Neiman Marcus and Target 's holiday collaboration hit both stores nationwide on Saturday , and the brand partnership is undoubtedly the most complex, extensive one in either retailer's history. Not only has America's biggest luxury department store linked logos with America's biggest competitor to Walmart, but the duo also convinced 24 high-end designers to participate in the co-branded line of clothes, accessories and home goods.
Curiously, those designers -- including Michelle Obama favorites Prabal Gurung and Jason Wu -- were nowhere to be found in Target and Neiman's elaborate TV commercials, which aired during the Nov. 11 episode of ABC hit nighttime soap "Revenge." Several of the show's actors wear the designer-created clothing in the campaign, which aired on live TV, as well as on ABC.com and Hulu.com, and focused on the products without mentioning the designers' names.
A similar approach went into Starbucks' unusual pairing with Los Angeles-based design team Rodarte. There's minimal Rodarte branding on the line of nylon sleeves, gift cards and mugs that the label, by sisters Laura and Kate Mulleavy, created for the coffee shop's holiday 2012 product push. To promote the line, which starts at $4.95 for a fabric coffee sleeve, Starbucks created custom in-store stands that prominently feature the product and distinguish it from the rest of the holiday offerings.
Why leave marquee names out of such elaborate schemes? Because unlike the collaborations of years ago, today's efforts need to be about more than a name. Mass brands that partner with smaller labels recognize that while buzz is great, the only way to really make money off these partnerships is with excellent product and advertising that will bring in the masses.
What's more, the business model for these deals is evolving. A decade ago, collaborations were buzzy, not-in-it-for-the-money projects that gave mass brands a hip boost and designers broader exposure. Today, they're a de rigueur aspect of doing business as a mass merchant -- and often expected to recoup the investment of hiring the designer. Pre-recession, a designer would earn as little as $20,000 to participate in a mass collaboration. Today, the payouts start at $100,000, and many reach $1 million or $2 million. "Every deal is different -- they depend on where the designers are in their careers, other obligations -- but almost every one of these deals is now between six and seven figures," said Marc Beckman, founder of New York-based Designers Management Agency, who brokers many of these deals. (In the past, he's worked with Proenza Schouler, Christian Siriano and Derek Lam, among others. More specifically, he brokered Mr. Siriano's long-running deal designing shoes for Payless.)
For the Rodarte sisters, collaboration can help keep the company afloat, which explains their willingness to team up with Starbucks. "If you read between the lines, it's simply another example of very talented women who don't earn enough," said Mr. Beckman. "They're trying to find new streams of revenue." For Starbucks, it's a subtle way to draw in an affluent consumer.