When I cast my mind back to my school days (which was some time ago), I remember we used to get Half Year Reports reviewing our progress and outlining how we might be able to “correct our course” during the rest of the year. I remember it was a report that often got my Dad hot under the collar!
With this memory in mind, I thought that I would produce a Half Year Report for Licensing in the UK. With an emphasis on the trends I’ve noticed in the first six months in the UK market, I’ve confined myself to five observations and rather than provide any remedial advice on how to “improve things.”
The Age of the Fan
It’s definitely the age of the fan and fandom in licensing these days. Fan culture is a hot topic of discussion, and it’s a market sector that is increasingly well catered for. There are probably multiple reasons for this, including the ongoing success of events like Comic Con, the ongoing rise of social media, the production slate of major studios, and also changes in retail.
Retailers like Forbidden Planet and Menkind have long served the fan market very well, creating retail environments that celebrate fandom effectively. More recently, a resurgent HMV has delved deep into the fan market and given a lot of space to emerging franchises. E-commerce and direct-to-consumer selling have also accelerated things, with products more readily available to fans.
Companies like Truffleshuffle understand the fan market well and have developed a marketplace that blends products bought in from licensees with a regular program of “exclusives” that they develop themselves. In this latter category, they develop products that show a real understanding of what fans like about a brand, utilizing unique pieces of art or presenting part of a brand’s story arc that has previously been overlooked.
Their work with Wallace & Gromit is a great example of this; they’ve recently launched a number of “exclusives” that feature original designs that resonate well with fans. As “fan culture” grows, it’s essential that the licensing community treats the fan community with respect and continues to provide authentic products that fans genuinely want. In short, we shouldn’t take fans for granted.
Thought-Through Products
Another trend I’ve noticed is a greater commitment from rights owners and licensing agents to create licensed products that are well thought through and ‘on brand’. Even though we are in challenging economic times, I sense there’s been a real commitment to ensuring that licensed products still have added value baked into them. It would be easy to revert to a “label slapping” approach to NPD (New Product Development).
Mojo Nation recently held their Play Creators Conference, which brings together toy companies and the inventor community. This year, there was a new session that allowed IP owners to pitch their brands to the inventors. Brands like Talking Tom, Great Ormond Street Hospital, and Pop Paper City featured. This is a great example of rights owners recognizing there’s a real benefit in getting closer to the creative process and firing up conversations with inventors. Toy companies like Wow Stuff have demonstrated that good ideas, new technology, and IP can be a powerful combination when fused together to create original licensed products.
Licensing in Food and Drink
It has also been interesting to see the heightened level of licensing activity and partnerships in the food and drink sector. FMCG companies and retailers seem to be more comfortable these days using licensing to create products. Often, these products are presented as limited or special editions. In this context, they give retailers a compelling reason to list a new product, and for the FMCG brand, it helps them stand out in an ever-cluttered marketplace. It also takes the focus away from pricing and shifts it more towards innovation.
A great example of this move is spice company Schwartz’s range of spice packs created with a number of casual dining restaurants, including The Real Greek and Bella Italia. This approach to NPD has given Schwartz a well-defined offer that consumers can grasp very quickly in-store. The range is also bolstered by a promotional play with discounts on dining in at the participating restaurants. This is a really good example of value-added licensing and how the grocery sector is leveraging licensing effectively. There’s also a growing trend for FMCG brands to license their brands out to third parties – two great examples are Bailey’s and Marmite. Both brands have distinct identities and flavor profiles and are using licensing to extend their reach and strengthen their retail foothold. Their licensing presence seems to be growing.
Maturing Market & Aging Up Consumers
It also seems that licensing, or rather the target market for licensed products, is maturing and aging up. When I first started in licensing some 35 years ago, the industry seemed to focus solely on the children’s market. These days, there are licensing opportunities and campaigns targeting a range of age groups. My sense is that there’s a whole generation of consumers who have grown up with licensing and like buying into brands.
A good example of this in practice is the licensed apparel company Character Wear. They’ve made a virtue of creating licensed ranges featuring ‘retro’ or ‘nostalgia’ driven brands like the publishing brand Haynes Manuals. These sorts of licensed ranges work well these days with the growth of specialist distribution, including e-commerce. It’s also getting easier and more efficient to target specific interest groups through digital marketing. There’s also growth in direct selling at events and attractions. For example, Haynes Manuals, which is a motoring and aviation brand, works well in settings like specialist Museum shops.
New Entrants, New Energy
A final observation in my six-month report, and one that I’m particularly encouraged by, is the success of some ‘new to licensing’ companies. Many of these companies are characterized by their entrepreneurial spirit and their willingness to embrace the potential that licensing offers companies to accelerate their growth or widen their consumer appeal.
Often, these companies are operating in competitive market sectors where licensing gives them an edge. These new companies are helping give the industry some new energy and fresh thinking, and they are also helping to open up new routes to market for licensing.
Socktopus is a really good example of this new breed of licensee. They’re a company that specializes in manufacturing and selling socks. They operate a chain of their own shops and also offer wholesale opportunities to other retailers. Their product portfolio mixes their own designs with a carefully curated selection of licensed brands. Licensing gives them an opportunity to bring in new consumers and tell new stories in retail – their licensed ranges encourage consumers to shop again but also open up new purchasing occasions like gifting. Skinny Dip and Oddballs are two other good examples of companies in the apparel sector who operate a mixed economy retail-wise and have recognized that licensing can enhance their offer. These kinds of companies are a reminder that consumers are shopping in different ways these days, and it’s important that licensing is represented in as many ‘shop fronts’ as it can be, even virtual ones.
I think if I were to conclude my six-month report with a message to Licensing PLC, I would say: “You are maturing nicely, showing lots of promise, but don’t rest on your laurels and be prepared to embrace new ideas with enthusiasm.” I tended to ignore all the advice and wise counsel I got at school – it will be interesting to see if Licensing PLC pays any attention to my closing remarks.
This article was written by Ian Downes, Director at Start Licensing Limited, for The Bugg Report.
This article originally appeared in Edition 17 of The Toy Universe Magazine
