By Alan Hancock
Last month, I highlighted some examples of visionary partnerships from the world of technology that revolutionised how we live and work; continuing with that focus this month, I want to take a look at how technology and meaningful collaboration is enabling growth through strategic partnerships.
We live in a digitalised, socially centred economy with firms such as Netflix, Spotify, Uber and Deliveroo changing the way people interact with their favourite businesses and use their products and services. By utilising the technology they’ve developed, they’re challenging the established order within their respective fields to bring consumers a wider range of choice, flexibility and value on demand. It’s no surprise then that other, perhaps larger, businesses are looking at the their success and thinking about how best to take advantage of it and it would seem that gradually more businesses are viewing collaboration as equally as important to growth as competition.
Take McDonald’s for example. Last year, answering the hopes and prayers of many fast food fans nationwide, they began offering delivery in partnership with UberEats both here and in the US meaning that you can get a Happy Meal delivered direct to your desk or door for a small fee. McDonald’s delivery is a proven success in other countries and it’s something long desired by British customers of the fast food giant. In fact, whilst in China a few years ago, I saw a crack delivery team sporting the Golden Arches livery tapping at the door of a nearby resident with the promise of the Chinese equivalent of a Big Mac.
My immediate thought being “hold on, if they do it here, why don’t they do it at home?”
Well, McDonald’s resisted offering delivery in the UK for quite some time so it stands to reason that developing and implementing an in-house delivery service would be costly in both time and money; especially with firms like UberEats, Deliveroo and even Just-Eat already providing formidable, experienced competition. In the face of that, it certainly makes more sense to leverage that already well established technology and infrastructure as well as the tried and trusted reputation of one of these businesses whilst also turning a potential rival into a partner. For UberEats, in securing the partnership of the world’s biggest, most famous fast food chain, the benefits are obvious.
In the US, early 2017 saw 200 locations offering an UberEats delivery service, in little under two years that’s expanded to 5,000 with McDonald’s senior vice president Lucy Brady speaking optimistically of the partnership’s future potential: “We’re not just growing the delivery business, the rising tide is actually going to lift both the delivery business and the restaurant business and, that creates a really vibrant brand and energy.”
That success is mirrored in the UK leading the chain to expand their offering of the service to more locations across the country in 2018.
More recently, Sky and Netflix, two natural rivals, announced a similar collaboration with Sky Q customers now able to access the video streaming service either as a part of Sky’s new “ultimate on demand” package or as a standalone app within the Sky Q interface. Chris Whiteley, Director Business Development UK/IE, Netflix said: “Innovation is at the core of Netflix. We are delighted to partner with Sky to offer fans a new and exciting way to access the best of entertainment from around the world.”
For Sky, this broadens their offering to existing customers whereas Netflix now has access to a huge new audience who may not necessarily have seen the sense or affordability in paying for two streaming subscriptions.
It’s a well established trend that larger corporate entities combine with smaller, specialised firms to enhance their offering to consumers and it is in taking advantage of the technology, often developed by those smaller businesses, where partnership is providing that growth today. Whilst this idea may not be groundbreaking, it’s certainly evolving fast and it’s challenging the idea that the “win at all costs” competitive edge, prevalent in business, is the surest way to succeed.
“Partnerships are definitely very important” says Adidas Originals’ global director of digital and retail marketing, Swave Szymczyk. The sports brand recently established a partnership with Parley for the Ocean and now manufactures trainers using recycled plastic drawn from the sea.
“As long as they are not only strategic but also reflect who we are as a brand and what we believe in, it really drives authenticity. You can talk about who you are as a brand all day long but having those partnerships to authenticate that message is really critical for every brand.”
Of course, a modern, effective strategic partnership isn’t simply built on how well technology is used. People are leading busier, more diverse lifestyles and the McDonald’s/UberEats partnership is succeeding because the values of each business are aligned and they share the same vision. It will be interesting to see how the fledgling Sky/Netflix partnership fares given the real similarity of their offering but it’s clear that businesses are seeking a more collaborative relationship with their innovative, forward thinking “rivals” and are seeing a considerable boost to growth as a result.
Food for thought: in those restaurants offering an UberEats delivery service, it now accounts for around 10% of food sales in those locations and, significantly, delivery orders are close to 50% higher than in-store orders. It is perhaps easy to take the most high profile examples as an example of it’s efficacy but I believe we’re seeing the future with strategic partnerships seemingly offering a “win-win-win”; one win each for the players involved and one for us, their customers. As a consumer, that’s something I find pretty exciting.