It’s hard to believe. In the
past, solid brand management carried licensed brands for kids, sports and
entertainment to fame and fortune. Unfortunately, given the complexities of
today’s customer base and tectonic retail changes this is no longer enough.
A proliferation of licensed
properties on countless consumer products in mostly the same categories has
diluted the magic that fewer brands used to hold. Licensed brands often peak
fast and decline quickly, promising a shorter life cycle. Add to this, fewer
more powerful retailers focused on their own store brands are placing increased
pressure on licensors. When the success of a new licensed property hinges on
Wal-Mart among a handful of retailers who call the shots, licensed deals become
less lucrative for licensors and licensees. It also reduces once-sizzling
creative for licensed properties to the banal and predictable when translated
into consumer products. That hardly creates excitement.
Recent deals between
licensors and retailers signal change and a portent of the future. For example,
Wal-Mart and Dreamworks made a licensing deal on the latter’s “How to Train
Your Dragon” movie. Wal-Mart agreed to design and launch the marketing campaign
and committed substantial shelf space for Dragon toys in its stores, in return
for an exclusive on them in the U.S. Wal-Mart then made a favorable deal for
itself with Spin Master to manufacture the toys, and in return, allowed the
supplier full access to international markets sans restrictions.
Toys R Us accomplished its
own coup with Disney’s hugely successful “Cars” property. The franchise,
including toys, video games and other consumer products, is valued at a
staggering $2 billion in annual sales. While many of the toy companies will no
doubt continue to be “Cars” licensees: Mattel, Lego and Hasbro among them, Toys
R Us has secured the global rights for all wooden “Cars” toys. Not only that:
they will manufacture the toys themselves! Toys R Us will also execute all
marketing and promotions. The retailer will have the exclusive on these toys in
the U.S. and around the world. The deal anticipates the predicted success of
the “Cars 2” movie.
Think of the implications!
Regardless, even blockbuster films, long fertile grounds for terrific licensed
properties, are facing unprecedented challenges. That’s obvious since licensed
merchandise linked to most movies is hyped for a shorter period of time before
release. The excitement around them seems to fizzle within a couple of months
after release, thus creating a much smaller window of opportunity to reap
strong sales.
Less-enthused Consumers?
Consumers appear less
interested in licensed merchandise, with notable exceptions. The recent economic
funk may be one reason. Then there’s the sheer volume of licensed merchandise,
much of which looks the same. Young adults are less brand-conscious in general;
that includes licensed products. Children are an exception, of course. Then
there’s an influx of new citizens in the country. What does the heritage of
many favorite licensed pop cult, sports and entertainment brands mean to them?
They have no frame of reference for them so they don’t mean anything.
It also seems that licensors
ink deals with licensees for the same kinds of consumer products in the same
categories. Everything looks like more of the same and there doesn’t seem to be
any “out of the box” thinking about how to leverage the licensed brand in
unique ways. Caps, t-shirts, board and video games: what looks and feels
unique? License properties should offer a real point of differentiation but the
unique brands must be leveraged in a definitive manner or they risk getting
lost in the retail shuffle.
On the face of it these
challenges seem daunting, but pain and peril are really opportunities to push
for unique new solutions. Remember: the current challenges faced by licensors
and licensees are the very ones faced by all consumer product brands. It’s time
to make licensed brands exciting again. Rev up interest among consumers and
they will buy.
A Different Way of Thinking.
Licensors, how about:
- More unusual licensing deals. For example,
publisher Conde Nast is licensing the names of its popular magazines like
“Vanity Fair” abroad for restaurateurs. P&G has considered Tide dry
cleaning stores. Which kinds of new services might work for the licensed
property, differentiating it? Where can new ground be broken?
- Licensing deals in new or unusual consumer
product categories. How many properties might tie in to hot electronics
and game changers that come to market? Super Rad inked a licensing
agreement with Marvel Entertainment to launch products featuring Marvel
super heroes Thor, Spider-Man and Iron Man among others. Their offerings
will include do-it-yourself vinyl figures, and do-it-yourself resin
statues among other products. The company says this move will “add a whole
new dimension to the collectible, toy and arts and crafts aisle."
Smart thinking.
- Which emerging product categories might propel
the licensed property into new territory?
- Does co-branding make sense in some categories? Kellogg’s™ Hannah Montana® cereal pairs a famous
entertainment property rather than a cartoon character with food. How
about Cream of Wheat Cinnabon cereal co-branding food with a famous
retailer?
- Since fewer, larger retailers are calling the
shots on licensing deals, which other distribution channels might be
explored? Do they have to be “retailers” even? How about skate parks for
licensed “action” branded products?
- Can deals be made with a number of retailers at
different levels offering exclusive licensed merchandise in a range of
categories for each?
Besides addressing
distribution, retailer, licensee and product category concerns, there’s one
more over-arching issue. Many licensed product categories don’t have much trade
dress or packaging, so how to develop a creative strategy to distinguish the
property quickly and easily from every other brand in the marketplace, licensed
or not?
There is great value in
developing a “visual hook” that can be used in a diversity of ways for licensed
properties. The visual hook itself must be embedded in the code of the brand
DNA. What’s cool is that it’s adaptable, timeless and transcends ever-changing pop
culture trends on merchandise and on packaging. It allows for design latitude so
it’s confining, yet, it reinforces the unique visual attributes of the licensed
brand. It actually breathes life into the brand and creates demand.
A visual hook completely
differentiates the licensed brand at retail and every other channel. It has the
power to become iconic. Reinforced with a style guide, it sets parameters
without being a stringent, creativity killer. This strategy succeeds in making
it exciting for consumers to actually seek out consumer products bearing the
license. This is what we call “developing an ownable, creative visual
strategy”.
Rethinking all of this makes
licensed properties hot and turns the current pain and peril of licensing into
consumer pleasure and profit.
