The complete guide to brand collaborations

From Simon and Garfunkel to Ben and Jerry, some partnerships prove that two really is better than one.

The same can be said for iconic duos in the consumer goods space. A few are so ingrained in our minds that we forget they’re technically two companies teaming up to create a single co-branded product: Taco Bell’s Dorito taco shells. Betty Crocker’s HERSHEY’S chocolate frosting. Tide Plus Febreze.

Co-branded collaborations are on the rise among retail stores and brands of all sizes. We’ll dive into some of their ample benefits, but essentially they are a creative approach to reaching a wider audience, while sharing costs and labor with a partner.

This isn’t a simple strategy to execute: Extensive research, planning, marketing and even legal contracts all play a part in successful collabs. You also don’t want to get involved in something that gives you flashbacks to that school project where one kid failed to pull his weight but got the same amount of credit. But when done strategically – with the right partner at your side – the payoff can be very worth it.

Have we gotten your attention? If co-branding sounds intriguing to you, read on to learn:

What is co-branding?

Co-branding – or a brand collaboration – occurs when two or more businesses team up and put both of their names on a project. It can take a lot of forms: A single or collection of products, event, pop-up shop, marketing campaign, licensing deal or fundraising/social awareness project.

Why should I do a brand collaboration?

Brands choose to partner for several reasons:

Examples of successful brand collaborations

Lilly Pulitzer x Target

It was the brand collaboration that broke the internet (not kidding — the website experienced multiple issues from the traffic overload). In 2015, luxury resort wear brand Lilly Pulitzer partnered with Target on a limited edition line.

The new products ranged from $2 to $250, with most under $30 — a significantly lower price point than the brand’s everyday line, which boasts dresses in the $100 to $400 range. Several pieces were offered in plus size, another departure from the existing Lilly products, which – at the time – were rarely sold above size 16. So it’s clear how the collaboration helped Lilly Pulitzer reach more than one new group of potential customers.

And even though the affordable collection was a single event, some retailers refer to it as a gateway drug: It got many Target-acquired shoppers into Lilly Pulitzer’s corporate stores for the first time (and quickly turned many of them into loyal customers).

Target, on the other hand, is a massive chain known for its affordability. Working with higher-end designers like Lilly Pulitzer (and later Vineyard Vines, Hunter and Marimekko, among others) elevates the Target brand and sets it apart from competing big box retailers.

adidas x Peloton

Whether you’re on the Peloton bike, tree-posing your way through one of their yoga classes or sweating through a guided run, you’ll be in the market for some sort of activewear. So, an adidas and Peloton partnership feels like it could sell itself. In 2021, the pair launched their first joint collection of apparel and gear. Despite adidas already being a household name, competition in the athleisure space is fierce — here was a fresh way to get back on people's radars and capitalize on the new user surge Peloton saw during the pandemic. And for Peloton, the ongoing collaboration (and exclusive classes that came with it) reminds consumers that the subscription-based fitness service and retailer is not just for elite cyclists who can afford a $2,000 stationary bike.

Keds x Rifle Paper Co.

Stationery and art brand Rifle Paper Co. lends its iconic, whimsical prints to the popular footwear retailer, releasing the first of several co-branded collections in 2017. At the time, Rifle Paper Co.’s product line was heavily focused on greeting cards, home accessories and other paper goods — here was a way to test a new merchandise category, with an established shoe brand doing the heavy lifting. Keds – like adidas – already has a legacy, so collaborations help them stay relevant while capitalizing on the following of their co-brand. The shoe brand also worked with Kate Spade New York, Taylor Swift, Major League Baseball and many others, so the formula works.

Charli D’Amelio x Dunkin

What do you get when you mix a national coffee chain with a teenage TikTok star? A wildly successful marketing campaign (and one super sweet drink). Dunkin’ teamed up with social media influencer Charli D’Amelio on a limited-edition beverage, aptly named the Charli. It was a way for them to tap into her heavily Gen Z audience, and it paid off: Dunkin’ saw a 57% increase in app downloads and sold “hundreds of thousands” of her signature drink on release day.

What’s the incentive for Charli? Here’s a co-branding example in which one brand is likely fronting the entire cost, with a portion of that going to the other party (in this case, the influencer). But on top of the influencer’s paycheck, they’re also getting to add the co-brand to their resumé. As companies evaluate influencers to work with, they want to know who else they’ve been sponsored by. Charli having done a collaboration of this scale with a name as big as Dunkin’s is certainly something to write home about.

Quay x Lizzo

In 2020, Grammy-donned superstar Lizzo designed two lines of sunglasses for Australian eyewear brand Quay, both with a philanthropic element. The first collab’s sales supported Feeding America — with every purchase, Quay provided at least 100 meals to people struggling with hunger. The second focused on empowering and educating voters, with $100k of proceeds benefiting the NAACP Legal Defense and Educational Fund, Inc. and the Lawyers' Committee for Civil Rights Under Law. So as if seeing Lizzo’s name attached to the line wasn’t enough, the timely charitable component generated ample buzz and sales as well.

Feeling inspired? Those are some big names with major marketing budgets, but you can absolutely apply their sales strategies to your small business.

How to develop a brand collaboration

Find a partner

First things first: Who do you want to collaborate with? There are a couple ways to go about this. If you have a partner in mind, put together a proposal and reach out! Depending on the size of the brand you’re going after, you may have to dig to get to the correct contact, as the business owner may not sift through outreach like this themself. Poke around LinkedIn for an appropriate employee, and if you come up empty, PR is usually your next best bet.

If you have a product or campaign in mind, research who would be a good partner. A reminder that it doesn’t have to be another retailer — it could be another industry business, influencer or even a media company (Lifestyle retailer Hill House Home worked with Phenomenal, Netflix and Shondaland on a collection of Bridgerton-inspired dresses to promote the show).

As you evaluate partners, one of the most important things to keep in mind is your values must align. No fancy name or massive revenue potential is worth damaging your reputation over. Look at how they engage with their followers on social media and react to customer service questions. Search for press mentions, study their “about” page and media kit. Is this someone you would be proud to associate with?

Your target audiences also have to align. Do they have to be interchangeable? No: That’s why collaborations can be so successful — they get you in front of a group you may not have reached otherwise. But the partnership can’t come totally out of left field, just like the MLB probably wouldn’t partner with a women’s swimwear brand, or a tween clothing company with an alcohol distributor.

Brainstorm, collaborate and execute

You’ve found each other — get ready for a slew of meetings! Here are things to consider and discuss before getting too deep into anything.

Questions to ask a potential partner:

On that note, you should always consult with legal counsel before entering into a partnership and document everything through signed contracts.

Now it’s time to create some magic. If you didn’t come into the partnership with an idea, treat this time like any product or campaign launch: Perform market research and find voids you may be able to fill, customer needs you can address or trends you can capitalize on. Decide on a timeline and launch date. Crunch numbers and calculate your sales goals and what you’ll have to spend to reach them.

One thing you don’t necessarily have to agree on is your overall goals for the collaboration. Consider the examples we touched on earlier — both companies are getting something out of the work, but maybe not the same thing. One of you may want to test a new product category, whereas the other is more interested in aligning themselves with a widely known brand. Or you may want to get in front of a fresh audience for new customer acquisition, but your partner is focused on boosting their existing customer loyalty and customer retention.

What you do need to do, though, is be transparent about each of your goals and figure out how to rely on each other to get the best possible outcome.

Finally, leave each conversation knowing the next steps you each are responsible for and the timeline.

Set marketing expectations early

When you’re heads down in planning, it’s easy to forget to discuss what happens post-launch. Your partnership doesn’t end once your products hit shelves: Co-branding has to lead to co-marketing. Discuss what you each expect from the other in terms of promotion — both labor and cost. Perhaps you’ll create a budget and split everything right down the middle. Or, you could divvy up, with one party taking care of things like in-store events and PR and the other owning paid digital advertising. It will all depend on the nature of your collab, your expertise and what you’ve already brought to the collaboration. For example, if you’re partnering with an influencer, the bulk of their contribution is the digital marketing.

Some questions to ask as your form your marketing strategy:

How to make the most of co-branding initiatives

Most brand collaborations are around for a limited time, but you want your efforts to have a long-term effect. This is especially true if your goals concern acquiring new customers and/or increasing repeat purchases from existing customers.

Data will be key here — both how you collect and share it. As you’re setting expectations, discuss your data share policy. Hopefully at least one of you has a point of sale with powerful custom reporting and the ability to download and share reports easily. Those reports will be invaluable for looking at things like sales and margin (and will be downright necessary for revenue distribution). But you also have to decide if you’ll share each other’s customer data — something that will come up if you each sell through your own channels. Personal data collection legalities vary by state, so you’ll want to research any fine print that has to be added to your websites.

As far as what you do with that customer data to increase their lifetime values? Well, that’s a whole other story! You’ll want to check out how to use retail data to boost sales and how personalized follow up email marketing can improve the customer experience and increase retention.

Looking for more inspiration? Head on over to The Entrepreneur’s Studio: We’ve hosted entrepreneurs and influencers who’ve participated in widely successful licensing deals and co-branded collabs. We hope their stories – along with others’ – inspire you to take the next step in your business, whatever it may be.

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