In an increasingly crowded consumer landscape, businesses are always looking to innovate to get a leg up on the competition. One way companies do this is through collaborating with other companies. Sometimes a pairing is a natural fit and other times it can be totally unexpected. From “Stranger Things” and Baskin-Robbins to Michael Jordan and Nike, discover the business partnerships that are making companies profitable.
TikTok and Oracle
In early August, President Donald Trump signed an executive order that would effectively ban TikTok in the U.S. unless its Chinese owner, ByteDance, could find an American owner for its stateside operations by Sept. 20. Trump and other U.S. officials claimed that the popular video-sharing app poses a serious threat to national security.
Microsoft, Oracle and Walmart all put in bids to partner with TikTok, and Oracle seems to have been the winning one. On Sept. 13, Oracle announced that it had submitted a proposal to the U.S. Treasury Department to partner with TikTok in the United States. Although the partnership still needs to be approved, if it does go through, it will be one of the oddest corporate matches to happen in a while. Exactly what Oracle would get out of the deal is unclear — especially after Trump announced on Sept. 18 that TikTok will be banned from app stores beginning on Sept. 20 — but perhaps the company is hoping this business partnership will bring it a step closer to competing with the leading cloud services providers, Microsoft and Amazon. TikTok is currently valued at $50 billion, while Oracle is valued at over $200 billion.
Levi’s and TikTok
In more TikTok collaboration news, there is TikTok and Levi’s.
The COVID-19 pandemic has forced lots of companies to pivot to online sales strategies since shelter-in-place orders have reduced in-store shopping. According to Tech Crunch, popular clothing company Levi’s partnered with key influencers on TikTok in April to sell their customizable denim pants and drive traffic to their online e-commerce site through the app’s new “shop now” button.
While revenue figures aren’t in yet, the partnership has the potential to be hugely lucrative for the clothier given the size of the TikTok audience, which is over 800 million today.
Baskin Robbins and “Stranger Things”
In 2019, the popular Netflix show “Stranger Things” aired its third season, featuring a fictional ice cream shop called Scoops Ahoy. Sensing a marketing goldmine, ice cream giant Baskin-Robbins partnered with the show to turn their Burbank, California, store into Scoops Ahoy. The location served “Stranger Things”-themed ice cream flavors such as “Eleven’s Heaven,” “Demogorgon Sundae” and “Upside Down Pralines.”
Not only did the strategy improve revenue at the Burbank store, where sales rose by 150%, but the promotion paid off in five billion media impressions for the company, worth approximately $208 million in media value, according to Hollywood Branded.
If You’re Looking For a Venture: Businesses You Can Start for Under $1,000
YEEZY and Adidas
Rapper and entrepreneur Kanye West, who claimed to be $53 million in debt just a few years ago, has turned his financial fortunes around thanks to a lucrative deal with Adidas for his YEEZY line of shoes and apparel. The New York Times reported that West earns 5% royalties on net sales of his shoes and apparel. With YEEZY sales projected at $1.5 billion in 2019, Kanye likely reaped a $65 million paycheck at the end of last year.
Not only did it earn both Adidas and Kanye lots of money, but The New York Times suggested it improved Adidas’ reputation, as well. “The benefits from the collaboration extend beyond selling $350 high-top shoes and high-end designer apparel. Almost overnight, Mr. West helped to make Adidas cool again.”
Airbnb and Flipboard
What do home rental company Airbnb and news aggregator Flipboard have in common? Savvy use of social media to attract new followers. In 2017, Flipboard encouraged users to curate unique content by tempting them with a chance to win a grand prize Airbnb getaway package.
According to Flipboard’s own case study of the partnership, the magazines on Flipboard generated 4.2 million page flips from 440,000 viewers who liked Airbnb experiences more than 69,000 times. Additionally, more than 29,000 users followed the Airbnb profile on Flipboard. The campaign also drove some 38,000 visits to Airbnb.com. While this is hard to translate into monetary terms, both partners clearly benefited.
Apple and Foxconn
Though they worked together before, it wasn’t until Foxconn Technology Group landed the contract to produce Apple’s iMacs in 2000 that the two companies began a truly constructive relationship. On the one hand, Apple pushed Foxconn to up its manufacturing game. On the other, Foxconn urged Apple forward in memory chip deals with Toshiba and in creating jobs in the U.S. for LCD display manufacturing.
The partnership was so lucrative that by 2018, Foxconn reported their highest revenue to date — $175 billion — and was ranked at No. 24 on the Fortune Global 500 list.
Today, Foxconn has another partner, Medtronic, which it teamed up with to produce much-needed ventilators for COVID-19 patients.
Spotify and Starbucks
Remember when Starbucks used to sell CDs? By 2015, it was apparent that the coffee giant’s relationship with music needed to modernize. Enter Spotify.
That year, 7,000 Starbucks stores teamed up with Spotify to grant exclusive access to streaming music and monetize My Starbucks Rewards stars as Spotify currency. Starbucks’ countless customers gave Spotify a massive boost — during the first year of the continuing partnership, Spotify grew its income by 80%, earning $2.1 billion in 2015. Forbes called the deal “digital co-branding genius.”
Spotify went public in 2018, valued at just under $30 billion, according to Forbes. While its value has shrunk slightly in 2020, the company is still worth billions and has over 299 million subscribers.
Aston Martin and 007
Few brand collaborations are as iconic as Aston Martin and the “James Bond” series of films. The relationship began in the 1964 movie “Goldfinger,” in which then-Bond actor Sean Connery drove an Aston Martin DB5.
By 2015, Daniel Craig was driving an Aston Martin DB10 in “Spectre” — which also featured deals with Jaguar and Range Rover, among others. The preceding film, “Skyfall,” generated $7.6 million in “brand value” for the products it featured, Adweek reported.
For its 25th installment in the Bond franchise, due out in November, Aston Martin rolled out four special models, according to Car and Driver. Two vintage — the Classic DB8 and V8 Vantage — and two new ones — the DBS Superleggera and Aston Martin Valhalla. Regarding the release, Aston Martin tweeted, “There’s something for every Bond fan.”
Red Bull and GoPro
2016 marked the start of a multiyear global partnership between the energy drink makers at Red Bull and the camera innovators at GoPro. The deal made GoPro an exclusive point-of-view camera and content partner at Red Bull’s plethora of media productions and events, and Red Bull got an equity share in the camera company. Fast Company called the ongoing partnership the “action content equivalent of McDonald’s teaming with Coke.”
In 2017, Red Bull’s sales went up 2% globally, selling over 6 billion cans, and GoPro made $247 million by year’s end, capturing 80% of the global action camera market. In 2019, GoPro was valued at $1.195 billion, and this year, Red Bull was valued at $11.1 billion.
National Geographic and Tourism New Zealand
In July 2017, National Geographic and Tourism New Zealand joined actress Bryce Dallas Howard, who served as the project’s creative director, to promote Kiwi tourism via a six-part video series entitled “The Ultimate New Zealand Experience.” As TNZ chief executive Stephen England-Hall put it, “When you have someone of Bryce’s caliber who genuinely loves your country and you pair that with National Geographic Travel, one of the best in authentic destination storytelling, magic happens.”
The partnership led to an additional 1.5 million U.S. travelers visiting New Zealand and an increase of 11% in U.S. visitors spending money when they came to travel.
Alexander Wang and H&M
By the time H&M partnered with famed designer Alexander Wang in 2014, they already had a 10-year lineage of similar collaborations. This 61-item line, though, set some milestones, from its Instagram announcement to its initial sellout, which took just a few hours.
Celebs from Solange Knowles to Jessica Chastain could be seen shopping Wang’s budget-friendly looks at the launch party, which likely helped significantly with the $150 million in yearly revenue his 300-person company was making in 2016. The earnings are even more impressive considering the collab happened right in the middle of a fashion industry slump.
H&M defied expectations again for their June-to-August quarter, said Business Insider. Their profits were up 10 times what analysts had predicted.
Le Specs and Adam Selman
Australian eyewear company Le Specs and womenswear designer Adam Selman might not be the biggest names on this list, but they prove that collaboration can completely turn a company’s fortunes.
Although Business of Fashion described Le Specs’ business in the preceding years as “sleepy,” working with Selman to introduce Kubrick-inspired frames in 2016 boosted overall sales by 10%, grew online sales 150% from the previous year and put Le Specs on track to become a $100 million label.
Apple and Beats
Dr. Dre knew he was ready to start his first solo business back in 1998 when he founded his Aftermath record label. He later sold 30% of his stake in the label to Interscope Records for a reported $35 million. But that was just the beginning for the mogul, including a hate-then-love relationship with Apple in the 2000s.
The 2006 formation of headphone maker Beats Electronic came about when Dre’s partner, audio engineer Jimmy Iovine, was dissatisfied with the sound and quality of Apple’s earbuds. By 2013, Beats by Dre had brought the high-end headphone market to the mainstream, with a projected $1.4 billion in revenue. In 2014, the story of the strange bedfellows came full circle when Apple acquired Beats for $3 billion.
Though the headphones are just one of the pieces of Apple’s sales, Apple reported “cash on hand” of $192.8 billion in its second quarter of 2020.
Vans and Nintendo
In 2016, Nintendo was at a relative low point. After three years of operating losses due to the struggling Wii U console, the Japanese giant needed some new business plans to tide itself over before the launch of the Switch in 2017. Those plans included an increased focus on smartphone games, trendy NFC-compatible figurines and leveraging its famous characters via more licensing deals.
Among those deals, Vans launched a limited run of Nintendo-themed clothes and shoes in 2016, helping along their fourth-quarter revenue to $3.3 billion. Against all odds, Nintendo managed profits of $920 million that year, owing the vast majority to non-video game deals.
Nintendo’s luck has continued to soar. In August, the company reported earnings of over $1.37 billion in operating profit, a 400% increase over profits from the same time in 2019. CNN attributes the increase to the popular video game for Nintendo Switch, “Animal Crossing: New Horizons.”
Vice and Smirnoff
When Vice channel Thump found that, on average, only 17% of headliners at electronic music festivals in 2016 identified as women, they teamed up with Smirnoff to help grow that number via the Top 50 Women Making Noise project, which combines dialogue panels, a free documentary and a workshop event focused on helping young women in music. Talk about doing some good!
Got a Problem? Turn It Into a Business Like These 15 Companies
CoverGirl and LucasFilm
When you think “nerd-centric sci-fi,” you don’t often think of CoverGirl, but that’s what makes this collab so great — it colored outside the lines to elevate both brands.
First announced to coincide with the release of “The Force Awakens” in 2015, the pairing brought about makeup like “Light Side” mascara. All told, CoverGirl and Star Wars’ other merchandising deals were projected by Variety and Macquarie Securities’ Tim Nollen to bring in $5 billion within 12 months’ time. Although it was promoted as limited edition, Star Wars-branded CoverGirl products are still readily available as of 2020.
Michael Jordan and Nike
Sports sponsorships could easily make a list of their own, but Michael Jordan and Nike’s iconic collaboration is a big part of the reason why consumers think of star athletes themselves as brands.
When the Jordan-branded Nike Air Jordans were first released in 1985, they were projected to sell between 3 and 4 million pairs, generating $55 million in early orders and retail sales alone. Fast forward to 2016, and Jordan revenues were at $2.8 billion. As of 2020, Jordan has earned over $1.3 billion in payments from Nike, according to Forbes.
James Harden and Adidas
Nike and its Air Jordans can’t be undervalued in terms of historic collaborations — they enjoyed a decades-long reign as the second-bestselling sports footwear on the U.S. market. Until 2017, that is.
In September of that year, Adidas’ James Harden-branded kicks finally overtook Jordans in sales, prompting NPD sports industry analyst Matt Powell to tweet, “This is an achievement I never thought I would see in my lifetime.”
Adidas stock spiked more than 44% in the first eight months after making the Harden deal, according to Seeking Alpha.
Casper and West Elm
In 2016, a mattress delivery company startup named Casper teamed up with West Elm furniture stores, bringing the scrappy online brand into the visibility of brick-and-mortar storefronts.
The trendy company, backed by celebrities like Leonardo DiCaprio and Tobey Maguire, saw its sales double in 2016, reaching heights of $200 million. The deal ended in September 2017, however, when West Elm partnered with competing mattress brand Leesa. However, Casper has held steady as a multimillion-dollar company well into 2020.
Target and UNICEF
Not all collaborations exist just to fill a corporation’s coffers — Target proved that by partnering with the U.S. Fund for UNICEF. Announced in October 2015, Target-exclusive UNICEF Kid Power Bands are a youth-friendly fitness wearable that use a companion app to give kids various active “missions” to complete. The more points they earn from missions, the more food UNICEF delivers to malnourished children globally.
Less than six months after it went on sale, more than 136,000 American kids were using the band, unlocking enough points to deliver over 626,000 food packets. The Kid Power Band is still available from Target for $39.99.
In 2020, Target is partnering with Disney to create a series of pop-up Disney merchandise displays in stores across the country that might just be its next big revenue boost.
More From GOBankingRates
- If You Get a Stimulus Check, How Will You Use It? Take Our Poll
- How Long $1 Million in Savings Will Last in Every State
- 30 Essential Money Habits
- 27 Ugly Truths About Retirement