Co-branding is a marketing technique that has been being used increasingly over the past few years. It has been proven to be successful for some of today’s most popular brands, By co-branding, brands are able to combine their strengths and take advantage of one another’s resources and opportunities. A significant advantage of co-branding is increasing both brand’s equities. Brand equity is defined as the commercial value that derives from consumer perception of the brand name of a product or service, rather than from the product or service itself. The purpose of companies coming together to make a final product(s) is to increase profits and expand their market.
Two fashion genres that are predicted to create the most successful joint-venture products are streetwear and luxury. The reason for this is because of their vast popularity, distinct brand personalities and the stark differences between one another. This combination will be a great way for luxury brands to get across to young consumers. In BOF article- “Can Streetwear Collaborations Make Luxury Brands Cooler?”, Mario Ortelli, senior analyst at Bernstein says; “What we’re seeing in the luxury market over the past couple of years is that the consumer finds interest in innovation and unique products. When you’re doing a capsule collection, you’re creating something that’s surprising and gets the consumer’s attention”. Luxury consumers want to see something exciting and new.
This type of joint venture is expected to bring in increased revenue to streetwear brands as well. This collaboration is beneficial for brand credibility and exposure. Fischer says- “Streetwear has been copying stuff from luxury fashion since day one, so if anything, it strengthens a streetwear brand’s identity to actually go on and collaborate with a high fashion brand.” It gives the brand an air of prestige, and shows that they have an “in” and are worth enough to collaborate with well-known luxury brands such as Louis Vuitton.
Two brands that have recently collaborated to create limited edition pieces are Louis Vuitton and Supreme. Louis Vuitton is a luxury brand known for its quality and elegance. The Louis Vuitton customer is a classy, polished and trendy individual. On the other hand, Supreme is a brand known for its streetwear. Supreme embodies downtown culture and authenticity. Their customer is a rebellious young adult living in a trendy urban area. A brand’s ability to obtain current customers and attract new customers is directly related to its equity. By collaborating, these two brands are changing the consumer’s attitudes and perceptions towards the brands.
The combination of luxury and streetwear brands is ideal for reaching vast amounts of millennials as well as Gen-Z. Being that luxury and streetwear are both styles that the up and coming generations express interest in, it is likely to increase profits for both brands involved. Streetwear is the natural way of dressing for millennials and Gen-Z, who make up a huge part of the fashion consumer market. These collaborations will increase brand awareness especially since the target markets consist of different groups of people. One thing both target markets have in common is their desire for something exciting and different, which is why this is a perfect joint-venture.
The retail format chosen to sell the Louis Vuitton X Supreme collection was through pop-up shops. Pop-up shops are for a limited time only at certain places, at certain times. This makes the customer feel privileged when they finally get the chance to purchase from this new collection. Destination retail was used as well. Only pop-up shops located in the most fashion-forward U.S. cities (Los Angeles and Miami) carried the exclusive collection.