Exclusive opportunities for retailers and new creative directions can help to get your property in front of consumers
The licensing industry has grown and evolved dramatically since my early days in licensing at JCPenney, approximately 10 years ago. My first assignment for the children’s division was to coordinate an in-store promotional and merchandising program with Steven Spielberg’s The Land Before Time-a first for JCPenney, and one of the first major retail-licensing ‘partnerships.’
Within a week of my moving to New York and into the JCPenney corporate environment, I was off to Hollywood to meet with Universal Studios and Amblin Entertainment. At the time, this was quite an exciting task for a retailer! Prior to this endeavor, there had been limited involvement between retailers and movie studios-and nothing to the degree we were planning, including boutiques in the children’s departments of all 1,500 JCPenney stores. We were dazzled by the Spielberg name, impressed with the Hollywood glitz and amazed that a movie studio even knew we existed. The fact that Spielberg personally pitched the tie-in to our vice chairman was practically all we needed to move forward with a major merchandise commitment, in-store boutiques and significant promotional support. Those were the days!
Ten years ago, a few, shrewd studio marketing executives realized the impact that retailers have on ‘Middle America’-the target audience studios depend heavily upon to make their movies successful. The number of inexpensive impressions that could be created in retail stores on a weekly basis was astounding. In fact, retailers were initially viewed as a marketing tool that the studios could use to help open a movie. The revenue generated from the sale of licensed product was secondary. It was not until the advent of the ‘blockbuster,’ such as Batman, that most studios realized the significant contribution licensing could make to their bottom line. At that point, the retailer also took notice.
With the retailers’ newfound understanding of the important role they could play within the entertainment industry, the relationship between licensor, licensee and retailer experienced a significant transformation. There was a shift in power and influence, from the licensor to the licensee and ultimately into the hands of the retailer.
Retailers were initially somewhat guarded with their new power and the control they had over the fate of licensed properties. Typically, through testing, buyers would let the consumers decide which properties should live and flourish and which ones should be banished from the shelves. As overall retail sales began to decline, however, product assortments were narrowed and many buyers were forced to limit the number of licensed properties that would actually make it to the shelves for the ultimate test-consumer purchase.
In an attempt to influence the retailers’ buying decisions, many licensors began hiring ‘retail experts’ to sell the buyers on the merits of their properties. The experts came from a variety of professional backgrounds. I must credit my former boss, Al Ovadia, then-president of Twentieth Century Fox Licensing & Merchandising, for starting the trend of hiring a retailer to coordinate the studio’s retail efforts. At a time when retailers were skeptical about the integrity and intentions of the studios, retail credentials were extremely beneficial.
So, what does the evolution of the retailer’s role within the licensing industry mean to those of us who spend many of our waking hours trying to sell our properties into retail? I believe it forces us to pursue a greater understanding of the needs of retailers and how we can position and package our properties to satisfy those needs, as well as our own.
Whether launching a licensed property or re-energizing a mature licensing program, retailers will play a key role in the ultimate success or failure. Unfortunately, creating a successful licensing program at retail is not a science. There are no absolutes in this business, merely strategies that attempt to address the needs of retailers and encourage their support. (Of course, it does help if you have a strong property, media exposure, high visibility, good licensees and a lot of luck!)
I strongly encourage licensors to look for exclusive opportunities, such as launch windows for new properties, product categories, unique designs, in-store visual materials and promotional activities, to offer retailers. When negotiating an exclusive launch, for example, typically, the retailer will make a fairly significant merchandise commitment, provide dedicated floor space and often promote the licensed product in its print advertising. In exchange, the licensor-working in cooperation with the licensees-will attempt to minimize the retailer’s risk by eliminating the competition for a period of time and providing marketing and in-store visual support.
A word of caution: exclusive launch windows should be granted carefully! This type of exclusivity generally works best when the property is new and the awareness in the marketplace is limited, or if the license has experienced a leveling off and needs to be repositioned and relaunched. If the retail community as a whole is anxious to support a property, bad feelings can be created among retailers if one is singled out to carry the merchandise. (It is fairly common, however, to launch a property exclusively with one ‘level’ of retailer-upstairs or mid-and then roll out to the others.) Remember, you will ultimately need widespread retail support if you want to maximize the revenue potential and longevity of your license-don’t burn your bridges.
If you decide that granting an exclusive launch window to one retailer is best for your property, make sure the window is long enough to obtain the maximum benefits from the partnership, yet short enough to allow other retailers to capture some of the business as the demand builds. Also, select your retail partner carefully. Make sure you understand the philosophy and priorities of your potential partner. And above all else, be sure you are targeting the same consumer.
I am currently working with Parachute Consumer Products on the relaunch of the highly successful Goosebumps property. Although it continues to be the number one children’s book series of all time and consistently the number one TV show for kids, for a variety of reasons, several years ago, the license experienced a decline at retail. Considering the property maintains a large and loyal following, while continuing to attract new kids who are just entering the target demo, I firmly believe Goosebumps should still have a life at retail.
Since Goosebumps is a mature property, we are pursuing exclusive partnerships with several retailers to help relaunch the licensing program. As an incentive, we are offering partners an exclusive launch window, new product and exciting, never-before-offered promotional support, including appearances by R.L. Stine. With the successful sell-through numbers generated during the launch, we should be able to effectively sell-in the program to other retailers.
If a property is mature and needs to be re-energized or repositioned at retail, there are several options to consider, such as changing the creative direction and enhancing the imagery available for product development. In working with Parachute, we felt this option was extremely appealing for Goosebumps, since Parachute was in the process of launching the ‘new and improved’ Goosebumps Series 2000. The new book series promised more scares and more intensity than the original Goosebumps. The new intensity of the books translated nicely into a more bold, in-your-face creative direction, especially appropriate for apparel and accessories. The new book series, combined with a great-looking line from Giant, Wormser and American Needle, have been opening doors to retailers that were previously closed.
A good example of a creative change dramatically re-energizing a licensing program would be what T-shirt manufacturer Changes did with the Looney Tunes characters about five years ago. The large, colorful graphics were fresh and exciting, giving retailers a reason to support the property once again. Warner Bros. successfully used this creative direction to enhance a wide range of product categories and build this classic property into a licensing bonanza.
For those properties with limited opportunity for imagery enhancement, unique product introductions can also dramatically affect the productivity of the license. Children’s Television Workshop and Tyco Preschool were able to take a sleeping giant like Sesame Street and create the hottest property of the season with the introduction of the Tickle Me Elmo doll. The opportunities for line extensions were numerous within the toy category, and even crossed over into other categories, such as the Tickle Me Elmo apparel.
While there are no absolutes in this business, with a lot of creativity (and a little luck), there are ways to create retail support for your licensing program. Remember, retailers are always looking for ways to build their business and differentiate themselves from the competition. If you can package your property to help them accomplish those goals, there’s a good chance your property will make it to the ultimate testing ground-the consumer!
Nancy Overfield-Delmar is a licensing and retail consultant. Currently, she is working with Parachute Consumer Products. She was previously the special events and publicity manager for the children’s division of JCPenney before becoming senior vice president of licensing at Twentieth Century Fox.