(Ed. Note: AFP Jargon Watch is a new, occasional series to help finance professionals better understand the changing knowledge and definitions of the industry. #AFPJargonWatch)
What it is: Noun, short for collaboration. Verb, short for collaborate. Usually implies collaboration across genres.
Why it matters: Done successfully, each partner to the “collab” brings their supporters and exposes/cross-pollinates the other group to their product, music or service. Marketing costs may be lower or shared, but production costs may increase.
- Recently spotted in Rohit Bhargava’s Non-Obvious Insights Newsletter: "The Future of Retail is All About 'Collabs'". In the world of fashion, collaborations between brands are becoming more common, but recently this focus on “collabs” is bringing unexpected brands together as well. For example, Victorinox is using recycled Nespresso coffee capsules in a limited edition Swiss Army Knife. While the brands come from entirely different categories, they likely share some overlap of customers which makes this a very smart strategic trial. In the coming months, we will likely see more teamwork like this where brands find new ways to stand out by partnering with unlikely allies.
- Nearly 40 percent of all hit songs today are collaborations, with hip hop leading the way. Example: All 24 of the hip-hop music producer DJ Khaled’s 24 hit songs are collaborations with other famous artists.