The Power of Partners in Retail

The Power of Partners in Retail

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The idea of high-street brands teaming up is nothing new – we’re pretty accustomed to seeing a coffee shop as part of a bank or concession stands within department stores or in the likes of Boots...

Post By Thomas Fletcher-
Projects Director


Partnerships for a better customer experience

Looking even further back, marketeers have been developing retail partnerships for years through affiliate programs like coupons, cashback and comparison sites.  Today, this broadens out even further to include the world of social media, with influencers, bloggers and endorsements all available to consider as part of the mix.  

It makes sense that the most effective partnerships are those that are mutually beneficial: creating cost efficiencies, expanding into broader markets or demographics, building customer loyalty and taking a greater share of disposable income.  As retail continues to face challenging times, it also makes sense as a market differentiator in a crowded sector, giving both brands a new marketing angle and with it, a whole host of opportunities to increase their individual and collective brand profiles.

For a retailer with a large store footprint, brand partnerships can be an effective way of utilising otherwise unnecessary space by creating a whole new customer experience within its existing environment.  This has been particularly effective in the food (supermarket) sector where some superstores are now offering independent travel agents services, dry cleaning and even beauty treatments all before a customer leaves the store. 

It also works to create a better customer experience.  In Mothercare, for example, the brand recognises the challenges new parents can have in shopping with their families all at once as so in many stores, offer brought in partners who can deliver a café, hairdressing service and even soft-play area.  This makes the customer feel special and that their needs have been considered, leading to greater goodwill towards the store and in turn, a higher level of spend.

Given the state of flux the high-street finds itself in at the moment, a strategic brand partnership can also be integral to brand transformation and/or reinvention.  Earlier this year, Ocado and M&S announced their food-based partnership, surprising many who many thought the Waitrose deal would be extended.  For M&S, who are in the midst of a five-year turn-around programme, this is an ideal opportunity to ramp up their ecommerce capabilities which so far, have largely ignored their growing food offering.  In return, Ocado will stock M&S own-label products and benefit from their database of 12miillion M&S food shoppers.

This points to a growing trend of successful partnerships between a primarily bricks and mortar brand, and a digitally-led brand who are able to tap into the benefits of each partners approach without having to invest heavily in the infrastructure needed to achieve this independent.  There are also other cost-saving benefits such as increased buying scale, conversion of customers and joint marketing.  For M&S, this number sits at around £70m so by no means insignificant.

The value proposition of the partnership also has to make sense.  The brand partnership can absolutely bring together unexpected brands as long as it offers a greater customer experience and adds value to the customer’s retail expectations

However, there are some downfalls to be aware of regardless of how well-known and established the retails brands planning to join forces are. There will always be challenges, partially where brand values and identity are well-established, so a successful partnership must make strategic sense for both sides.

It’s important for both brands to maintain their own strategic priorities and to continue to invest in their own growth capability.  Borders, the books store that went into administration in 2009, had outsourced its ecommerce platform to Amazon and consequently, never developed its own capability in this area.  This created insurmountable challenges as online became the norm and is a significant factor in its demise.

The value proposition of the partnership also has to make sense.  The brand partnership can absolutely bring together unexpected brands as long as it offers a greater customer experience and adds value to the customer’s retail expectations.  While a hearing clinic in Boots is a natural evolution from its optician’s service, it would make little sense as a pop-up in a high-fashion store designed to appeal to millennials.  Launching a fashion line with a celebrity or influencer that is key to your target market or placing a complimentary concession in your retail store, for example beauty services or a champagne bar, is a far more compelling proposition.

An often over-looked area of brand partnerships is culture and change management.  Bringing together two brands can be challenging for the people sitting behind them and it can involve compromise, care and patience to understand how to make the partnership work beyond the glossy marketing or staged social media presence.  It’s unlikely this would be the undoing of a partnership, but its importance shouldn’t be underestimated.

The power of a brand partnership lies in its ability to bring together two names and make them stronger than the sum of their parts.  Individually, there will be strategic weaknesses that are causing a brand to consider a partnership in the first place, whereas the bringing together of physical experience and digital data and analytics through a partnership means brands are able to continually evolve their offering to become individually and collectively stronger.

As customers demand more from their shopping experiences, we expect to see this model increasingly dominate the retail agenda. Given the difficulties many high-street brands are experiencing at the moment, it could be the lifeline that many are looking for. 


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