Get this note delivered each week: The Business of Value
Hi!
So…I took a walk with my lady last night and she said, “I have a branding question I want to ask you.”
She walks me over to the window of Sephora and shows me the sign for Glossier in the window.Â
“What do you think?”
“It doesn’t bother me at all.”
Why do I say that?
I’ll give you a few reasons as a way of offering up some brand strategy lessons.
1. Your foundation of brand management revolves around 3 questions:
- Who are we targeting?
- What is our position?
- What codes are we going to use?
In the case of Sephora, they have some of the clearest positioning and brand codes of any business around.
Sephora is about the discovery of beauty. The red, the black, and the white. The logo.
Glossier has equally well established positioning and codes. It is about beauty and not makeup.
In the article above, certain elements will make it into Sephora like the pink, their mirror, and the wavy tray.
2. This is an example of co-branding:
You have two great beauty brands that stand strongly apart, but can deliver a lot more together.
A traditional co-branding relationship would look like the partnership between Adidas and Kanye West with the Yeezy brand of shoes and slides.
Kanye, at the time, brought a sense of cool, credibility, and freshness to the Adidas brand. While Adidas brought massive mainstream appeal, distribution, and manufacturing expertise.
Together, they were a sensation.
Yeezy slides are still on StockX for $300+ for certain colors on a retail item that sold for $70.
I use this example because it highlights the key point of any co-branding effort: you bring your good stuff with you, I bring my good stuff with me, we mix them together, and the negative stuff stays behind.
Meaning that the benefits are multiplicative.
I bring my audience. You bring yours. Together we have something bigger.
A second point, when it comes time to wind down the relationship, you go your way and I go mine.
That’s happened with Adidas, they’ve cut ties with Kanye West and once they liquidate the last of the merchandise, people will move on from the partnership.
With Sephora and Glossier, they are both bringing their unique assets to the partnership.
Glossier brings a distinctive brand, a specific segment of the market, and a sense of youthfulness.
Sephora brings a distinct brand of their own built on assessibility, distribution, and massive retail network.
For Sephora, they are able to refresh their brand by bringing in newer, hotter brand that was in demand.
For Glossier, they are able to elevate brand awareness higher and overcome the challenges that D2C brands face of struggling to grow beyond a certain point so that they can profit from economies of scale.
3. This example illustrates the power of the 4Ps:
- Product
- Price
- Place
- Promotion
Glossier is able to maintain their price structure while going to a bigger audience. Sephora has another premium brand.
Sephora expands their product portfolio. Glossier is able to get their products where their customers are more likely to find it.
Glossier gains a bigger promotion footprint due to the expanded footprint of Sephora and Sephora’s promotional network.
Sephora can promote Glossier is now in their stores.
As they’ve done by adding the idea of “Finally!” to their promotions.
Through all of this, you see the key drivers of tactics and the 4Ps.
You see other examples of this taking place like Apple setting up Apple displays that mimick some of the features of their stores in Best Buy.
You’ve seen it with Sephora taking their stores into Kohl’s.
These kinds of partnerships can work. They may seem odd at the start, but recognize the strategic thinking underneath and they make a lot more sense.
Key Takeaways:
- Key questions that drive brand strategy.
- The tactical delivery of your strategy.
- Co-branding as a tool to expand your reach.
Tell me what you think?
Dave