Looking back on the last couple of months I can see that I spent quite a bit of my time at trade shows – five in fact. The shows I attended were the London Stationery Show, DISTOY (a show focussed on international toy distribution), The Museums & Heritage Show, Progressive Greetings Live and Exclusively Housewares. The spread of the shows gives an insight into the fact that licensing is a multi-products business and has an impact across a lot of business sectors.
Whilst the general atmosphere at the shows I attended was positive, a note of caution is that a constant theme at the shows was how challenging trading conditions are in the UK at the moment. This observation was particularly marked when companies were talking about launching new products or in the case of rights-holders launching new brands into the market.
Retailers seem to be more cautious in their approach to listings and placing orders – this in turn impacts licensees who are less likely to sign new licensing deals when they are focussed on succeeding with the brands they already have. This is of course a concern and I think as an industry we have to give some thought to how we can sell the ‘virtues of licensing’ to retailers and manufacturers. One observation I would make is that a well established licensing brand can bring ready-made customers for retailers creating store footfall whilst on the product development side a well chosen license can inspire new product development creating new impetus in a category. Given retailers are looking to create ‘retail theatre’ and in-store engagement it is worth noting that licensed brands can play an active role in this.
One trend I noticed at the shows was that a number of licensees are diversifying into new product categories beyond those that they have been traditionally known for. This seems to be driven by two main factors – firstly the fact that retailers want to work with fewer suppliers and secondly, manufacturers have realised they can source and develop broader ranges in a coordinated way which helps retailers achieve their goal of having fewer suppliers.
A good example of this is greeting cards companies adding products like gift wrap, gift bags, stationery and badges to their product offering. Connected to this is the fact that companies like Hype are working with rights holders and retailers to develop new retail ready sales kit to help retailers make the most of their shop space and to ‘buy into’ well established licenses in new ways. In the case of Hype they have created a counter top box to sell button badges coordinated with their core greetings card products. Generally located at till points consumers tend to trade up and buy a badge with a card. For the retailer it is an incremental sale achieved from a sales kit that doesn’t need a lot of room.
At the Museums & Heritage Show it was interesting to see how companies like Spike Leisurewear – a licensee for items like t-shirts – have embraced opportunities from the heritage category. Spike have been a long term supplier of custom designed ranges for heritage shops but in more recent times they have added heritage brands like the National Gallery to their roster which now sit alongside the entertainment licenses that Spike have already. Heritage licensing opens up new retail opportunities – a welcome opportunity in a flat market and also allows licensees like Spike Leisurewear to reach new consumers.
As a general observation I think licensees have realised they need to nurture new retail markets and new routes to market. Attending specialist trade shows is a quick way of doing this and this is probably an aspect of trade shows that is a little undervalued. A well curated trade show can help licensees grow distribution in a focussed way. Progressive Greetings Live was a good example of a well curated trade show that worked hard to get retailers along to the show. This is of course a challenge but trade show organisers seem to be getting better at turning trade shows into industry hubs that feature other content beyond the trade show stand – for example having talks and presentations that bring learning opportunities for visitors.
At Exclusively Housewares it was interesting to see companies like Meyer investing heavily in licensed ranges. But doing so in a considered way and with careful regard to product development. In their case they have a license with Disney for cookware and kitchenware. This has been tied into the Disney 100th Anniversary but goes beyond that. Meyer have developed a range that successful combines the pop culture appeal of Disney with the attributes of a trusted cookware brand. When licenses are used in categories like cookware and kitchen ware it is important that they have a role and purpose.
Consumers and retailers run more of a critical eye over their purchases these days. Being licensed isn’t a sufficient enough reason to purchase. The product has to perform, represent good value and long-lasting in categories like this. One factor here is that consumers will often use online reviews to inform their product choices and this includes licensed lines. We have to be aware that licensed products will be judged critically by consumers and not just giving a free pass because it features a favourite brand.
In the case of Meyer’s Disney range they have used the brand well particularly in regards to the design of the products. I’m sure one benefit of this license to Meyer is opening up new accounts whilst also getting new consumers engaged in the category. Meyer have also had success with TV personality Nadiya Hussain. They have created a range of Nadiya cookware and bakeware across their Prestige brand. This is a range which has had ‘hands on’ involvement from Nadiya in terms of product development and promotion. Again a reminder that the best way of using licensing is to be focussed and proactive.
My time at the trade shows encouraged me that licensing and licensed products still have a very positive role to play but it also reinforced the point that we need to think more about the value of licensing, its role and purpose. It is the time to think more about the design of licensed products, their function and how they compare to non-licensed lines. Consumers are more product savvy these days – we need to be sales savvy about the value and potential of licensing.
This article was written by Ian Downes, Director at Start Licensing Limited, for The Bugg Report.
