CollaBrands: Co-Branding in the Digital World

This week our focus is on the growth of digital co-branding — partnering with digitally native brands to increase brand awareness and drive consumer demand. Although “digitally native brand” (DNB) is a relatively new term that has developed over the past decade to describe consumer-facing companies that have their origins online that are developed over the internet, the ancestors of today’s DNB are videogames. Pioneering DNB A half a century ago, a company called Atari created the first successful arcade game, Pong. The world has been playing video games ever since. From the very basic Pong of 50 years ago, gaming has evolved with both sophisticated graphics and strong storytelling able to immerse players into virtual worlds. Thus, in the marketing arsenal for brands, video games are one of the most powerful digital tools available. Luxury Meets Gaming Luxury brands discovered that collaborations with video games can serve as a great introduction for younger consumers to experience and afford high-end labels by offering “skins” for game avatars. In many games nowadays, players can select the specific features of their characters in great detail, often including a choice of fashionable styles from designer brands. For example, take the pandemic’s mega-hit from Nintendo, Animal Crossing: New Horizons, which includes skin designs from Valentino and Marc Jacobs. Just as fashion has strong appeal IRL (in real life), gamers also seek to flex their designer-skinned avatars against other players. Luxury fashion brand Louis Vuitton is another heavyweight in the field, collaborating with game developer Riot Games to create a series of digital skins for characters in the hugely popular League of Legends along with capsule collections that can be worn in real life. Champion x Tafi A two-year-old company, Tafi, has become a top creator of custom 3D content for avatar and emoji systems, and Champion Athleticwear recently announced a collaboration with Tafi tied to its Spring 2021 collection utilizing NFTs (non-fungible tokens, the hottest digital trend of the moment) and Samsung Galaxy's AR Emoji, through which the three companies are riding the new wave of digital fashion and personalization. As with many NFTs, Champion’s virtual spring collection was launched via auction, and includes iconic and exclusive Champion artwork as well as limited-edition avatars inspired by the brand’s heritage, offering an innovative model for sharing new products that build on a brand’s history. A Tasty Collaboration Buzzfeed, the digital global media company that was born online, launched its viral food brand Tasty in July 2015. In less than six years, its addictive Facebook video series focused on comfort foods has reached more than 100 million followers and has since expanded to YouTube, Instagram and Twitter. Two years after its debut, Tasty partnered with Walmart to develop Tasty branded merchandise in the cooking and the home goods categories, and the collaboration’s popularity led to extensions into food and even an app to integrate grocery shopping with recipes from Tasty’s library of more than 4,000 videos. An enlightening takeaway can be noted in the graph below: The three-year trend in Buzzfeed’s share of revenues from commerce (encompassing both e-commerce and Walmart brick-and-mortar sales), increasing from 9 percent of total revenues in 2017 to 21 percent in 2019. Clearly, Tasty is an appetizing model of content driving commerce. With so many extraordinary examples of successful brand collaborations in the digital world, CollaBrands will continue to explore more examples in future columns. Steven Ekstract is Managing Director of Global Licensing Advisors, a consultancy that provides companies with insight and strategic direction to succeed in the $300 billion a year licensing business. Ekstract is the founder and former Publisher of License Global magazine, the leading information source for the consumer licensing business. He can be reached at steven@globallicensingadvisors.com.

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CollaBrands: Co-Branding in the Digital World