brands for
limited-edition & permanent partnerships.
Nordstrom + ThinxCreated a Kroger Express Mart inside
Walgreens for to-go foods and Walgreens has
a Health & Beauty line inside Kroger
Stores. Combined expertise delivers
customer convenience and new products.
Kroger + Walgreens
Businesses to fill white spaces with leases to
additional product companies for their
customers. Today these include to-go grocery
items and basic food supplies, but we expect
more to come from the Amazon/Whole
Foods connection
Kohl's + Grocery
AAA Shops have been selling Travel Services,
License renewals for DMV, Tickets to Disney
and much more as a very successful model to
capture a wider audience. Customers can
pay utility bills with cash or check as well as
renew their driver’s license for convenience
all in one stop
AAA + DMV + Travel
7. Luxury Brands Look to Lifestyle & Sustainability
Creating matching accessories for the luxury
client looking to immerse themselves in the
luxury brand promise.
BMW + Louis Vuitton & Montblanc
An Hermes designed watch band for Apple
Watch cusotmers that seek that luxury option
and can immerse themselves in a brand
Hermes + Apple
Have all put their names on 5 Star Hotel Properties
and have immersed their brand throughout the
properties providing lifestyle experiences to the
luxury customer
Giorgio Armani, Bulgari, Versace,
Fendi and Ferragamo
Luxury Resale Growth Spurs Sustainability
Consignors are rewarded with a
$100 gift certificate to shop in
Stella McCartney stores or
online. What better way to
update a wardrobe and give
back at the same time.
Stella McCartney +
The RealReal
Burberry consignors receive an
exclusive white-glove personal
shopping experience which
includes a British High Tea
experience while shopping for
their new items
Burberry +
The RealReal
Neiman Marcus is expanding
directly into the pre-owned market
and they have taken a minority
stake investment in their
partnership to do so. Customers
may now drop off used luxury
items at some of their department
stores with partner, Fashionphile
Neiman Marcus +
Fashionphile
Sustainability is important for today’s new consumer, especially the younger generations
interested in saving the planet. This includes brands and retailers and is demonstrated in
the strong growth of the resale marketplace. Sustainability is a topic of its own and look for
more on this in future ebooks but there a few that are approaching this through
partnerships worth mentioning now.
The RealReal is in what is called the circular fashion business and has made a huge impact
on the luxury market reselling clothing, accessories, jewelry and art. Luxury fashion brands
are partnering with The RealReal for sustainability, creating a way to reward their loyal
customers and free up their closets for new merchandise all at once. They are also winning
a new customer base that can now afford authentic coveted goods versus buying illegal
copies.
Luxury Brands are entering partnerships to deliver a brand promise for all things luxury and
even this sector understands the importance of collaboration for today’s consumers. As
global trend authority WGSN notes in a report about how to appeal to the luxury
consumer: “Collaborations, whether product or artistic, will be key over the next five years,
with co-creation changing the emotional investment consumers have in product.” They are
also focused on sustainability through partnerships for resale.
Lifestyle Brands Collaborate
8. The Remix Era
Ralph Lauren + London based streetwear brand Palace
Louis Vuitton + Supreme with a limited-edition line
Fendi + Fila with a limited line of merchandise with combined logo's
Michael Kors + Jimmy Choo + Versace in an acquistion to expand categories
The Remix Era is driving luxury brands to enter streetwear with sneakers as the largest
category to take off. Who thought we would be spending $650-$1,000 on sneakers a few
years ago? In addition, luxury and specialty brands need to connect with younger
generations now to protect their brands. These brands are pairing or acquiring to remix
luxury and specialty.
Pop Up Stores have been around for a while but those inside established retailers sharing
like customers are enabling DTC brands to open their first offline stores in an operating
retailer with traffic versus going it alone. What a great way to test the market and gain
brand awareness and customers for both partners. Other pop ups deliver on experiential
retail. Examples include:
Pop Up Stores inside Established Retailers
Macy’s STORY for those new and online brands looking for a pop-up location drives traffic for both
brands and creates new experiences for their customers
Warby Parker + Everlane + Nordstrom – Pop-In at Nordstrom features the mostly online retailer’s
merchandise and is a rotating Pop-In location within Nordstrom also featuring hot brands like Warby
Parker
Best Buy + Samsung – Open house pop ups in locations to showcase new electronics brands to
their customers
J Crew + We Work + LinkedIn – pop up shop series and panels for young professionals to learn how
to be successful and how to dress for success
Philanthropy Captures Community & Global
Philanthropy to connect to customers is an important aspect of every business today. The
younger generations connect both locally/globally and care about how retailers are giving
back and helping them make the world a better place. They connect on causes that matter to
them which is why cause-marketing has been so important to many businesses. Retailers as a
whole have always given back through multiple channels like Target & Unicef, A few of the
many follow:
Hanes + Salvation Army - Hanes is matching purchases with donations and providing an outlet for
customers to engage in program
Patagonia + For the Planet – Pategonia donates 1% for the Planet a network of more than 3000
approved environmental organizations worldwide
Lush + 850 Different Charities - Charity Pot – which are little containers of lotion with a charity on
top. All proceeds go to the charity and allows customers to connect to small nonprofits that matter to
them and providing exposure to the smaller charities in need
Walgreens + Red Nose Day Fund – Walgreens provides all proceeds to this fund to ensure children
living in poverty are safe, healthy and educated. This program success is going on its 5th year
Petco + HelpingHeroes provides gifting and donations from customers in store and online to support
service, therapy and working animals. Petco also partners locally with shelters for adoptions and
fostering of animals
9. PARTNERSHIP MODEL FOR SUCCESS
What's Your Partnership Strategy?
Creating a partnership strategy for your business requires an understanding of your customers today and those
that you want to engage in your future. Not every partnership model will fit every retailer but what we are
certain of is that partnerships are the NOW and the FUTURE of retail and will be instrumental in over success.
The top criteria for a successful partnership should address the following criteria:
Meets your customers’ expectations and resonates with your brand whether
that’s experience, convenience, philanthropy or co-branded products
You stay true to your Brand, staying in your lane whether through a natural
extension or through services that add value to your customers and your
brand
You create a Win-Win-Win for you, your partner and your customer
ShopperX Lab and Demand Worldwide have formulated a program to assist retailers and brands in
identifying the best partnerships, structuring those partnerships for optimal success and getting you
there faster through testing and learning from others in our community. The combination of our
strategic consulting & advisory services and learning labs brings retailers and brands together in a
community to discuss real-life examples and programs.
Understanding your customers through their journeys and engagement with your brand, identifying
partnership opportunities that should be included in your strategy, and identifying who owns each
partnership within your organization begins our engagement together. Through our program, we
will assist you in the development of a Partnership Strategy that fits your brand and customers
providing the Win-Win-Win Formula. Aligning as an organization on the outcomes and expected
benefits including revenue streams, brand recognition, connections to new audiences, customer
loyalty, increased traffic in-store and online, are all important to identify and agree upon from the
start.
Our program will walk you through a series of steps starting with the customer journey if you have
not already defined these or we will leverage the work already in place.
10. Power of Partnerships
D E M A N D W O R L D W I D E + S H O P P E R X L A B
t’s time to think outside the box – as long as you stay true to your brand and
customer. Partnerships are a strategy that we believe are essential to the immediate future
for retailers and provide many solutions to challenges retailers are facing today. How to get
to market faster? How to fill the white space in my stores? How to increase foot
traffic? What experiential retail is right for our brand? How can I test a market or new sales
channel before jumping in full throttle? Partnerships done right will get your brand in front
of new audiences; add value to existing audiences; add convenience; provide entertainment;
increase loyalty and boost revenue streams.
Partnerships build trust, brand equity, and stickiness. As we all seek to enhance one-on-one
connections with our customers and gain the loyalty of the new connected consumers and
younger generations, these partnerships provide an avenue to get there faster, more
efficiently and in some cases with much less risk to your brand and bottom line.
Community is a driving force today amongst retailers and brands. It is one of the reasons we
formed ShopperX Lab to provide our members with opportunity to share, learn and possibly
find the perfect partner for your brand. To succeed, we need to collaborate and work
together. There are so many opportunities that will add value without diluting what your
brand stands for and doing what you do best. Reach out to us and let’s have a
conversation! We are passionate retail experts that are constantly learning and have a lot to
share.
Our focus is on your success!
In Summary & About the Author
Paula Levy is widely recognized as one of retail’s foremost experts on Customer Engagement,
Sales Associate tools, CRM, Marketing Automation, Loyalty and Consumer Analytics. As a
seasoned business technology strategist, author, and speaker for 20+ years, Paula has stayed on
top of innovation and the changes retailers are facing including extensive research on GenZ and
their impact on the retail industry.
Today, Demand Worldwide, a boutique consulting agency for customer experience strategy and
ShopperX Lab, a new membership model built on a platform of community, innovation, and
expertise is dedicated to accelerating retail transformation that will engage and delight
shoppers.
visit demand worldwide.com and shopperxlab.com to learn more
By Paula Levy, Chief Strategy Officer
Demand Worldwide & ShopperX Lab