Retail Partnerships: What You Need to Know

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Published on: August 4, 2023

A retail partnership is a mutually beneficial alliance between two businesses with complementary (but not competing) target audiences in order to boost sales, heighten brand awareness, and attract new customers to both businesses.

Example: GEICO + Helzberg Diamonds

In 2019, to promote a new jewelry insurance policy, GEICO partnered with Helzberg Diamonds for a series of commercials featuring Helzberg diamond rings and other products.

GEICO and Helzberg are not in competition: one sells insurance, the other sells jewelry. But there’s an important overlap in their target audiences: people buying expensive jewelry are likely to want jewelry insurance, and people buying insurance for valuable personal items are likely to buy expensive jewelry.

The partnership increased awareness for GEICO’s new insurance policy and provided valuable product placement for Helzberg. Both brands benefited from the collaboration.

In this guide, we’ll cover:

  • Types of retail partnerships
  • Key trends for the future of retail partnerships  
  • Benefits and challenges of retail partnerships
  • How to find the right retail partner

Let’s get started.

Why Should You Consider Retail Partners?

Retail partners bring a number of benefits to your business.

Attracting new customers

Of course, this is the most obvious benefit. Partnering with a brand that has an overlapping, but not competing, target audience helps draw more customers to your product—without losing your existing customers, because there’s no direct competition between you and your partner. A mutually beneficial partnership means new customers for both brands involved.

Increasing brand awareness

Partnering with a brand means tapping into their customer base. It’s especially helpful when you’re launching a new product or entering a new sales channel (such as an ecommerce brand getting products in physical stores)—a retail partnership with an established brand/retailer lends legitimacy to your business, as the other brand is “vouching” for you to their customers.

Sharing resources

Retail partnerships allow you to leverage parts of the other brand’s business, such as their fulfillment and distribution network, marketing resources, workforce, and so on. 

For example: In 2021, Target and Apple enhanced their 15-year retail partnership by dedicating in-store space to Apple mini shops, where customers can receive product demos and talk to Target Tech Consultants with specialized training from Apple. So, Target becomes a destination for Apple customers, and Apple utilizes Target’s space and in-store employees.

Accelerating technological capabilities

Similar to sharing resources, retail partnerships allow brands to leverage each other’s technological capabilities and digital infrastructure, rather than building their own infrastructure from the ground up. 

For example: In 2020, Walmart and Verizon began talks to bring 5G wireless service to select Walmart stores, allowing for faster connectivity for staff and customers. Verizon’s expertise would make 5G installation much smoother and faster, and using Verizon tech support for troubleshooting and maintenance would take the burden off Walmart’s workforce.

Driving sales

Many retail partnerships are cross-channel: i.e., an ecommerce brand teaming up with a brick-and-mortar retailer to bring their products into a physical store. Not only do they drive sales with the new distribution channel, but they can potentially offer online customers omnichannel options such as Buy Online, Pick Up In-Store. 

Alternatively, a brick-and-mortar retailer struggling with reduced foot traffic can partner with a retailer like Target or Walmart that has a much steadier flow of in-store shoppers. It’s another way to meet customers where they are, instead of convincing them to go to a new destination.

Deepening the customer experience

You may have noticed a theme in our predictions for the future: a focus on building deep, long-term relationships between brands and consumers, creating customer loyalty based on emotion and values rather than transactions. Retail sales strategy is moving away from the traditional “features and benefits” approach and toward personalization and immersion.

That’s why a successful retail partnership is so lucrative. The right partnership doesn’t just increase awareness or attract new customers—it deepens the relationship with existing customers, demonstrating that the brand understands their values, what they want, what they care about, what’s convenient to them, where and how and why they shop.

Types of Retail Collaborations

There are a few main types of retail and brand partnerships.

Sales and distribution partnerships

A sales and distribution partnership is when a retailer agrees to sell a brand’s merchandise in any of their sales or distribution channels: in-store, online, both, and so on. You can think of this as the most broad or general type of retail partnership. 

Example: Sephora x Colourpop 

Colourpop is a cosmetics line that started as a D2C (direct-to-consumer) ecommerce brand and now has distribution partnerships with brick-and-mortar retailers like Sephora and Ulta Beauty.

Ecommerce Partnerships

An ecommerce partnership is when a brand partners with an ecommerce retailer to sell products online. For brands interested in big-box retailer partnerships, an ecommerce partnership is generally much easier to secure—digital shelf space is unlimited in a way physical shelf space is not. Getting a product onto Target.com, Walmart.com, Amazon Marketplace, and so on is a great way for retail brands to reach potential customers without vying for in-store space.

Example: Best Buy x ZVOX Audio 

ZVOX Audio, a small-team consumer electronics company and industry leader in dialogue-boosting speakers, sells products via their website and on BestBuy.com, allowing for far greater customer reach.

Product and Brand Collaborations

A product collaboration partnership is when two businesses design and create a co-branded product (a product that combines branding from both businesses) in order to generate buzz, reach new customers, and drive sales. 

Example: Nike x Ben & Jerry’s

Sneakers and ice cream? It’s more likely than you’d think. In 2020, Nike and Ben & Jerry’s collaborated to release the Chunky Dunky: a sneaker inspired by the classic Ben & Jerry’s flavor Chunky Monkey. The Chunky Dunky was one of the most popular sneakers of 2020—and three years later, buying a pair on the resale market will set you back at least $1,000.

Marketing Partnerships

A marketing partnership is when two businesses strategically promote each other (often through a co-marketing campaign) without necessarily entering a distribution partnership. The businesses might promote or interact with each other on social media, create content for each other’s websites, co-sponsor an event or contest, sell complementary product bundles (rather than creating a single co-branded product), and otherwise work together to generate social buzz and brand awareness. 

Example: Uber x Spotify

In 2016, Uber and Spotify launched a partnership where rideshare app users could link their Uber and Spotify accounts in order to play their favorite music during an Uber ride. This strategy created marketing for both brands, encouraging Spotify customers to use Uber and Uber customers to use Spotify.

Events and Contests

An event partnership is when two businesses team up for a contest or other special event in order to tap into each other’s target audiences and drive customer engagement and sales. The businesses might host an in-store or online event (such as a pop-up, a celebrity appearance, a workshop, etc.) or co-run a contest (such as a fan art contest on social media). 

Example: Traeger Grills x YETI

In May 2021, barbecue grill company Traeger Grills teamed up with ice chest/cooler company YETI to celebrate National BBQ Month with a social media contest. Fans were encouraged to post photos of their backyard barbecue setup tagged #YETIxTraegerBBQ for a chance to win products from both brands.

Loyalty Programs

A loyalty program partnership is when two businesses offer rewards or incentives to each other’s customer bases or membership pools, driving brand awareness and customer engagement for both businesses. 

Example: American Express x Ray-Ban 

Many credit card companies have partnerships with a number of businesses to encourage consumer spending. American Express has countless Amex Offers partnerships with various brands, hotels, airlines, etc., including a partnership with Ray-Ban where AmEx customers get $30 back for every $150 spent.

How to Start a Successful Retail Partnership

Find the Right Partners

The most important part of a retail partnership is, of course, your partner. The right retail partners make or break successful collaborations.

What to look for in a retail partner

Complementary audience Complementary offerings Complementary operations Complementary alignments

The ideal partner has a target audience or customer base that overlaps with yours but is not a direct competitor.

For example: If you sell candles, you probably don’t want to team up with another candle company. But if your target demographic is young people looking for unique, customizable home decor, you might team up with a home essentials brand that sells similarly priced unique, customizable items aimed at a similar demographic.

The ideal partner offers products or services that will appeal to your target audience and fit well with your products/services.

You don’t want to team up with a brand that has an overlapping audience, but offers such a totally different type of product that it just doesn’t make sense to connect the two.

For example: If you sell candles, you probably don’t want to collaborate with a brand that sells large, expensive, buy-it-once home decor items like carpets or furniture.

Certain types of partnerships are naturally between businesses operating on very different scales—such as a smaller D2C brand partnering with a top brick-and-mortar retailer.

But those operations are complementary: they’re functioning in different spaces, so the partnership expands the reach of both businesses.

If both brands are operating in the same spaces—or are “good at the same thing”—there’s less reason to share resources and expand each other’s reach.

Brand identity is more important than ever. Today’s customers, especially younger demographics, increasingly make purchasing decisions based on a company’s underlying values—such as sustainability, community engagement, and support of certain social and political causes.

If your brand is eco-friendly, you’ll want to seek out partners with the same values and mission alignments. Customers want authenticity—and they’ll pay attention to which brands you’re supporting.

Complementary audience

No need to call the Costco warehouse and wait for a response.

The ideal partner has a target audience or customer base that overlaps with yours but is not a direct competitor.

For example: If you sell candles, you probably don’t want to team up with another candle company. But if your target demographic is young people looking for unique, customizable home decor, you might team up with a home essentials brand that sells similarly priced unique, customizable items aimed at a similar demographic.

Complementary offerings

The ideal partner offers products or services that will appeal to your target audience and fit well with your products/services.

You don’t want to team up with a brand that has an overlapping audience, but offers such a totally different type of product that it just doesn’t make sense to connect the two.

For example: If you sell candles, you probably don’t want to collaborate with a brand that sells large, expensive, buy-it-once home decor items like carpets or furniture.

Complementary operations

Certain types of partnerships are naturally between businesses operating on very different scales—such as a smaller D2C brand partnering with a top brick-and-mortar retailer.

But those operations are complementary: they’re functioning in different spaces, so the partnership expands the reach of both businesses.

If both brands are operating in the same spaces—or are “good at the same thing”—there’s less reason to share resources and expand each other’s reach.

Complementary alignments

Brand identity is more important than ever. Today’s customers, especially younger demographics, increasingly make purchasing decisions based on a company’s underlying values—such as sustainability, community engagement, and support of certain social and political causes.

If your brand is eco-friendly, you’ll want to seek out partners with the same values and mission alignments. Customers want authenticity—and they’ll pay attention to which brands you’re supporting.

Set Your Goals

Every partnership has different goals. For example, a sales and distribution partnership might have goals or KPIs (Key Performance Indicators) related to number of sales, number of upsells, number of new customers, etc.—whereas a marketing partnership might focus more on social media traffic, follower counts and engagement, and other indicators of increased awareness. Your goals depend on your business and the type of retail partnership—but you should have a clearly defined set of KPIs going into the partnership in order to stay on track.

Iterate on Your Success

Retail partnerships and brand partnerships aren’t something you do once—they should be an ongoing part of your business strategy. Partnerships are a way to survive and thrive in a volatile industry—not only by broadening your customer base, but by strengthening your network and resource access, which can be a lifesaver in times of market fluctuation or disruption. In any retail partnership, be sure to capture and track valuable data analytics, so you can use that knowledge to improve your strategy and partner smarter.

Avoiding Retail Partnership Challenges

We’ve gone over the benefits—now let’s talk challenges. Here are a few possible pain points to consider when designing and implementing your retail partnership strategy.

Lack of Communication

As with any other partnership, communication is key. The point of a retail partnership is to be mutually beneficial. You must be able to trust that your partner is sharing all relevant information, that their goals align with yours, that they’re acting in good faith, and that they will uphold their end of the agreement. If any issues arise, you must be able to communicate with each other honestly, in a timely manner, so you can both deal with the problem as needed. 

Once you tie your brand to another brand or retailer, your customers won’t see a difference between the two businesses—so if your partner is unreliable, unresponsive, or otherwise lacking, it will reflect poorly on your brand as well.

Missing Data

Knowing your customer is an essential part of retail. If you don’t know what your customer wants—what they’re buying and why, what they’re not buying and why; where and how they interact with your brand; their values, desires, needs, etc.—you can’t provide it for them. Retail partnerships are meant to boost your brand—if something is or is not working, you need to know why. Collecting and utilizing consumer data will deepen your understanding of your target audience and allow you to improve your strategy for future partnerships.

Misalignment

A strong partnership requires your goals and values to align. You want to make sure you and your partner are on the same page in terms of what you hope to achieve with a partnership, and what actions you’re both responsible for in order to make that happen. The partnership must be beneficial for both parties—if it’s heavily favored toward one business over the other, then you’re dealing with a shaky foundation from the start.

Retail Partnerships in 2023

The retail landscape is constantly evolving in accordance with consumer trends, market fluctuations, new technologies, etc., but the COVID-19 pandemic made a lot of changes happen very quickly. Though the dust has settled, the landscape is altered. 

And it’s not just the effects of COVID. Ecommerce brought forth a new era of retail: the multichannel era. The past 20 years have seen retailers expand into the ecommerce space, and smaller brands gain unprecedented access to customers via the internet, causing an explosion of D2C (direct-to-consumer) ecommerce brands such as Warby Parker, Glossier, and Casper.  

Selling in multiple channels (online and in-store, brand website and retailer website, brand website and online marketplace, etc.) is now the default. But the more channels you add, the more complicated your supply and distribution network—and the more vulnerable you are to external disruptions in the supply chain, or internal disruptions such as over- or understocking due to a lack of visibility and synchronization across channels. 

The successor to multichannel is omnichannel. The concept behind omnichannel (omnichannel fulfillment, omnichannel distribution, etc.) is taking separate channels and interconnecting them in one digital ecosystem, allowing for cross-channel data sharing. 

This reflects a global and cultural shift toward interconnection. We are becoming more and more connected to each other. Supply chains are farther-reaching and more complex than ever before. The lines between physical and digital are blurring—take, for example, the popularity of omnichannel distribution options such as Buy Online, Pick Up In-Store (BOPIS). 

Today’s consumers expect an omnichannel experience: being able to transition seamlessly between various sales, fulfillment, and distribution channels. The way we shop is evolving. Retail partnerships are evolving with it. 

The trends we’re observing in 2023 are laying the groundwork for the next decade of retail

Here’s a breakdown of three key trends—and how we predict they’ll shape the future of retail partnerships and customer-brand relationships.

The future of retail and brand partnerships—3 key trends

1. Retail ecosystem integration

The rate of ecommerce is growing, but physical stores aren’t going away anytime soon. 

For many online-only companies, partnering with a brick-and-mortar retailer represents a huge opportunity. Not only do you get new customers and increased brand awareness, but brick-and-mortar stores and retailer distribution networks allow for options such as Buy Online, Pick Up In-Store; Buy Online, Return In-Store; Buy Online, Ship From Store, and so on—increasing convenience for customers and decreasing lead times and Last-Mile Delivery costs for merchants. 
We predict retail partnerships will start taking this a step further: not just adding a brand’s inventory to their own, but fully integrating inventory and distribution networks, pooling resources to allow for greater agility long-term.

Example: Connected inventory

Collaboration drives innovation—such as “connected inventory” or “inventory sharing,” where two or more businesses draw from a shared pool of inventory and other fulfillment and distribution resources.

Adidas + Zalando

In 2015, Adidas and European ecommerce platform Zalando launched a partnership model where one of Adidas’s distribution centers was linked to Zalando’s inventory system. As a result, Zalando expanded their offering of Adidas products, and if an Adidas product was unavailable in Zalando’s distribution centers, Adidas’s distribution center could fulfill the order.

Valentino + YOOX NET-A-PORTER (YNAP)

In 2017, Valentino and online fashion retailer YNAP launched the Next Era program: a shared ecommerce platform where customers could access products from both retailers. The program also allowed Valentino and YNAP to tap into each other’s logistics infrastructure, sharing warehouses, fulfillment centers, and brick-and-mortar stores.

2. Customer-centricity—on a whole new level

The customer has always been centric to retail—customers make the world of retail go round. But ecommerce has completely changed the way brands/retailers and consumers interact. With the internet, consumers have access to more information, convenience, and choice. Rather than walking the aisles of one store, customers are walking the digital aisles of a seemingly infinite number of stores. 

“Retailers are now in a landscape where the customer is truly king, and just delivering customer-centricity is no longer enough to confer loyalty or advocacy. Instead, retailers must find ways to integrate themselves into the everyday lives of the consumer by delivering tangible and intangible value. Success is now defined by the ability to build a trusted long-term relationship; the simple act of transactionally selling products will no longer be enough.” —The Future of Retail 2023: How value propositions will evolve to enable relevance and success, Ernst & Young

Example: Community investment

Vans + THIS IS OFF THE WALL

Skatewear brand Vans has a unique relationship to their audience: the streetwear, skating, and surfing communities. Vans doesn’t just sell apparel—through initiatives like Vans Park Series, Vans Triple Crown of Surfing, Vans Pool Party, and House of Vans, the brand engages with and invests in their community online and offline. Many Vans brick-and-mortar stores are multipurpose spaces featuring skate parks, art galleries, concert venues, restaurants, and cinemas, plus skateboarding lessons and other community workshops.

In 2021, Vans launched the THIS IS OFF THE WALL campaign, releasing a series of short films in partnership with skaters and skate organizations (such as The Skate Witches) across the globe and following it up with online workshops on writing and photography, zine publishing, and more. By continually showing up for local communities, and building their brand not around transactions but around long-term relationships, Vans maintains a level of consumer goodwill that is rare even among similarly established brands.

3. Experiential retail

Experiential retail is where brick-and-mortar retail stores provide customers with unique, memorable experiences beyond just browsing and buying products. 

This concept was already gaining popularity with the rise of ecommerce, as customers began to need more incentives to shop in-store rather than online. Then COVID hit—and after 2020-2021, the need to drive foot traffic back to physical stores became more urgent. 

Experiential retail shifts the focus away from the purely transactional and toward a creative, personalized, and immersive customer experience, with features such as in-store events (“retailtainment”), interactive areas and displays, themed experiences, and even just redesigning store layouts and lighting to create a more appealing, enjoyable space for today’s customers.

Example: Interactive pop-ups and destination stores

Nordstrom + Tonal

In 2021, Nordstrom partnered with fitness equipment brand Tonal, expanding Nordstrom’s fitness category while also allowing them access to Tonal’s fulfillment and distribution network. Tonal sells bulky, expensive equipment that requires installation—meaning it’s not the kind of purchase most people make on a whim. So, Tonal opened mini shops in the women’s active department in select Nordstrom stores. Each mini shop is a 50-square-foot pop-up where customers can test out the equipment, experience a full workout demonstration, and talk to Tonal employees.

Dick’s Sporting Goods + House of Sport

Starting in 2023, Dick’s Sporting Goods launched their new House of Sport concept stores: 100,000-square-foot spaces with various interactive and immersive experiences such as: a rock-climbing wall, Golf Galaxy hitting bays, multi-sport cages with simulation technology, an outdoor turf field and running track, and services for breaking in sports equipment and building/repairing bikes. House of Sport locations will also showcase best-selling athletic brands, footwear, gear, and other goods from DSG’s top retail partners.

Conclusion

In this guide, we covered:

  • Key benefits and challenges of retail partnerships
  • Different types and examples of retail partnerships
  • Predictions for the future of retail partnerships

Looking for a retail partner? You’re in luck. 

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A retail accelerator is a partner that provides guidance, support, resources, and access to retailer networks.

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We also leverage our partnership network of 25+ top retailers to help you expand your brand, enter multibillion-dollar channels, and reach millions of customers in stores and online

We’re your personal guide to the retail landscape—from first step to final mile.

Here’s what we do:

  • Directly introduce you to a retail buyer in your category  
  • Fast-track the retail onboarding process, cutting months down to a matter of days
  • Manage all your inventory management and order fulfillment needs

Ready to expand your brand? Connect with us for a free 15-minute consultation to receive:

  • An overview of our retail acceleration, drop ship, and fulfillment services
  • Pricing information and a free quote
  • Referrals to other 3PLs if we’re not the right fit
Julie Massey
Julie Massey

Julie Massey is a dynamic business development leader with a decade of experience and a consistent record of achievement in SaaS, logistics, medical device and pharmaceuticals. Julie spent eight years in healthcare sales gaining broad experience across capital equipment, medical devices, and pharmaceuticals with companies ranging from start-up to Fortune 10. She has worked with such companies as WalkMed Infusion, AmerisourceBergen and Johnson & Johnson.

Julie is a graduate of the University of Alabama, a travel and fitness enthusiast, and currently resides in Fort Lauderdale with her fiancé Ryan and their dog Moose.