Power of Partnerships

Power of Partnerships

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  Power of Partnerships DE 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. 
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  In our searchfor 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:
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  PROGRESSIVE PARTNERSHIPS Worked withover 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
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  PROGRESSIVE PARTNERSHIPS Retailers witha 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
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  Experiential Retail isa 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.
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  Product Extensions that meetyour 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
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  Luxury Brands Lookto 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
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  The Remix Era RalphLauren + 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
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  PARTNERSHIP MODEL FORSUCCESS 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.
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  Power of Partnerships DE 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