Retailer Licensing Programs
June 16, 2008
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WHEN THE ECONOMY IS SPUTTERING, retailers have to go the extra mile to attract and retain customers. Lately it looks like some are getting ready for a 10K run.
Target, for instance, caused a stir last month when it presented its new high-end line of eco-fashions by Rogan Gregory at Barneys stores in Los Angeles and New York. Shoppers (or were they gawkers?) snatched up as many items as they could before the collection was transferred back to Target shelves for a limited run.
Not every retailer can be-or wants to be-that cutting-edge, but they all need stand-out ways to attract shoppers, and licensing is stepping up to meet the need.
"The market environment is more competitive than ever. A licensing program [can] provide retailers with a point of differentiation," said Ramez Toubassy, president of the L.A.-based consultancy Brand Sense Partners. "Retailers are now using licensing as kind of like a private label to amass foot traffic and show customers a little something extra."
One of Toubassy's clients, Ridemakerz, is going a step further: It is using licensing as part of its core business model.
Ridemakerz, an affiliate of the Build-A-Bear chain, is bringing its experiential marketing concept to boys age 6-12 (and their dads) by allowing them to customize a radio-controlled car. Ridemakerz licenses vehicle names and "trade dress" (i.e., the shape of the car) from automakers including Toyota, Ford, Dodge and BMW. It then lets customers "pimp their ride" by choosing their own colors, tires and accessories.
The idea is catching on. "They have nine stores right now, but they have the funding and the business plan to get to 200 pretty quickly," said Toubassy.
That milestone was already passed in 2007 by another retailer, Steve & Barry's. By now, Steve & Barry's successful formula of offering exclusive celebrity-branded merchandise at bargain-basement prices is well known. What gets less attention is the chain's attention to detail in promoting licensed product.
"We treat every one of our 400 licensees the same, regardless of their size," said Howard Schacter, chief partnership officer at Steve & Barry's. "Wherever possible, we make the licensed product part of a fully integrated marketing program using our own [in-store] TV spots, a sweepstakes or some other kind of promotion."
Creative merchandising is also an important part of the mix, with themed areas including a giant T-shirt wall and a summer-blockbuster floor display. "It's a fresh spin on old ideas," Schacter said. "We've established licensing areas of the store, and it helps draw people in because they know what to expect."
Schacter also credits his licensing partners with "thinking smarter and deeper about brands" within the store environment. "It used to be, 'We have this iconic brand-what can you produce for us?'" he said. "Now it's, 'Here are our assets, some video content for you, an idea for a sweepstakes...how can we work together to make product fly off the shelves?'"
Juli Boylan, senior vp of Sony Pictures Consumer Products, agreed. "If you want to deliver marketing across all lines of your business, you have to communicate effectively with your partners," Boylan said. "Relationships are key."
Her relationships with Wal-Mart and Toys 'R' Us provide an excellent case study. Both retailers were able to deliver that "something extra" to consumers last summer in executing concurrent Spider-Man 3 licensing programs (for which both are LIMA award finalists in the Best Retailer category).
Each retailer brought something unique to the table. For example, at the Toys 'R' Us Times Square location, the retailer created a Spider-Man 3 feature shop and ran images from the movie on its giant marquee LED billboard. Wal-Mart integrated the property into its "Season's Hottest Picks" initiative and ran a dedicated Spider-Man 3 ad as part of its national campaign.
For her part, Boylan knew she needed to carve out aspects of exclusivity within each deal. "Everyone wants a sense of ownership over the property," she said. Of course, that meant exclusive product, but it also extended to promotional rights. Toys 'R' Us featured exclusive $5 gift cards off Spider-Man 3 merchandise and had exclusive rights to use the new black-suited Spider-Man imagery in its stores. Wal-Mart, meanwhile, was the only retailer to feature appearances from live Spider-Man characters in its stores.
Increasingly, these kinds of efforts are the cost of entry at retail today. But don't forget the basics, warns Brand Sense president Toubassy: "There's tremendous pressure on stores to get skimpy on product and get price points down," he said. "Consumers are too smart for that. Don't do it!"
For more LIMA coverage:
A note from Charles M. Riotto, LIMA President
2008 LIMA Finalists
Character Brand Licensing
Corporate Brand Licensing
Film, TV and Entertainment Brand Licensing
Sports and Sports-Themed Entertainment Licensing
Licensed Promotions
Art Brand Licensing
Retailer Licensing Programs