This article was written by Ian Downes, Director at Start Licensing Limited, for The Bugg Report
There is no denying that times are tough in the UK Licensing market at the moment. Stalwart supporters of licensing in the retail sector such as Mothercare have gone into administration. Selling into retail is more difficult as retailers are more circumspect in their buying. Licensed ranges are judged versus own-brand offerings as retailers look to protect their margins. And this is without mentioning the General Election and of course Brexit.
Against this backdrop it is easy to get despondent but there are some bright spots from which to take encouragement. The industry is starting to work in different ways and to find new types of deal. Licensing deals are changing.
There is definitely a growth in deals and partnerships that are hybrids of licensing, PR and promotions. These types of collaborations seem to appeal particularly to retailers as they seek to establish a point of difference and to build a rapport with consumers, particularly with a nod to social media. A good recent example was fashion retailer Joules’ partnership with Aardman and Wallace & Gromit. Aardman created a bespoke advertising spot for Joules centred on Cracking Christmas Jumpers with Wallace & Gromit modelling Joules jumpers. This is a great example of IP adding value and originality giving a retailer in a crowded category a real point of difference. It also builds a platform for future discussions between the two companies.
The Natural History Museum have made a very eye-catching retail partnership with paint company Farrow & Ball which combines product and in store marketing including window displays. Pop up retailing is showing growth with licensors such as Mattel using pop ups as ways of creating momentum and building a case study for future retail activity. They have worked with specialist Event Merchandising to launch a Barbie pop up shop in Liverpool. Similarly Rubik’s Cube used a pop up shop in London’s Covent Garden. The shop featured licensed products and was a great showcase for licensees. Rubik’s used this activation in part to support existing licensing partners and to recruit new ones.
There have also been some good news stories in retail with retailers such as Games Workshop reporting strong results with licensing contributing to success. Games Workshop are a specialist retailer who have a real passion for product coupled with a marketing strategy that mixes online, offline and in store activity.
In the run up to Christmas it is also encouraging to see high street retailers such as Iceland turn to licensing to help push their Christmas message, in their case with a product range and promotion linked to Disney’s Frozen. Christmas sees some big FMCG brands like Kellogg’s, Costa Coffee, Tango and Reese’s dial up their activity through licensing with composite gift ranges. This category also sees activity from the likes of Guinness.
So whilst times are tough there is still cause to be optimistic about licensing. Perhaps we have to grow used to the fact that the shape and form of deals is changing. We are in the Licensing Plus business now.