The Power of Co-branding

As the retail industry continues to grow and evolve to offer consumers more, it is becoming increasingly difficult for brands to stand apart from the crowd and find great real estate to open a business. So more are now standing together!

From creative initiatives like adding a beer garden to a grocery store or connecting a dog park to a bar, more retailers understand the importance of diversifying to make the most out of each location and give consumers something they did not know they wanted in a convenient bundle. And an emerging trend in the franchising sector that accomplishes this with added financial incentives is through co-branding.

Red Mango and Nestle Toll House Cafe by Chip are doing delicious business together.

Red Mango and Nestle Toll House Cafe by Chip are doing delicious business together.

Co-branding offers two different, yet complementary brands the opportunity to band together and give consumers an unexpected offering in one easy location. This unique partnership is a more affordable option for two brands and beneficial to building owners seeking more stable tenants. Creating a new brand identity and commissioning a new build out can cost a pretty penny. With co-branding, two brands share the cost, increase customer reach and maximize a footprint in quality markets.

Recently Smoothie Factory and Gold’s Gym teamed up for a test, offering an enhanced gym-going experience. Through this co-branded opportunity, Gold’s Gym hopes to not only benefit existing gym members, but also appeal to new members. By increasing and diversifying offerings at gym locations, the brand is getting in front of a new audience who want a complete fitness center destination.

Gold's Gym members can finish their workouts at Smoothie Factory in new test locations.

Gold’s Gym members can finish their workouts at Smoothie Factory in new test locations.

Smoothie Factory also benefits in new ways from this co-branding. By educating Gold’s Gym trainers on the different smoothie combinations, nutritional boosts and juice options, menu items from Smoothie Factory can boost workouts for members. And this puts Smoothie Factory in the hands of a wider variety of activity-driven customers.

Red Mango and Nestle Toll House Café by Chip recently came together in co-branded locations in Texas and New Jersey to offer customers the best of both snacking worlds in one place. The expanded menu items appeal to changing consumer demands while increasing dayparts for business at breakfast, lunch, dinner and inbetween. By creating co-branded locations offering the healthier Red Mango menu items with the indulgent Nestle Toll House Café by Chip options, both brands are able to reach a wider audience and appeal to groups of people wanting the best of both worlds.

Meanwhile, the best part of co-branding is the potential to expand both chains into new markets and attract franchise prospects with the lure of two brands in one stop.

So what is the key to successful co-branding?

Co-branding works best when brands complement each other in look, feel and execution. For Red Mango and Nestle Toll House Café, the different menu offerings also help create year-round traffic to increase profits and avoid seasonality of business.

Great co-branding also involves two brands that share a similar core customer base, but each brand might have a stronger segment of the market than the other. For example, Smoothie Factory and Gold’s Gym both appeal to active consumers, but Smoothie Factory gets around 60 percent of its business from women, which is a market Gold’s Gym is actively growing.

It is important to keep in mind that co-branding will not work for every brand. It can be a complicated negotiation especially when both brands are not owned by the same parent company. But the co-branding trend is not going away any time soon. As the need for retailers to be more cost efficient and consumer friendly expands, cobranding will continue to be a fantastic and affordable option for companies.

*Full disclosure and shameless plug: All publicity links in this article resulted from PR programs that BizCom handled for clients on our roster. We don’t just think co-branding is hot. Now the media is saying it too!