Five things brands need to know about the new era of branded merchandise

Branded merchandise is evolving into a core marketing strategy, helping brands build engagement, loyalty, and cultural relevance beyond traditional advertising.

This shift is here to stay. Given Gen Z’s rejection of traditional advertising, merch fills the gap as a crucial engagement platform and a gateway to the brand’s ecosystem. And for the growing numbers of people who belong to fandoms – a source of joy for 80% of consumers – these objects act as a tangible expression of identity, values and belonging.  

Let’s take a look at some leading industry examples and how they’re mastering this new era of branded merch. 

High-low brand collaboration blends expand reach

A leading example of this trend is Handbags by New York label Susan Alexandra normally retail for hundreds of dollars but her signature bright, beaded aesthetic recently showed up in an unexpected place: a line of limited-edition drinks carrier for McDonald’s, each one matched to a specific drink. It’s a compelling example of how modern merch can collapse traditional luxury hierarchies, cleverly merging premium aesthetics with mass-market accessibility.  

👉 The tmsw take: High-low brand collaborations are an effective merchandise strategy for both partners, expanding audience reach by allowing premium brands to gain relevance and visibility while mass brands borrow cultural cachet and design credibility. 

Lifestyle-led merchandise builds brand engagement

For example, Starbucks has long had an extensive drinkware line but looking to seasonal leisure trends creates new, aspirational avenues for merch – for summer 2026, this entails reframing everyday coffee essentials as nostalgic, adventure-ready accessories. The Starbucks Road Trip Collection includes tumbler emblazoned with travel sticker graphics, motel-style keychains, picnic blankets and canvas weekend bags. Coinciding with the centenary of Route 66, the timing couldn’t be better.  

👉 The tmsw take: Lifestyle-led merchandise is a powerful brand-building strategy because it integrates into everyday routines, embeds the brand into consumers’ identities and experiences, and moves beyond a transactional purchase. 

Unexpected brand collaboration drive cultural relevance  

Partnering with IP or creators is an effective way to gain cultural equity, but the best executions go beyond superficial logo swaps and find synergy in unexpected places. One of the most notable unexpected collaborations is the Eternal Playlist Urn from canned beverage brand Liquid Death and Spotify. Shaped like a funeral urn, this limited-edition resin speaker was paired with a personalized playlist (generated by prompts such as “What’s your eternal vibe?”) to provide the soundtrack to the owner’s afterlife. Fusing Liquid Death’s irreverent heavy metal aesthetic with Spotify’s music fandom, it turns merch into a piece of entertainment in itself.   

👉 The tmsw take: Unexpected, cross-industry brand collaborations drive cultural relevance by combining novelty, emotional resonance, and social shareability into a single merchandise moment

‘Frenemy’ collaborations create viral merchandise moments   

For example, a pair of fast-food rivals in the UK recently leveraged their overlapping target audience to create a novelty menu item. A Greggs’ best-selling Sausage Roll drenched in KFC’s signature Gravy, the co-branded “Gravy Meets Pastry Sharing Bucket” was available in select cities via delivery for a strictly limited time. Such an absurd pairing created instant social media traction and driving scarcity-fuelled demand.  

👉 The tmsw take:  “Frenemy” brand collaborations feel inherently newsworthy because they disrupt category expectations, helping brands unlock new audiences while amplifying cultural cachet through surprise and humour. 

Future-proof your branded merchandise with AI-Powered Personalization

A new wave of connected merch is emerging, turning collectible objects into ever evolving experience hubs. Led by musicians and streetwear brands, early adopters are already distributing designs embedded NFC chips or QR codes, which open exclusive content – such as playlists, virtual events, VIP offers, and fan communities – when tapped or scanned. As AI advances further, this ‘smart swag’ will be able to deliver more individualized recommendations and entertainment based on user behavior.  

👉 The tmsw take: AI-powered and connected merchandise transform merch from a static product into a personalized experience hub, enabling ongoing engagement, data capture, and relationship building. 

In the new era of branded merchandise, the most successful brands treat merch as a strategic engagement platform—blending culture, collaboration, technology, and personalization to build lasting loyalty 

• How should brands use merchandise? Brands should use merchandise as a strategic marketing channel, not just promotional giveaway. The most effective merchandise strategies focus on creating products that reflect the brand’s identity, connect with consumer lifestyles, and deliver ongoing engagement. This includes leveraging limited-edition drops, brand collaborations, and personalization to generate demand and cultural relevance, as well as using “connected” features like QR codes or NFC to extend the experience beyond the product itself. When executed well, branded merchandise strengthens brand loyalty, community-building, and long-term customer relationships 

• What is connected merch? Connected merchandise refers to physical products embedded with digital technology, such as QR codes, NFC chips, or augmented reality features, that unlock additional content or experiences when scanned or tapped. This can include access to exclusive content, events, personalized recommendations, or brand communities. Connected merch transforms traditional products into interactive experience hubs, enabling brands to deliver ongoing engagement, collect first-party data, and create more personalized, dynamic relationships with consumers over time. 

• What is branded merchandise in marketing? Branded merchandise refers to physical or digital products created by a brand to promote engagement, build loyalty, and extend brand identity beyond traditional advertising. 

• Why is merch important for Gen Z marketing? Gen Z prefers experiential and identity-driven engagement over traditional ads, making merchandise a powerful tool for self-expression and brand connection. 

• What are the latest merch marketing trends? Key trends include collaborative drops, lifestyle integration, limited-edition releases, connected products, and AI-driven personalization.