Over the past year, mandatory online commerce brought an influx of revenue to many digital businesses, while also triggering an influx of new players. Everyone had to find a market online; even digital-native brands with strong market footholds had to step it up to stay relevant.
Many major brands simply found their way to new audiences by purchasing other companies. Nestle acquired Freshly, a meal delivery kit, overhauling its portfolio to include healthier options and land new audiences. At the beginning of the pandemic when people had no other access to restaurant cuisine, Uber gobbled up Postmates, and then picked up Drizly to capitalize on the surge in demand for alcohol delivery, too.
For small businesses, weathering the pandemic storm seemed impossible — and it still feels like an incredible challenge. With 90 percent of new ad dollars going to Facebook and Google, digital advertising has quickly fallen out of favor as a tactic certain to deliver new audiences. And because restrictive privacy policies and crumbling cookies aren’t making it any easier, customer acquisition online has become significantly tougher now than it was even 12 months ago.
Consumer distrust of digital ads is reaching a tipping point. So how does a digital brand acquire new audiences in a highly competitive landscape when growing through acquisition simply isn’t in the cards? Partnerships may be the key.
Unlike investing more in search or social channels, partnering with another business, brand, content creator or publisher offers a way to tap into existing consumer relationships and sentiments. In addition, people working from home and monitoring current events are reading, viewing and consuming content more than ever. As a result, content commerce partnerships, in particular, have become an increasingly important avenue for businesses that want to expand exposure and energize customer acquisition.
Another reason to consider strategic partnerships as a path to growth is the ability to efficiently establish cross-channel reach. Online brands can use partnerships to engage consumers who want a physical component to the buying journey, and offline brands can attract younger, digital-native shoppers. Harry’s, for example, established a partnership with Target in 2016, and then Walmart two years later. Numerator Insights data shows that Harry’s sales roughly tripled as a result of the Target deal, as did its household penetration numbers. For Target, meanwhile, Harry’s quickly captured 14 percent of category dollars in its stores.
However, partnering with a major retailer isn’t the only path to expansion — especially when direct-to-consumer (D-to-C) brands partner with each other. Strange bedfellows can make great partners, and open new digital doors. If two brands are in different categories or verticals — the B-to-B version of a Jay-Z and Linkin Park collab — the new audience will include a lot of fresh faces. Online beauty startup Curie has paired up with other D-to-C companies, including online plant purveyor Lively Roots, to reach additional consumers interested in a low-tox lifestyle.
Finding the right partner is crucial to setting up a successful engagement strategy. Therefore, seek partners with goals that align to your own. What audience(s) does your brand want to attract? Are you looking to drive conversions or brand awareness? Does this partner have the same goals and/or objectives, and how can this collaboration help you reach new audiences?
Casper, the original digital-only mattress company, today faces an estimated 175 online competitors, underscoring the low headroom for growth in that channel. An early partnership with West Elm has helped the company maintain its leadership by creating a showroom for its products without investing in its own storefronts. Casper products are also available via West Elm’s catalog and website, providing an in with a wider audience of consumers who may be thinking about bedroom upgrades generally but not specifically a mattress investment.
The other critical component to any great partnership is data. Effective tracking will make it clear where your partnership is performing well and where it can use some restructuring. By automating your processes, you can easily glean insights into your partnership’s performance, award payments based on performance, and drill down on where things can be improved.
The acceleration of online commerce and competition in 2020 changed the retail ecosystem for good. But in that new landscape there are opportunities for innovation, creativity, and any integration that generates new consumer value or convenience. With partnerships, you don’t have to start from scratch. You can build on one another’s strengths, bolster weaknesses, share audiences, and break out of traditional molds to create completely new and authentic shopping experiences that drive new growth and a better customer experience.
Partnerships thrive when built around integrity. When you build trust with your partners, both their audience and yours will be more apt to believe in — and trust — your brands.
David Yovanno is the CEO of Impact, a company transforms the way enterprises manage and optimize all types of partnerships.
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