When two become one: the risks and opportunities of brand collaborations

Brand collaborations have become a popular method of marketing and brand promotion. These alliances between brands are more than just a trend; they’re a powerful tool for innovation across the retail sector.

When brands work together, they open new doors for their trusted audiences. By carefully choosing partners that align with its core values and aesthetics, a brand can create something unique that appeals to both existing and new customers. This not only boosts market visibility but also strengthens brand identity.

As part of our report into brand collaborations published at the end of last year, we spoke with over 80 companies including eBay, Harrods, Marks & Spencer and Deliveroo, to understand the drivers and risks associated with entering partnerships and how legal teams can mitigate complications.

We found striking the right balance is key – while both parties can benefit from a successful collaboration, there are several important legal and regulatory considerations to keep in mind.

Intellectual property (IP), data protection and contractual commitments when embarking on a partnership

When entering a collaboration, safeguarding IP, ensuring data security, and establishing robust contractual commitments are crucial for a successful partnership. IP, including trademarks, logos, and original designs, are core assets that must be protected from misuse or dilution. A well-drafted contract should clearly outline brand usage terms, ownership of existing and new IP, and include controls to prevent reputational harm.

Marketing collateral, such as new logos and promotional materials, must be managed with similar caution, defining approval rights and usage post-collaboration to minimise unintended consequences.

Quality control clauses are also essential, ensuring that both parties meet agreed standards to avoid disputes. The contract should also establish exit strategies, allowing for termination in cases of reputational or financial risk.

It’s also important to discuss the legacy of the collaboration upfront, determining any future use of the created materials after the partnership ends. Incorporating these elements from the outset helps mitigate risks and paves the way for a smooth, legally sound partnership that enhances brand value whilst protecting key assets.

The regulatory considerations when connecting with your existing and future customer base

When collaborating with another company to reach a broader customer base, it is crucial to adhere to data protection requirements and advertising standards.

GDPR mandates strict processes when handling and sharing customer data, and particular care must be taken to ensure brands have the requisite consents to connect with any new customers beyond the parameters of their collaboration. Any data sharing arrangements between brands should also be clearly documented in order to ensure appropriate protections are in place to minimise any financial and reputational risks in the event of misuse or loss of customer data.

Equally important are the advertising and marketing regulations outlined by the CAP code. All promotional materials must be transparent and not misleading. This includes clearly disclosing the nature of the collaboration to consumers and adhering to rules on influencer marketing and endorsements, where commercial relationships must be made explicit.

Four key takeaways to make your brand collaboration a success

1. Select a partner whose values align with yours; conduct thorough due diligence to assess if the partnership will enhance or dilute your brand’s identity and avoid reputational risks. This should include ethical and sustainability considerations, being open from the outset about the origins of materials, manufacturing processes, and the environmental impact of products.
2. Set mutual objectives and agree on Key Performance Indicators (KPIs) like audience growth or stock movement (if relevant), regularly revisiting these metrics to stay on track.
3. Maintain open, clear, and regular communication by defining check-in points from the beginning and adhering to them, ensuring that both parties remain aligned throughout the collaboration.
4. Engage legal teams early to draft contracts, identify potential risks, and offer strategic advice, ensuring a smooth and legally sound partnership.

If you make the time to facilitate all the above, you can focus the rest of your energy on the most important element of your work, producing a creative and fruitful collaboration that will resonate and inspire.

This article was written by Nathan Peacey, Head of Retail and Consumer at Foot Anstey. 

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