Branded Business Builders
Licensed products bring built-in appeal … and markups to match.
By Meredith Schwartz -- Gifts and Dec, 5/1/2010 12:00:00 AM
When we think of licensing, many people picture the latest blockbuster kid's flick, with images plastered all over mass market merchandise. But licensing, especially art licensing and nostalgic brands, makes up a substantial portion of specialty gift offerings as well.
With economic times still tight, there's one good reason for stores who don't already carry them to take a second look at licensed goods: cold hard cash. More specifically, margins. Consumers spend 32.9 percent more for licensed products than they do for the same product without a licensed property on it, according to The Licensing Letter's report, “Retail Pricing of Licensed vs. Non-licensed Merchandise.” Almost one quarter of products sell for an extra 50 percent or more. The biggest tickets are for licensed personal care, electronics and domestics — all categories which may interest a gift and home retailer. However, independent retailers should bear in mind that specialty and department stores command less of a premium for licensed merchandise than mass merchants do.
Trending Up
Martin Brochstein, senior vice president of industry relations and information at the International Licensing Industry Merchandisers' Association (LIMA), told Gifts & Decorative Accessories, “In uncertain times, retailers tend to stay more (but not exclusively) with the evergreens than with up-and-comers, and that seems to have been the pattern recently. In general, things are starting to loosen up, so we'd expect a broader range of licenses to be more in evidence at retail in the second half of the year.” LIMA produces the annual Licensing International Expo, which brings major brand and property owners together with manufacturers, marketers and major retailers, from all over the world.
Surtex, the art licensing show that co-locates with the National Stationery Show, showcases many of the licenses prevalent in the gift industry. According to Penny Sikalis, vice president of Surtex's producer GLM, one of the biggest trends in licensing is — more licensing, including some that flies under the radar of consumer, and perhaps even retailer, perception. Says Sikalis, “From what I'm seeing and hearing in talking to our artists and licensors, manufacturers are looking for more artwork from artists that license, especially those that have a track record. It doesn't necessarily mean their name is attached to the product on the shelf, but it gives the manufacturer a certain level of confidence that there's less risk.”
Among the product categories she sees taking an interest in licensing are giftable textiles such as decorative or kitchen fabric products. Within the licensed art, she sees a trend toward happier art, with cleaner looks, brighter colors and positive motifs, as well as graphic and whimsical elements.
Sikalis also advises that retailers who find an artist whose look resonates with their customers “take a look at all of the different categories that that particular artist is licensing” even if it's outside the store's usual selection of product offerings. The items can be easily cross-merchandised to make more of a statement that may even help to draw new customers into the store.
Big Names and Rising Stars
While not all licensed artists' products are marketed using the artist's name, those that are, such as Mary Engelbreit, can develop a loyal following as their name becomes shorthand in the consumer's mind for a particular lifestyle or design sensibility. For example, April Cornell's name is synonymous with sweet florals and patterns that create a sophisticated mix-and-match country style; Lolita's art and whimsy makes cocktails fun for girlfriend get-togethers; Jonathan Adler has a contemporary blending of design and craft that speaks of a sophisticated, more urban lifestyle; Jim Shore's folk art style is down home and relatable; and Ed Hardy's tattoo art is both edgy and rocker glam.
If you carry a significant selection by a single artist, Sikalis suggests getting in touch with them directly, through their agent or through the vendor. Just as they make appearances for their licensees at trade shows, many artists are willing make personal appearances for signings and events in stores, thus lending a personal touch that helps boost sales and increase their exposure by developing more of a relationship and following with their consumers.
And if you want to perhaps get a glimpse of licensed art future, walk the aisles of the National Stationery Show adjoining Surtex. Some artists begin their careers by launching a greeting card or stationery line before branching out into licensing. If their artistic vision captures the imagination and succeeds through their papergoods, it may translate well to other product categories. Past examples include Curly Girl Designs, Joanna Alberti of PhiloSophie's, Anna Griffin and many more.
Brands and Icons
But licensing in gifts is not just about artist licensing. Classic or nostalgic brands/properties hold a prominent place in gift industry licensing as well. These are brands that are not the “here today, gone tomorrow” hot properties that hit the mass market merchandisers. Whether they are pop culture icons such as Marilyn Monroe or Elvis or classic brands such as Coca-Cola or Harley Davidson, they have lasting appeal, and the properties “speak” to the consumer on a more emotional level. For example, the masculinity of the John Deere brand touches a chord with men, and Mickey Mouse and Walt Disney magically touch the nostalgia of childhood. Cultural and museum brands such as Williamsburg and Biltmore offer a rich background of historical reference and lifestyle appeal.
As LIMA promotes, “It's time to tap into the power of branded merchandise to get a leg up on the competition and unleash your sales potential.” And while the overall goal of those pursuing licensing and licensed product, especially on the mass merchant side of the business, is to discover the “next hot property; the next big thing,” for the gift retailer — or manufacturer, for that matter — it is far more important to keep in mind that a logo or artist's artwork won't sell the product if it is not a good product to begin with and right for your customer. Look first for the art, brands and product lines with lasting appeal and that match your core customer base, and that will resonate with their interests and lifestyle. n
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