A Lemon Bar With That Jeans Purchase?

I love this article from Bloomberg BusinessWeek about the rise of the retailer-restaurant. It talks about how shopping stores from Urban Outfitters to JCPenney are adding cocktails, espresso bars, and other foodservice outlets to their storefronts.

Source: Creative Commons

Source: Creative Commons

Having covered the foodservice industry for the past couple years, before coming to NYU, I actually think that from the business’s perspective, this move is great. Malls have food courts, which are often crowded and bustling no matter the time. So why not create a mini-food court of your own, in your store?

As a consumer, this scares me a litte. Mostly because I think it will work. I know how much I love getting a bubble tea or frozen yogurt at the mall to walk around with, and the more stores that include yummy options like these in their stores, the more tempted I will be.

One of the last articles I wrote before I left QSR magazine and moved to New York was about Macy’s opening its first co-location with Pinkberry. I spoke to Pinkberry CEO Ron Graves and Macy’s director of brand operations, Chris Burr. They both concurred that their brands fit well together; the Macy’s shopper is also likely already a Pinkberry consumer, too. Thus, fans of both brands are already familiar with the other company, and if they’re only familiar with one, they’ll have a wide open opportunity to try the other.

This harkens back to the power of co-branding, which I talked about in my very first blog post(!) when I discussed the potency of Taco Bell and the Doritos Locos Taco. Co-branding associates two distinct brands at once, and if it works well, consumers remember not just one but two brand names at the end of the experience. Any fan of Taco Bell also knows the Doritos Locos Taco. A fan of Harry Potter may associate Universal Studios with the enterprise. Universal is owned by NBC, which has little link to Harry Potter otherwise, but its theme park broadens its fan base. And so on.

One downside to this new trend is that consumers allow retailers to dictate which foods we eat and make our dietary assumptions for us. Not wholly, of course; we can always exit the store. But their plan is to keep us in there for as long as possible, and if a store ever opened a taco window in its clothing or shoe department, I’d be hard pressed to say no.

Everyone is Crazy for Doritos Locos Taco

Ah, the power of co-branding.

Not too long ago, when I thought Taco Bell, I thought, “Gordita crunchwrap. Nachos bell grande. Fresco soft taco.” You know, Spanish words that have been Americanized with a Mexican menu item slapped on as a suffix.

No longer. Now, when I think Taco Bell, the immediate word that pops into my head is, “Doritos!” And despite the fact that I once tried the Doritos Loco Taco and found it to be a saltier but otherwise comparable version of the original hard taco, Doritos and Taco Bell are married in my mind. This, I imagine, is exactly what Doritos wanted out of its partnership with Taco Bell, and is therefore an excellent case study of the powers of successful co-branding.

Launched in March, the DLT quickly became the top-selling menu item at Taco Bell by June, hitting 100 million in sales. And last week, the DLT surpassed 200 million in sales.

As David Lazarus at the L.A. Times says,

I don’t know whether this is a tribute to Taco Bell’s marketing skill or a commentary on the culinary tastes of the American people.

We’ll put the checkmark in the former category. Taco Bell has done an admirable job marketing the orange-tinged shell to the point of utmost popularity in six months. And Doritos abundantly benefitted by getting its product in the hands of its core loyalists—men under the age of 35—while simultaneously keeping the company top-of-mind.

Doritos, a brand of Frito-Lay (which in turn is a division of PepsiCo), is no stranger to carefully crafted marketing success: its annual “Crash the Super Bowl” fan contest continually scores highest among Super Bowl viewers. Extending the brand into the hands of the fans is more than a marketing ploy; it puts fans in control of the brand and how it is perceived.

The ultimate winner in this on-going triumph, however, is co-branding. Taco Bell will undoubtedly note record sales when it files its 2012 10-K and Doritos has found a way to engage fans beyond the Super Bowl timeline. What remains to be seen is whether this partnership opens doors between more consumer brands and restaurant brands, and if so, how they can duplicate this accomplishment.