Co-branding: The technique that enables fashion brands to increase their annual revenues by 30%

Kenzo x Asics, Adidas x Gucci, and H&M x Paco Rabanne: these are just a few examples of co-branding collaborations that have captured the fashion world’s attention. As these partnerships become more prevalent, they reveal a strategic approach that enables fashion brands to significantly enhance their annual revenues, often by as much as 30%.

According to industry projections, the fashion sector is poised to grow between 2% and 4% this year, indicating a robust landscape despite economic uncertainties. Co-branding emerges as a pivotal strategy in this context, driving growth and visibility.

Understanding Co-Branding in Fashion

Kenzo x Asics, Adidas x Gucci, H&M x Paco Rabanne… Co-branding is in fashion, and brands are doing it with a clear goal: to multiply their profits, expand their customer base, or give the brand a fresh touch. Added to this is the increase in visibility on social media, one of the key marketing techniques in the fashion sector. According to a study by the Marketing Science Institute, brand visibility can increase by 30% as a result of collaborations.

According to Valérie Lamy, program manager of the MSc Fashion & Luxury Marketing at TBS Education-Barcelona, “we are increasingly seeing more luxury fashion brands collaborating with others that no one would have imagined, thus generating a surprise factor that attracts a lot of attention and increases public interest.” Lamy points out that “the goal of these collaborations is also to elevate the echo of the brand among the followers of the brand you are partnering with and make the brand more relevant to this new audience, as well as create anticipation and drive conversations and earned media.”

Joining forces is a successful option: according to Forbes, brands that venture into it can achieve almost 30% more annual revenue. This is a fundamental factor to consider in a context that predicts possible difficulties for the fashion sector: “at a time when inflation or economic instability have become major obstacles, betting on co-branding can be a key action for the brand,” notes Lamy. Despite this, luxury fashion is expected to have a good year overall: a McKinsey study reveals that the fashion sector will grow between 2% and 4%, with luxury fashion expected to generate most of the economic benefit.

However, to carry out a successful collaboration, several factors need to be taken into account. “We are in the era of ‘collab fatigue,’ what used to be commercial strategies between luxury brands and sports brands has now extended to all fashion brands within the mid-price segment. We see brands like Zara or Mango opting for several collaboration drops with designers or influencers to bring freshness to the collection while generating public and media interest. “It is increasingly difficult to stand out in a constant frenzy of collabs,” explains Andy Tsai, collaborating professor at TBS Education-Barcelona. To counteract this era of ‘collab fatigue,’ TBS Education-Barcelona recommends that brands ask themselves questions such as, what objectives do we want to achieve with the collaboration? What is the brand’s positioning? Or in which territories is the brand relevant and can it gain credibility?

Keys to Successful Co-Branding

Andy Tsai of TBS Education-Barcelona reveals what luxury fashion brands are focusing on when making collaborations:

• Authenticity. Luxury brands look for others whose mission and values are consistent, which allows for more authentic results and pieces. Moreover, “if the essence of one brand is similar to the other, there is a higher chance that potential customers will also align with the values of the other brand,” explains Tsai.
• Surprise factor. Attracting public attention is key when it comes to collaborating. Launching unique products with brands that no one expected is another technique marketing uses to surprise and generate visibility. Collaborations like Christian Louboutin x Disney have emerged from this idea, brands that no one expected to match, but which have not left anyone indifferent.
• Strategic partners. “You don’t always collaborate with who the brand wants, but with who fits the objectives. Depending on whether you seek more visibility, better sales, or to strengthen or increase the clientele, brands choose one firm or another,” explains Tsai.
• Creativity. Whatever the purposes of the collaboration, “innovation and creativity cannot be overlooked.” This translates into seeking unique results and going beyond the product, also offering experiences or any other tools that marketing has to impact the public.
• Story: what inspired the union of the two parties, what is the story we can tell. Today, the public is not interested in just seeing another collaboration, but in knowing what makes this union different.

Correctly evaluating these points is essential to ensuring the success of the collaboration. For this, “it is necessary for brands to have specialized profiles in the design and execution of marketing strategies in the fashion and luxury sectors,” explains Tsai. These are two competitive sectors where more and more young people want to pursue their professional careers. This is reflected in the demand for programs like the MSc Fashion & Luxury Marketing at TBS Education-Barcelona. It is a master’s degree that prepares students to work with leading brands through cutting-edge training, a practical methodology, and a data-driven approach. According to Valérie Lamy, program manager of the master’s specializing in fashion and luxury marketing, “in a world so influenced by new technologies and the constant emergence of trends, it is crucial for future fashion marketing professionals to stay up-to-date with all these currents.” This way, young talent will reach future brand collaborations.

For more information on the MSc Fashion & Luxury Marketing program: