Dunkin’ Donuts is diving back into the merchandise pool, this time with help from breakout TikTok star Charli D’Amelio as part of a broader partnership with the social media royal.
D’Amelio, who grew her fan base to 111.7 million followers amid a pandemic that attracted many more users to TikTok’s feeds, had sung Dunkin’s praises as the provider of her go-to daily drink (a cold brew with whole milk and caramel). In September of last year, the brand caught on to the widespread popularity of the influencer and put the drink on its nationwide menu. The Charli x Dunkin’ merchandise line, released earlier this week, is an expansion of that partnership.
Items range in price from $16 for a keychain to $100 for a cold brew tap handle. Other products include scrunchies, tumblers, a onesie, shoelaces, and a phone case.
Dunkin’s latest merch drop shows how brands are finding new ways to capitalize on TikTok’s popularity, beyond influencers mentioning products in their videos. It could be an avenue more marketers take advantage of as they consider how to make TikTok less of an experimental channel and more of a permanent strategy.
This is not the first time a brick-and-mortar brand — or even retail chain — has expanded into merchandise. In December 2019, McDonald’s launched Golden Arches Unlimited, an online shop for McDonald’s apparel and accessories. Coca-Cola’s online store sells products including ornaments and housewares. Taco Bell customers can buy water bottles, pajama sets, and even puzzles.
Dunkin’s partnership speaks to TikTok’s growing credibility among marketers as brands experiment with the best ways to meet consumers there. There’s a lot of opportunity: Vita Coco coconut water claimed a 15% increase in sales one week after Lizzo posted about loving “nature’s cereal” — a mix of berries and coconut water.
“I think it’s a smart move,” said Gabe Feldman, senior business development lead at Viral Nation. “This goes beyond the one-off cute selfie and a clever caption. This is a long-term brand ambassadorship that hasn’t even been done with a celebrity.” Dunkin’ seems to have taken a page from the McDonald’s partnership with Travis Scott, when the fast food chain put the rapper’s favorite childhood order on its menu in September of last year.
“Our shop is about limited capsule collections for a sense of urgency and exclusivity,” said Kemma Kefalas, manager of brand engagement at Dunkin’ Brands, who added that D’Amelio was involved in choosing the products in the drop.
“[Merch lines are] about creating buzz and consumer engagement, it’s typically not about generating significant royalty revenue,” said Emily Randles, president at IMC Licensing. “Usually with food and beverage brands, the goal of branded merchandise is to drive engagement and build top of mind awareness with the core consumer base.”
Merch has always been a part of brands’ images, long before the pandemic, said Meg Beckum, executive creative director at Elmwood, a brand consultancy. Especially for brick-and-mortar stores and packaged brands, merchandise can be another touchpoint for consumers.
“I think the new focus is that brands are trying to get more ‘bang for their buck’ on merchandise, something more than just slapping a logo on a tote bag,” Beckum said. “Smart brands will see items as an extension of the brand story, that have utility and brand relevance.”
Dunkin’ first launched an online store in December 2019 as a way for customers to purchase holiday gifts, after noticing smaller products such as nail polish and lip balm did well in stores.
Dunkin’ declined to share specific revenue numbers made from merchandise sales, but did note that the deal was done through the partnership with D’Amelio, not through brand licensing.
Partnerships like this are not usually paid in a lump sum, but rather through a royalty agreement or revenue share, Feldman said, adding, “In the past, I’ve seen 50/50 splits, or some as high as 70/30.”
While revenue depends on the brand and partnership, Randles says one to two-year deals have lower ROI than longer-term deals. “Food deals can be good because they drive repeat purchases,” she added.
The post Dunkin’ Donuts’ latest merchandise drop builds on TikTok popularity appeared first on Digiday.