This article was written by Ian Downes, Director at Start Licensing Limited, for The Bugg Report.
Like the licensing business worldwide, the UK industry has been severely challenged by the economic and social impact of Covid-19. The country has been in Lockdown for many weeks with a gradual easing of restrictions currently underway but we remain a long way from a return to business as usual.
Companies have been severely tested. The apparel category seems to have been particularly impacted with lots of stock stuck in the distribution chain and question marks over future orders. For the bulk of Lockdown retailing has been limited to essential shops only with other non — essential shops being forced to close. So familiar names in licensing retail such as The Entertainer, John Lewis and Lakeland have been shut. Grocers like Tesco , Asda and Sainsbury’s have remained open but their primary focus has been on selling essential goods rather than thinking about licensed ranges. It is difficult to point to high-points in such a challenging period and there is no question the licensing business in the UK is facing a real crisis. After all we are an industry that relies on people shopping and buying things. There have also been closures in areas like theme parks and theatres meaning ‘live licensing’ has been severely curtailed.
There are some glimmers of hope though. There has been a much heavier use of digital marketing by rights holders to support their IP and in turn licensees. Our client Aardman has been working with licensees to create a series of campaigns on Twitter, Instagram and Facebook to push licensed lines in coordinated campaigns with licensees and selected online retailers. Aardman are being rewarded for investing in this area over recent years. They have an expert team in house and have built up a great knowledge of their consumers. One example is that we linked with licensee Primus to promote their Gromit garden statue in tandem with a specialist online retailer who held stock and could despatch goods to consumers. Hopefully rights holders will continue to invest in this sort of marketing. They can track ROI which is useful.
Other online sellers such as Truffleshuffle, Moonpig and of course Amazon have provided a sales channel. Categories like games, puzzles, arts and crafts have done well. This may lead to more opportunities for rights holders in these categories as manufacturers seek out more content.
Personalised product companies such as Super Socks (pictured above) seem to have done well as they have given consumers an easy way of gifting fun products to friends and family. Personalisation is a category that looks set to grow and licensing should have a prominent role to play in it. Trust in online services like personalisation is growing.
There has been a lot of money raised for charities during Lockdown and a lot of attention given to ‘good causes’ most notably the charity associated with the National Health Service. We are all a little bit more aware of ‘good causes’. Some charities have seen income decline as the NHS Charity has been the focus of fundraising in recent months and I think we will see more activity from charities in the licensing sector as they embrace new fundraising methods. I also think companies will look to use licensing more in promotions. Licensing can add value and some brands will be looking to push on promotionally.
Clearly we are facing a tough time but this is the moment for licensing to go back to basics and talk up licensing. Show a united front across the industry.