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Retailers Co-Branding: A Win-Win For Everyone

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Doug Hermann TWG The Weitzman Group

The world's gotten tougher for retailers—they're struggling to stay relevant against e-commerce, and some of the segment's biggest names are fighting for their lives this cycle. But a new strategy to stay successful is picking up steam: co-branding.

“Co-branding allows complementary brands to thrive without competing with one another,” The Weitzman Group associate Doug Hermann tells us. “Tenants are going to have to continue to get more creative in how they brand, and having two tenants in one space takes the burden off one for having to do it alone.”

Dunkin’ Donuts and Baskin-Robbins have been successfully co-branding for years and word at ICSC last week shows the brands have no plans to slow down in Dallas. Gold’s Gym and Smoothie Factory, both based in Dallas, are testing co-branding in Richardson and Cedar Hill. Richardson-based Nestle Toll House Café By Chip and Dallas-based Red Mango recently set up co-shops in Richardson and Fort Worth.

Gold's gym smoothie king

So who benefits? For one thing, building owners get more stable tenants. Rather than leasing to a business whose seasonality causes them to struggle in the offseason (say, an ice cream shop) owners could potentially sign two businesses whose seasonality balances each other out (maybe that ice cream shop and a coffee bar). For another thing, the businesses have an easier time finding real estate, decreasing their carbon footprint and maximizing efficiency. Not to mention, the brands get more foot traffic and consumer awareness from each other. Because if you’re being healthy and drinking a 24 Carrott Kale juice from Red Mango for lunch, then you should reward yourself with a chocolate chip cookie from Nestlé.

Mullin Law founder and managing attorney Cheryl Mullin tell us there can be a lot to work out, especially when brands don’t share a parent company. Brands like Schlotzsky’s and Cinnabon have been co-locating for years, but now more than ever, we’re seeing brands that aren’t owned by the same company sharing space

Red Mango Nestle Co-Branding

“When unrelated businesses co-brand, you’re talking about trademark agreements, shared leases, common products and other practical considerations," Cheryl says. "Plus if you have a franchise, that’s an additional party."

This trend might not be for everyone, but it's certainly here to stay. “It’s harder to find real estate and costs are increasing, so sharing and being efficient has a lot of value,” Cheryl tells us.

Learn more about co-branding and other retail trends at Bisnow's Dallas retail event June 15.