5 Reasons Why Brand Partnerships Are the Future of Retail
When it comes to the way we shop, the speed of change today has surpassed the ability of most brands and retailers to keep pace. And with the coming 5G rollout, innovation and change will only continue to accelerate.
After all, building an effective multichannel ecosystem that offers a wide enough range of products and services — to avoid losing customers to the likes of Walmart and Target — takes time, money and resources that most retailers simply don’t possess.
So, what’s one of the best ways for any retailer to deliver on consumers’ ever-evolving needs and drive loyalty without overtaxing resources? It involves building an ecosystem of partners to help share the burden of meeting customer expectations while keeping customers coming back regularly.
Here are five reasons why brand partnerships are elevating retailers today — and will continue to do so well into the future:
1. Add new categories and customers.
Recently, big-box retailers have partnered with smaller established companies to enhance their online and offline ecosystems while enticing shoppers to visit more often.
For instance, Nordstrom’s recently announced partnership with Tonal adds a new fitness category to stores while leveraging Tonal’s existing supply and fulfillment system. Target’s placement of Ulta Beauty shops within its stores instantly elevates Target’s beauty category. And the partnership between CVS and GlamSquad to add styling services and GlamSquad products to pharmacy locations helps reach more millennial and Gen Z customers — and expands its hair care category with already popular products and services.
2. Ramp up technology more quickly.
Partnerships can enable digital transformation faster and more efficiently by sharing the cost and bandwidth needed to integrate new tech-driven systems. By partnering with a brand that already has such expertise and resources at their disposal, the learning curve for retailers is substantially shortened.
Walmart’s partnership with Verizon, for example, puts Walmart on a faster track to integrate 5G capabilities into its big-box stores than if it were to build the infrastructure itself. Overall, leveraging Verizon’s expertise allows a far more rapid program rollout as well as ongoing support for troubleshooting and maintenance — all without taxing Walmart’s in-house teams.
3. Tap into ‘essential’ status.
In 2020, many retailers that didn’t qualify as “essential” during the pandemic saw shattering drops in their revenue due to reduced traffic from store closures. This prompted several brands and retailers to partner with retailers classified as essential — like big-box and grocery stores — to maintain a physical connection to their customers regardless of unforeseen world events.
Although it was announced in January 2020 — just prior to the onset of COVID-19 — the partnership between DSW and Hy-Vee quickly proved its worth. By placing DSW shops in select Hy-Vee stores, DSW gave its customers the option to buy online and pick up in stores. Considering that store closures last year caused DSW an almost 43 percent drop in sales, expanding this program in 2021 is top of mind for the shoe retailer. It plans to add this program to more Hy-Vee locations in 2021.
4. Access to brick-and-mortar benefits.
E-commerce has allowed the emergence of direct-to-consumer (D-to-C) brands over the past few years, but many online-only companies lack access to brick-and-mortar locations. This often results in higher costs for fulfillment and shipping, waning shopper loyalty, and lower profit margins.
Nevertheless, small brands — even those unable to fund full shop-in-shop programs within major retailers — can still reap the benefits of brick-and-mortar. Partnering with shopping centers, department stores, or even convenience stores to provide locations for customers to pick up or return products can potentially reduce last-mile fulfillment costs.
Carving out showrooming space within existing retail locations (where you share a customer demographic, of course) allows you to expand your multichannel capabilities. After all, reaching customers across online and offline channels is crucial considering that multichannel shoppers spend 4 percent more when inside of a store — and 10 percent more when online.
5. Shared staffing resources.
D-to-C brands (including established ones such as Apple) often struggle with access to sufficient customer-facing staff. To quell this issue, Apple just elevated its longstanding collaboration with Target to create dedicated Apple shops within Target stores — and an enhanced experience on Target’s website and mobile app. Apple benefits from having Target staff members available to handle in-store or curbside pickup, localized last-mile fulfillment, and in-store customer service.
In today’s lightning-speed retail environment, it takes a village to sustain a successful omnichannel experience that offers a high level of convenience, product range, fulfillment choices, and customer service that has become expected by most consumers. Although “location, location, location” was the hallmark of retail success in the past, success will be determined by the quality of partnerships a retailer holds.
DeAnn Campbell is leading the next evolutionary era of retail: the shift beyond converged commerce to Harmonic Retail,™ where online and offline experiences don’t merely integrate, they interact, enrich, and react upon one another to create a living, harmonized brand expression throughout the customer journey. DeAnn is the former vice president of retail strategy and insights at Harbor Retail, a design + build firm.
DeAnn Campbell is leading the next evolutionary era of retail: the shift beyond converged commerce to Harmonic Retail,™ where online and offline experiences don’t merely integrate — they interact, enrich, and react upon one another to create a living, harmonized brand expression throughout the customer journey. DeAnn holds a bachelor’s degree in architecture, is LEED ID+C accredited, and is the former VP of retail strategy and insights at Harbor Retail, a design + build firm.