My sons loved baking brownies when they were kids. And the fun part was when they would have to drizzle the chocolate syrup onto them before putting them out on a plate. This finishing touch still remains to me as an awesome form of enhancing a product’s aesthetic and taste value by co-joining the synergies between two distinct entities. And that’s precisely what the world got when chocolate behemoth Hershey’s got into a co-branding partnership with cake maker Betty Crocker.
There’s something brilliant about co-branding of products. It’s a fun way to marry two classic brands into one delicious experience such as for fans of baking and chocolate alike.
Co-branding as a strategic marketing and advertising partnership can only bring about the success of one brand to its partner brand too. It is an effective way to build business, boost awareness, and break into new markets, and for a partnership to truly work, it has to be a win-win for all players in the game. Both audiences need to find value.
In trying to compete with the Walmarts and the Amazons of the world with equivalent business models, most retailers lose steam half-way. Giant brick-and-mortar and online retailers have too much clout, history, and investment in their distribution networks for most other retailers to even consider competing on an organic scale. Creating strong partnerships and fruitful acquisitions is now becoming more than just good business sense, it’s become a necessity. With the right partners, retailers are learning to improve upon their delivery promises and make customers happy. The right partnership or acquisition can cultivate efficiency, streamline fulfilment and grow a customer base.
Take the example of Kishore Biyani’s retail behemoth Future Group who acquired the highly popular South India based ‘Nilgiris’ stores and their entire dairy network to strengthen its own milk based linkages. Recently Future Retail also acquired HyperCity, a 19-store network of high-end grocery and merchandise retail, from Shoppers Stop Ltd. Incorporated in May 2004, HyperCity has 1.24 million sq ft under operation. As of March 2017, Big Bazaar operated 901 stores in 240 cities, with retail space of 13.8 million sqft.
On the other hand, Amazon is leading the market in eCommerce sales by a staggering $78 billion. One would think that such large organisations would not need the room of other players to take on market share. But retailers, of all sizes, are jumping on this trend. 2017 saw a striking increase in legacy retailer partnerships and acquisitions with more to come in 2018 asserting the fact that partnerships and acquisitions will continue to be a key strategy for gaining market share. So Amazon went around shopping and purchased Whole Foods in a classic deal that stunned the world. They then partnered with Kohl’s to process Amazon returns as well and have also set up a store within a store to sell a small selection of Amazon goods. This is an obvious win for Amazon, but ‘is also an opportunity for Kohl’s to rent out some of its own square footage and grow its own digital fulfilment operations’. Why do I speak about Walmart? Surely, for obvious reasons, there can be no story on retail without including Walmart as one key player. And again in 2017 Walmart went around with the acquisition of Parcel, Hayneedle.com, Shoebuy.com, Moosejaw, Modcloth.com and Bonobos. It also partnered with Google to offer Walmart products for voice shopping through Google Assistant.
Further East, on a global scale, Alibaba formed a strategic partnership with the Bailian Group, a large retail conglomerate in China with nearly 5,000 brick-and-mortar outlets spread across 200 cities. The goal of the partnership is the same as Walmart’s, to integrate in-store shopping, big data, and online sales into seamless shopping experiences for customers.
Very recently, Indian FMCG brand Sri Sri Tatva entered into a strategic partnership with Big Basket to provide healthy produce to the customers which Big Basket services. Hari Menon, founder and CEO Big Basket announced that this strategic tie-up would aim to ‘bring the organic products in the same price range to the normal vegetables’ under this association.
Aiming to expand its footprint in the country’s FMCG sector, Baba Ramdev promoted Patanjali, launched its e-commerce platform and announced its partnership with leading e-tailers and aggregators such as PayTM Mall, Big Basket, Flipkart, Amazon India, Grofers, Shopcluesetc to authorise online sale of its vast range of home grown products.
What comes about clearly here is that partnerships and acquisitions are an important strategy for all retailers. And under new dispensations that come about, possible only because of the strategic business tie-ups, Baba Ramdev has succinctly announced his tag-line for the new platform, calling it ‘From Haridwar to har-dwar’ (Haridwar to every door!).
It’s the classic story once again of having your cake and eating it too!
