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2.4 Case Study

 

Well known fashion designer Stella McCartney collaborates with Sports Conglomerate Adidas

Stella McCartney is hoping that you’re going to throw away your old tracksuit and trade-up to her co-branded collection with sportswear giant adidas. Like all the best brand collaborations, this one shuns convention and breaks down the usual fashion distinctions. After all, why wouldn’t we want to work out in sportswear that is practical and stylish? “Stella McCartney by adidas” manages to tick both boxes by sharing the resources and brand equity of both names to create something that neither brand could have developed quite so successfully (and rapidly) alone.

Stella McCartney by adidas is just the latest in a line of brands cross-dressing unexpected concepts as well as names. Typically brand collaboration sees a more exclusive company hooking up with a larger well-known brand, as adidas has in the past, and as H&M flirted with last year when it created a limited collection with Chanel supremo Karl Lagerfeld. But whatever the motive, each collaborator hopes to gain something from the relationship without cannibalizing either audience; the parent brand earns kudos and the smaller name is exposed to a wider market.

Collaboration is not an entirely new idea (for decades car manufacturers have been sharing resources behind the scenes) but the increase in brands capitalizing on making their alliance visible is new. It appears that two brands can be stronger than one in the eyes of consumers.

The collaboration story began in earnest toward the end of the nineties when sports companies began to widen their net and create products aimed at a lifestyle audience.

“Collaborations have been born out of a recognition we’ve made that, although sports is our foundation, our interaction with customers doesn’t need to stop at the playfield,” explains Neil Beeson, general manager of Puma’s sport fashion division, a team set up to address this growing market. “And it’s born out of a realization that design is at the heart of what we do,” he continues. “Alternative types of collaborators, bring different perspectives to your business.”

In March 2005, Puma, one of the pioneers of “sport fashion,” announced it had taken brand collaboration one-step further by opening its first multi-branded store. The store houses its collaborations with Philippe Starck, Neil Barrett and Christy Turlington all under one roof. Sited among the hip hotels, boutiques and bars of New York’s fashionable meatpacking district, the store adheres to one of the key motives behind co-branding: to root the brand in credibility among fashion-savvy shoppers. Ever since Run DMC sang the ode to low-cut sneakers “My adidas,” brand owners have recognized that if their brand is seized upon by the in-crowd, their influence will radiate out to the high street.

The multi-branded store enables a large brand like Puma to re-connect with its customers and get personal. It’s a U-turn from the biggest-is-best ethos of retail temples pioneered by Nike (which opened its first Nike Town in 1990). This new kind of retail experience positions Puma as a brand nurturing rather than monopolizing innovation. “When you travel abroad you find that one concept store looks the same as another,” continues Beeson. “But our model isn’t too dissimilar to that of a boutique. A boutique owner presents his own view of the world and becomes a sort of designer in his or her own right. It’s the same with the multi-branded store, except we control the access point ourselves.”

Which bring us to a further key motive behind brand collaborations: the ability to “crossover” a brand into new markets and attain instant credibility. While many brands still shy away from co-branding as a route to growth, collaborations afford a brand an opportunity to tentatively chance its toe in the water and innovate. This can potentially remove some of the risks associated with leaping head first into brand and line extensions.

That’s not to say that brand collaborations aren’t without their risks. In January 2005, Pharrell Williams, the musician and designer behind Bathing Ape, fell out with Reebok over its Billionaire Boys Club (BBC) collaborations and threatened to sue for US$ 4 million dollars.

According to media reports at the time, Williams said, “Reebok could not adequately produce the full range of licensed products in a manner consistent with the design and quality standards and specifications required by BBC.”

The legal wrangling was quickly smoothed over out of court, but Matt Hirst, youth trend consultant at Headlight Vision argues that the Reebok case stressed an important lesson for large brands poised to enter into brand partnerships. “To be credible, it’s massively important that the collaboration holds up, which means that the bigger brand needs to cede control over to the collaborator,” he argued. “Reebok just hadn’t given full support to the artist. It shows just how wrong it can go.”

Paddy Meehan, managing director of design group Oki-Ni, says “In our experience, the creative process is smooth. When you work with a large brand, it’s the bureaucratic aspects that become most complex. They’ve got so many territories, existing agreements and so on already forged.” Oki Ni creates limited edition projects for the likes of adidas, Honda motorcycles and Levis, and sells them online to a global “in-the-know” audience.

Meehan says that the process cannot be easily repeated and mass-produced, “Every single product is different. All our adidas shoes must have the three stripes. In the past we’ve tried to push for less overtly branded products, but there are some things that brands just won’t let us change and we understand that. Once we know our parameters, we push that as far as we can. But we found that there’s no set rule; all big brands are structured differently. There are so many levels, it’s just not do-able to approach every project in the same way.”

So far, many of the brand collaborations are “one-offs” or limited product runs designed to generate a buzz. Plagued by ill-defined returns, is there a more sustainable case for brand collaborations? Puma’s Beeson thinks so, “We certainly believe that collaborations can do two things. First, it can act as a brand enhancer. Second, it can turn into a business opportunity. But it depends; new collaborations take a few seasons to establish.”

Could someday Sony and Nintendo work together on an overtly co-branded commercial venture? Oki-Ni’s Meehan squarely thinks not, at least in the foreseeable future, “My experience is that brands are too protective to co-brand for wider, commercial reasons. It’d be an interesting conclusion to the process. It’d have to be a fairly brave brand to go for something like that.”

For now it seems, the main value of collaboration isn’t always an immediate monetary one. But viewed another way, collaboration is a way to earn respect in the right places: “eBay gives collaborations a second life,” suggests Hirst of Headlight Vision. Hirst points to a rare pair of Nike training shoes on eBay that feature (of all things) an embroidered pigeon on its heel. Since the launch of this particular collaboration in New York a couple of months ago, the shoes have been selling for many times their original price tag, “If you weigh up the cost of producing limited edition shoes against the budgets of most ads, then they’re good value. It allows brands to get into the right, real places, something ads couldn’t do alone.”

Although mostly produced on limited runs, the true value of brand collaborations might be sought in their lasting impact. If they’re still in demand on eBay months later, a collaboration could well be on its way to attracting the intended crowd and just the right sort of attention.

Videos on Brand Collaborations

http://groupynetwork.com/video/brand-collaborations/

Part 1 – Are Brand Collaborations played out or overdone? Or will they always be relevant/effective?
Part 2 – What criteria do you use to choose partners?
Part 3 – Walk us through the process of a typical collaboration
Part 4 – What is the timeline of a typical collaboration?
Part 5 – What are the hurdles in the marketing process specifically? Who typically “takes the reigns” on marketing or is it always a 100% joint effort?
Part 6 – How do you measure success? Is it purely sales driven or are there other factors?
Part 7 – What was your most successful collaboration?
Part 8 – How using collaborations to help launch your brand into Action Sports arena
Part 9 – What would be best practices/items to avoid or advice to give others in considering a collaboration with another brand
Part 10 – How is marketing & advertising split up among the brands?
Part 11 – What was the actual collaboration with 686 & Levi’s?
Part 12 – How did the relationship with Levi’s & 686 occur? Was it a marketing or a business exercise to work together?
Part 13 – How is the production costs split among the brands?

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