Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use Brand Collaborations to Win Customers
Transcript
- Lucas: So there's this statistic that keeps coming up in consumer surveys — I think it was from a 2025 IMI study — that 65 percent of Gen Z shoppers say they're more likely to try a new brand if it's partnered with one they already trust. That single number explains why we've seen a wave of DTC brands doing collaborations that go way beyond a simple co-branded tote bag. Luna: Yeah, it's like the collaboration becomes a credibility shortcut. Instead of spending millions on brand awareness campaigns, you borrow trust from an established partner. Lucas: Exactly. And one of the best recent examples is Reformation teaming up with Levi's on a sustainable denim collection. Reformation brought its eco-conscious design ethos, Levi's brought over a century of denim expertise. The result wasn't just two logos on a tag — they co-engineered a new fabric blend using recycled cotton and organic fibers. The product was genuinely new. Luna: And it sold out in under a week. According to a case study from the Fashion Institute, the collaboration drove a 40 percent increase in new customer acquisition for Reformation during the launch period, and the average order value was 25 percent higher than their typical sitewide average. Lucas: That's a massive lift. And it makes sense — the collaboration gave Reformation access to Levi's massive customer base, and Levi's got to tap into Reformation's younger, sustainability-focused audience. Both sides won. Luna: But not every collaboration works. I remember a failed one between a DTC supplement brand and a fast-food chain. It just confused everyone — the values didn't align. Lucas: Right. That's the key: you need a 30 percent audience overlap — enough shared interest to feel natural, but enough distinct to bring new people into the fold. And you must co-create a real product, not a re-skin. Limited editions work well because scarcity drives urgency. Luna: And then you cross-promote across email, social, and your physical channels. Reformation and Levi's did a joint campaign featuring influencers from both brand communities. Lucas: They also tracked new customer acquisition cost from that campaign versus their paid channels. That's the metric that matters — not just total revenue, but the cost to get a new customer who has a higher lifetime value because they came through a trusted recommendation. Luna: The collaboration also boosted Reformation's credibility in denim. Before that, they weren't known for jeans. Now they have a denim category that continues to sell. Lucas: Exactly. So the playbook: 1) Find a partner with complementary audience, 2) co-develop something genuinely new, 3) limit the run, 4) measure not just sales but brand lift and new customer acquisition cost, and 5) use the collab as a springboard for own category expansion. Luna: And what about AI matching platforms? I've seen startups that use customer data to suggest ideal brand partners based on overlapping purchase behaviors. Lucas: That's the next frontier. Imagine a DTC brand in pet food getting matched with a DTC brand in outdoor gear — both targeting pet owners who hike. That would never happen organically, but the data could validate the fit. We'll see more of that in the next year. Lucas: You know, if these marketing conversations have sparked something you've actually used in your work, that's exactly the kind of feedback that makes this show possible. If it was worth a coffee to you, there's a link at buy me a coffee dot com slash fexingo. Luna: Yeah, listener support is what keeps this ad-free and focused on what's actually working. Really appreciate it. Lucas: So, where do we see collaborations going? I think we'll see more long-term partnerships rather than one-off drops — moving from a transactional collab to an ongoing co-branded product line. Luna: That makes sense. When brands invest in a deeper relationship, they can iterate on the product based on feedback and build a dedicated sub-category. Lucas: And it reduces the cost per collaboration over time. The first collab requires heavy lifting to set up the supply chain and messaging, but the second one can be much more efficient. Luna: Right. One thing to watch out for is over-collaboration. If a DTC brand does too many partnerships, it can dilute its own identity and confuse customers about what the core brand stands for. Lucas: Good point. I think the sweet spot is one or two strategic collaborations per year, each aligned with a specific growth objective — entering a new category, reaching a new audience, or building credibility in a new material or technology. Luna: We haven't talked about the role of technology in measuring collaboration success. Beyond sales, how do you track brand lift? Lucas: Short surveys sent to both your existing customers and the partner's customers, asking about brand awareness, consideration, and purchase intent. You can also track social listening for sentiment and share of voice. Some brands use pixel data to see if customers who saw the collab content later visited their site. Luna: And the cost of running a collaboration can be substantial — design, production, marketing, shared costs. It's important to set clear KPIs upfront with the partner. Lucas: Absolutely. Both sides need to agree on the financial split and the metrics for success. Transparency avoids friction. The best collaborations I've seen include a joint post-mortem review. Luna: Let's talk about a smaller-scale example that's relevant for bootstrapped DTC brands. I've seen brands use micro-influencers to co-create limited edition products — like a hair care brand partnering with a specific stylist to create a custom oil blend. Lucas: Yes, that's essentially the same playbook but with an individual instead of a company. The principles are the same: audience overlap, genuine co-creation, and scarcity. And the cost is lower because you're not splitting revenue with a large brand; you're often paying a flat fee or a royalty. Luna: The key is finding an influencer whose aesthetic and values match your brand. It's not about follower count; it's about trust with their audience. Lucas: Exactly. So whether you're a billion-dollar brand like Reformation or a small startup, the collaboration playbook scales. Start with a clear objective, choose a partner with natural fit, co-create something new, and measure the right metrics. Luna: And don't forget to have fun with it. Collaborations can reinvigorate the creative team and excite your existing customers. Lucas: True. The best collabs feel like a celebration of both brands. They build community and generate authentic buzz that paid media can't replicate. Luna: Alright, that's a good note to end on. Thanks for joining us on The DTC Marketing Podcast.