The 2019 LIMA International Licensing Awards are going to be bigger and better than ever with a revamped online submission process, a judging panel made up of licensing executives from around the world and five new award categories, including Best Collaboration and a Newcomer Award. The submission period is now open, so head over to the brand-new LIMA Awards website to learn more about the categories and to start your entry. But hurry, because you only have until February 1, 2019 to throw your hat in the ring!
You can submit your entries here https://bit.ly/2F6THro
Just before the holiday break, at a time when companies normally try to bury bad news, Spin Master announced that had signed a deal with Warner Bros. Consumer Products (WBCP) to be the DC global licensee for boys’ action figures, remote control and robotic figures, games, puzzles and water toys. The three-year deal is effective in Spring 2020.
Rights in most (if not all) of those categories have long been held by Mattel. Spin Master, Mattel and WBCP officials weren’t available for comment. Mattel has had licensing agreements with WBCP across a range of properties since 2002.
The agreement will give Spin Master access to the range of DC characters, including Batman, Superman, Wonder Woman, The Joker, Justice League and The Flash. It’s expected that Mattel will continue to hold rights for girls’ toys with the DC Super Hero Girls license and preschool.
Gerrick Johnson, toy industry analyst for BMO Capital Markets, issued a comment Monday noting that for Mattel, “Initially, this loss will not look good to the press or stock market, but the license is not important to [its] turnaround. We believe the segments lost represent less than $50 million in annual run rate sales, and an impact of under $0.05 per share. The core business is often augmented by movie tie-ins. However, over the past several years, movie tie-ins have not shown growth and have been mostly underperforming expectations….
“While [Mattel] has not commented,” he continues, “we suspect the company sees better growth opportunities and return in investment in its own brands. [Spin Master] did not comment of the cost of the license, but if Warner had demanded high royalty rates and minimum guarantees, it could have made sense for the company to walk away. Mattel can potentially re-bid for the license in three years when the company is on firmer footing, as we expect it to do with Disney Princess when that license is up for renewal.” Also up for renewal in 2020 are Hasbro’s pacts for Marvel and Star Wars.
For Spin Master, the pact is the most recent in a series of licensing deals it has signed this year, including one announced this fall with Feld Entertainment (Monster Jam).
Spin Master President Ben Gadbois said in a press release that the DC license marks a “major milestone” for the company and is part of its strategy to invest in “successful licenses” that “further grow and diversify our business.”
Author : Michael StoneChairman at Beanstalk – Brand Licensing Agency
There are many new paths for delivering a brand message to consumers, engaging and connecting with them, and motivating them to make a purchase. Brand owners are experimenting, and often struggling, to determine the best paths for their particular brand. Brand messaging today is a stew of consumer experiences and reaching consumers where, when and how they shop has created a “shopping battlefield”.
Brand licensing fits perfectly into this new messaging, communications and retail landscape. Licensing provides a vehicle for brand owners to achieve their communication goals and engage with consumers. It should be viewed in the context of all of the varying ways that brand owners can now communicate their brand message and brand promise to consumers. Considering it in this manner reveals how important licensing can be as a tool to engage the consumer: create, redefine or strengthen brand connection; and navigate the consumer’s connected shopping journey.
That’s the overriding premise of The Power of Licensing: Harnessing Brand Equity, by Michael Stone, Chairman/Co-Founder of Beanstalk. Following is the introduction to Chapter 4, “A Strategy, Not a Tactic”. For the full chapter and Table of Contents,click here.
The Power of Licensing: Harnessing Brand Equity is available on Amazon and www.shopaba.org.
A Strategy, Not a Tactic
You would be surprised to learn how many companies fail to think strategically about licensing opportunities. It’s surprising on many levels, not the least of which is that licensing is about allowing a third party to use a company’s most valuable asset—its brand. When licensing is reactive and tactical, it’s implemented in a vacuum—objectives haven’t been determined,product categories haven’t been vetted, and management is not in place to oversee the process, among other shortcomings.
Would an iconic brand launch a new product without well- thought-out goals and a strategy to achieve them? Probably not. Organizations will fail to take advantage of licensing’s marketing power if they treat it as a tactic, as an opportunity to which they can react. Being proactive, strategic, creative, and managerial (i.e., operationally ready) are requirements for any licensing program. To meet these requirements, best practices and processes must be used to develop an executable strategy. Those as well as illustrative examples will be discussed next.
Every company has its variables that need to be addressed in a licensing plan, but certain elements are critical to establishing and then executing any plan,including:
Licensing Goals and Objectives
Description of Brand Equities
Licensing Positioning Statement
Distribution Channel Strategy
Market Dynamics and Trends
Product Categories and Competitive Landscape
Program Management and Support (addressed in the next chapter)
The majority of these elements involve a comprehensive evaluation of the brand—the identification of the brand’s equities and the brand’s marketing and licensing goals. Without a clear understanding of the brand’s equities and what the brand wants to accomplish through licensing, a company is essentially licensing in the dark.Following a comprehensive analysis of equities, goals, and objectives with which licensing must be aligned, the brand needs to evaluate appropriate product categories through a variety of filters—for example, distribution channel strategy and market dynamics—before finalizing the plan and moving forward. And to ensure that licensed products meet the quality expectations of the brand, the company must be operationally ready to handle oversight of product design, development, and production.
Several brands will be used as examples in this chapter— mostly Cracker Barrel Old Country Store and content provider HGTV, although other examples will be sprinkled throughout.
With anime taking hold at mass merchants, characters and stories that once were relegated to specialty and niche distribution is moving into the mainstream.
The shifting fortunes of anime are being driven by the increasing availability of content through streaming services, TV and mobile devices and the sheer volume that is being produced. For example, Ellation’s Crunchyroll streaming service has doubled its number of paid subscribers in a little over a year to two million and releases 250-300 new series annually. That’s in addition to Funimation, which formally parted last week with Crunchyroll on a content-sharing agreement to focus on its own FunimationNow streaming service. The change follows Funimation’s acquisition by Sony Pictures Television last year. Adult Swim also has an evening block of anime.
That kind of expansion hasn’t gone unnoticed. While specialty retailers such as Hot Topic, FYE Entertainment and GameStop have grown to be a key channel for anime, mass merchants are taking tentative steps into the arena. For example, Market sources say Target is expected to feature anime products – collectibles, apparel, mugs and other items – in 1,600 stores during a 2-3 month run beginning in March in its dedicated “license shop” — a scalable display within its entertainment department. (A Target spokesman declined comment.)
For its part, Walmart launched a dedicated collectibles section with Loot Crate, Culture Fly and Funko at 3,500 stores in October and is expected to add anime-related items in early 2019.
“Anime has always been in the niche space, but it is quickly becoming more mainstream and relevant and if you are Target or Walmart, you start to notice that,” says Viz Media’s Brad Woods, whose firm is best known for its “Naruto”, “My Hero Academia” and “Sailor Moon” properties.
As they’re working to extend retail exposure, owners and licensors of anime IP also are trying to broaden the base of licensees. That’s not without challenges.
Many anime productions in Japan are funded by 3-4 different companies, all of whom have approval rights for merchandise along with the anime artist, a step that can be jarring for licensees accustomed to working via a more streamlined process with property owners in other parts of the world.
“It takes [properties with multiple ownership] longer sometimes to get through the system,” although the process is quicker for well-known properties like Naruto with an established track record, says Woods. “It can be a frustration for licensees; what we do with new groups is manage expectations and plan accordingly. If you come out and say ‘let’s do a shirt and hit the (retail) planogram in six weeks,’ you aren’t being very realistic. Sometimes it is better to say ‘let’s plan for next season’ to allow for enough time to make the process a little easier.”
Anime’s crossover to the mainstream has been evident this fall. Legendary Pictures announced plans for a live-action adaptation of “My Hero Academia.” That’s in addition to it currently being in production on the live-action film, Detective Pikachu.
Separately, Fathom Events worked with Crunchyroll to bring its 12-episode “Yuri on Ice” series to 95 movie theaters on Oct. 13 for marathon screenings. And the Goku character from Dragon Ball Super: Broly, will be one of 15 big character floats (56 feet long) in the Macy’s Thanksgiving Day parade later this month.
“Geek chic is popular now and people wear it with pride and it is totally acceptable,” says Rooster Teeth’s Geoff Yetter, whose firm developed the popular RWBY series that is among the few anime series produced in the U.S. “We had these fandoms, but they were kept behind closed doors. But now these people are adults with money to spend and there is a sense of nostalgia” for properties such as Dragon Ball and Naruto, which were released more than 20 years ago.
Given that increasingly monied-fan base, the once in inexpensive t-shirts and collectibles are being joined by premium products. For example, RWBY licensee McFarlane Toys developed a 12-inch resin RWBY Alpha Beowolf Battle statue the sells for $550. And the Benny Gold streetwear brand and boutique is working on a co-branded Crunchyroll collection that due in 2019.
“The execution and target price points have matured,” says Woods. “Before you might have a $10 t-shirt, now you have a $50 version that has a collaborative artist interpretation of one of the characters. It becomes trendier and higher quality and that does a lot to raise a brand’s image.”
While Dragon Ball, Naruto and My Hero Academia are among the top-selling licensed brands, finding the up and coming properties such as Re: Zero, Black Clover, Yuri on Ice, Goblin Slayer and others are of equal importance if anime is going to continue to raise its profile. To that end, Bioworld Merchandising launched Anime Pls as a platform for testing sales of new properties and using that data to sell retailers on carrying the product, says Bioworld’s Beth Taylor. It also uses the site to put a twist on proven properties with designs that appeal to hardcore fans but might be lost on mass consumers. For example, it is featuring a design with a “Great Ape Goku” design that has appeared only a few times in the Dragon Ball series. Ellation also formed a studio division earlier to release original content on Crunchyroll in 2019, starting with “High Guardian Spice,” which will have a licensing program attached to it, says Crunchyroll’s Michael Melby.
“The goal is to find the next big title and bring it to brick and mortar,” says Taylor. “Even within the more popular titles there will be more ‘insider’ art, which allows us to keep that pop culture fan happy and we can communicate to brick and mortar the results we are having.”
While the designs have traditionally found a home in apparel and accessories and collectibles, anime in finding its way into licensed food and beverages as well as home décor and bedding. Viz Media licensee CTC Food International in the U.S. has launched Naruto-branded ramen noodle soup and soda featuring designs from the series that first ran in the early 2000s. The food is part of an effort to appeal to a younger audience than the typical teenager to young adult consumer attracted to the property, says Wood. In the case of Crunchyroll, it is targeting ramen noodles, ice cream and baked goods for 2019 and licensee Just Funky recently launched bedding sets using Black Clover, Yuri on Ice and Bananya, says Melby.
“It is about bringing a meaningful experience to the fans through content and merchandise. If you don’t have that and it’s just a money-grab, anime fans know that and won’t buy the product,” says Yetter.
The LIMA ASIAN Licensing Awards are widely recognized as the highest level of achievement in the industry and is dedicated to identifying the outstanding achievements in the Asian licensing markets. Winners will be announced during the Hong Kong International Licensing Show at the Opening Night Cocktail Reception on January 7, 2019:
This year, we have received nominations from 11 countries for 11 award categories and the number of nominations has increased by 30%. The award judging mechanism is composed of 2 stages. At stage 1, the Awards judging panel gathered in October to shortlist final nominees. The 5 nominations with the highest total scores from each category will enter stage 2 where they will be placed online for a ballot by worldwide licensing industry players. Each voter (by company) will vote for one nomination in each category.
年度企业/时尚生活品牌授权项目 Property – Owner/Agent Coca-Cola – The Coca-Cola Company / CAA-GBG Mickey Mouse – 90th Anniversary – The Walt Disney Company Discovery Expedition – Discovery Communications, LLC / PPW Sports & Entertainment Limited Pantone & Pantone Universe – Pantone LLC / PPW Sports & Entertainment Limited Van Gogh Museum – Van Gogh Museum Enterprises B.V. / Shanghai Ruihe Culture & Art Development Co., Ltd
年度娱乐授权项目（动画） Property – Owner/Agent Boonie Bears: The Big Shrink – Fantawild Animation Inc. PAW Patrol – Viacom Nickelodeon Consumer Products / Guangzhou Art-land Holding Co., Ltd. Mickey Mouse – 90th Anniversary – The Walt Disney Company Ejen Ali – Primeworks Studios and Wau Animation Peppa Pig – Entertainment One
Entertainment Property of the Year – LIVE ACTION
年度娱乐授权项目（非动画） Property – Owner/Agent Avengers: Infinity War – The Walt Disney Company Jurassic World Fallen Kingdom – Universal Pictures Monster Hunt 2 – Edko Films Ltd.
Licensed Promotion of the Year
年度授权推广项目 Promotion Name – Owner/ Promotion Licensee Doraemon Selfie Contest – Fujiko Pro / ITC Limited Super Wings X Yili QQ Star 2018 Summer Joint Promotion Project – ALPHA GROUP CO., LTD / INNER MONGOLIA YILI INDUSTRIAL GROUP CO., LTD. PETS ROCK X Starbucks “Lets Rock” (China and Taiwan) – Polyblank Designs LTD (t / a Takkoda) / Starbucks China Merchants Bank (CMB)”Angry Birds” Debit Cards – Rovio Entertainment Corp. / China Merchants Bank KFC X SUPER WINGS Marketing Event – ALPHA GROUP CO., LTD / KFC
Location-Based or Experiential Initiative of the Year
年度主题性娱乐体验项目 Name – Owner/Venue Partner Miffy meets Kumoya – Mercis BV / Bakemono Pte Ltd Angry Birds Play Center (ABPC) – Rovio Entertainment Corp. / Kidgoland International (Shanghai) Company Limited Changi Loves Kids: Sesame Street has Arrived！- Sesame Workshop / Singapore Changi Airport Frozen Carnival in Taiwan – The Walt Disney Company / Taipei 101 MTR Malls x Garfield G40 – Paws Inc. / MTR Corporation Limited
年度被授权商（服饰） Company – Property PEACEBIRD MEN – COCA-COLA Nautica – The Rap Of China Li Ning – Mickey Mouse – 90th Anniversary FUJIAN QUANZHOU LIXUN CHILDREN’S PRODCUTS CO., LTD. – B.Duck Hyungji Fashion Group Korea (Castelbajac) – Despicable Me Franchise (Minions)
Licensee of the Year – Houseware
年度被授权商（家居用品） Company – Property Menred Group Ltd. – Electrolux Chengdu Fast Horse – KUNGFOOD P&G(Olay) – Alice in Wonderland/Frozen/Mickey Mouse A.S. Watsons Group Limited – Miffy Shanghai M&G Stationery Company – Miffy
Licensee of the Year – Toy
年度被授权商（玩具） Company – Property Kai Shu Story – Super Wings ledafood（Dongguan）Co., Ltd. – Peppa Pig Hot Toys – Disney/Marvel/Star Wars Uni-Fun – B.Duck Mattel Inc. – Jurassic World Fallen Kingdom
As retailers step up the number of private labels they deploy, and apply ever-more-sophisticated positioning and merchandising strategies to them, brand owners and licensees are increasingly challenged to adapt to the changed environment.
Research from NPD Group shows that private label now accounts for a significant portion of sales in some of the biggest categories in the U.S., including technology, accessories and housewares. But the industry being most impacted at the
moment is apparel, where private label now accounts for 30 percent of total sales in the U.S. In Europe, private label is even bigger, with about one in three purchases made on private label brands. For some European countries like Switzerland, nearly half of purchases made are on private label, according to NPD.
In grocery, according to a Nielsen study for the Private Label Manufacturers Association (PLMA), sales of store brands rose 9.3 percent to $122.3 billion in 2017. (Those figures don’t include major private label purveyors such as Aldi, Trader Joe’s and Costco, nor does it include online-only retailers such as Amazon. Nielsen estimates that including such companies would add at least another $35B to the total.)
And while retailers’ proclivity for private brands has tended be cyclical in the past – they’re attracted by the margins, until something doesn’t work and they’re stuck with the markdowns, at which point they head back toward national brands — there’s general agreement that we’re in the midst of a fundamental change.
The Second Wave of Private Label
“Private label has always been around, but the quality and breadth of items available today are a far cry from the Brand X macaroni and cheese in plain white boxes in the value sections of 1970s supermarkets,” says Marshal Cohen, chief industry advisor, NPD, in the report “Private Label Revolution.” “Today, we’ve entered the second wave of private label, where big name retailers are investing more and more in bringing to market their own labels, which customers are growing to love.”
As with many of the other major shifts happening at retail right now, one can look directly to the consumer (and their enthusiastic e-commerce and social media uptake) to find the cause.
Consumers are now accustomed to the benefits of shopping and sharing online – instant price comparison, access to extensive product reviews and the idea that purchases reinforce their own identity (not the identity of a brand or retailer), says NPD. As a result, brand loyalty is trending down, and brands (all of them, not just private label) have to give consumers a reason to choose them, beyond just value or familiarity.
Want to find out about how retailers are using private label n their apparel strategies, and the implications for licensing? Then don’t miss the next LIMA/NPD Executive Breakfast, Nov. 14 in New York City. Two of NPD’s apparel and fashion experts will discuss not only the private label revolution and its impact, but also increasing consumer demand for sustainability in fashion, which is driving purchasing decisions, particularly among Millennials. Register now.
“Retailers went from seeing private labels as opening price point margin builders to viewing them as proper brands that could compete against national brands with a full spectrum of good, better, best products,” says retail consultant Carol Spieckerman. “They now consider these brands owned assets to the point of not only looking at the equity the brands have, but making them available to other retailers.” Indeed, Walgreen’s earlier this month unveiled plans to test sales of Krogers’ Simple Truth organic private label products through select stores.
An example of the tiered strategy retailers are taking with private labels can be found at Target, which earlier this month launched the Smartly brand — more than 70 basic products ranging from all-purpose cleaners to body lotion, paper plates and shower gel all priced between 59 cents and $11.99. Those items are priced about 70 percent below national brands such Procter & Gamble and 50% less than Target’s own Up and Up brand. Meanwhile, Walmart has expanded use of its Mainstays brand for bedding, in some cases in the price range of the Better Homes and Gardens label it licenses via a DTR with Meredith Corp.
To some market watchers, the genesis of this latest surge toward private label business is a case of retailers reacting to the realities of an omnichannel world in which brand owners and their licensees have developed their own direct-to-consumer business. Of course, the brands say they’ve been forced to do that as stores close, existing chains shrink and shelf space contracts. Also, the channel definition that once separated, for example, department stores and mass merchants, has blurred, driving retailers to carve out their own niches in extending private goods from entry-level to mid-priced, and in some cases, premium products.
Co-Branding With Licenses
In some cases, the private labels are co-branding with licenses. For example, Bloomingdale’s has introduced a Happily Grey x Aqua collection featuring 12 styles of women’s apparel priced $68-$249. The capsule collection combines fashion blogger Mary Lawless Lee’s Happily Grey brand with Bloomingdale’s Aqua private label, marking the first time the retailer has partnered with a social media influencer. Bloomingdale’s move comes a year after Nordstrom launched a similar collection with fashion blogger Arielle Charnas’ Something Navy brand, combining it with its Treasure & Bond private label. The collection registered $1 million in sales within the first 24 hours of being available last fall.
It’s not just for apparel. Seltzer Licensing’s Stuart Seltzer, who works with Safeway Albertsons, said he’s helped the company license in brands for co-branding with more than 100 products of that retailer’s private label products.
To navigate the new retail landscape, licensees must be complementary rather than competitive with private label brands, since retailers have built their own product development, brand-building and sourcing operations, say industry officials. To complement private labels, licensed brands must find a niche within a category that isn’t being addressed by retailer’s own label.
Co-Existing Rather Than Competing
“Instead of thinking about it as competing, licensees/licensors need to think about it as co-existing. Because if you look at it that way, then you also are speaking the retailers’ language,” says Spieckerman. “You are positioning your portfolio (of brands) in relation to a retailer’s platform and brands. It is about complementary strategies across multiple categories, rather than trying to knock the other guy out. There is always going to be a role for something that complements private brands.”
Yet finding those complementary strategies has become increasing complex, especially with broad array of brands readily available not only in stores, but online as well. Amazon has increasingly introduced private label brands – P.O.V. (personal care), Lark and Ro (dresses), Peak Velocity (sweat pants, shorts hoodies), Good Threads (men’s shirts, pants), The Fix (women’s bags, clutch, shoes) – but with little promotion and relying instead on consumer data to match products with buying habits. Walmart has been responding by buying online brands – Bonobos (men’s apparel), ModCloth (women’s apparel) and Moose Jaw (outdoor gear) — to create what essentially have become online private brands that can complete with Amazon’s labels.
“Amazon and other ecommerce retailers have been aggressive in building their own brands,” says The Joester Loria Group’s Debra Joester. “This is something that is not going to go away. Smart (bricks and mortar) retailers will figure out what their selling proposition is, what their consumer will accept and how they maintain a balance between branded products and private label items that are legitimate competitive options.”
If licensees and licensors need a measure of the private label business, the grocery business is a good marker. Grocery chains have long used private label for opening price point (OPP) items, but have gradually spread their use to more premium products such as organic food. Premium products accounted for eight percent of private brand grocery sales of $59.1 billion in the year ended July 8, 2018, while OPP accounted for 32 percent, according to Nielsen.
At the beginning of this year, Albertson’s announced that its O Organics line, launched in 2005, now generates $1 Billion in sales annually. The line features more than 1,000 products. In the most recent year, O Organics added about 200 new products and grew sales more than 15%. When it made the announcement, Albertson’s said that it planned to introduce 500 or more new products this year under the O Organics line, from produce, dairy and meats, to deli, snacks and baby items.