NEW YORK: Affluent consumers welcome brand partnerships and have some specific collaborations in mind, while being aware of the potential risks involved if such alliances are not done well, new research has found.
The Luxury Institute surveyed consumers with a household income of at least $150,000 about the appeal and impact of brand partnerships and found that half agreed that the biggest risk for a luxury firm partnering with another brand, whether luxury or mainstream, was damage to the brand's image or reputation.
A similar proportion, however, thought such links could be successful. "Nearly half of wealthy consumers think that long-term collaborations are most effective for luxury brands," Meera Raja, director at the Luxury Institute, told Luxury Daily.
"Luxury brands should utilize partnerships not just to showcase their strengths, but also to create unique and innovative experience for consumers," she added.
Respondents considered the most effective types of brand collaborations to be joint advertising, products, events and sponsorships.
And the industries where these partnerships were regarded as rewarding were hotels, travel brands, fashion labels and airlines.
Older shoppers, those over 50, were especially interested in travel-related collaborations involving airlines and cruises.
The gender divide was predictable, with men enthusiastic about partnerships that embraced automobiles, while women preferred those around fashion, jewellery and beauty.
More surprisingly, survey respondents evinced a desire to see luxury brands partnering with a non-luxury outfit. Examples proffered included Missoni selling its fashions at Target, Starwood Hotels and Resorts linking up with Bed Bath & Beyond and Gucci partnering with Coca Cola.
But luxury brands are more likely to look to tie up with other luxury brands with a similar status to avoid diminishing their prestige.
A typical instance was Johnnie Walker, the spirits brand, linking up with Alfred Dunhill to create a limited-edition gift set aimed at affluent men and which had the potential to extend the reach of both brands.
Affluent consumers had their own ideas of luxury brands that would go well together, including Michael Kors and Apple, Chanel and Air France, or Lexus and The Ritz-Carlton.
"There are still many benefits of partnerships, but luxury brands must really focus on relevant opportunities with companies that share the same values," said Raja.
Data sourced from Luxury Daily; additional content by Warc staff