On the surface, embedding 750 sq. foot Disney Stores in 25 Target stores starting next month, with another 40 planned a year from now, is a win-win: It’s a great differentiator for Target, gives Disney properties further exposure, and guarantees additional distribution for some licensees’ and Disney Store-exclusive merchandise.
• To what extent will Target’s Disney shops siphon business from mall-based Disney Stores? The Target outlets will have 450 SKUs — 100 of which are exclusive to and available in Disney Stores. Does that mean the other 350 will be available elsewhere anyway? (Stand-alone Disney Stores have long claimed 90% or so of their selections are exclusive, though similar items are often available elsewhere.)
• Will Target customers in areas where there aren’t embedded Disney Stores feel unloved? Is there room to roll out the concept to Target’s 1800+ stores in North America?
• Is there a saturation point for Mickey/Star Wars/Marvel/Princesses/etc.? Is the consumer complaining that those properties aren’t ubiquitous enough?
• The release says Target will manage these store-in-stores. To what extent will the mass retailer be forced to showcase whatever Disney wants to promote — regardless of how well it does? If a movie is a clunker, can Target yank that merchandise out of its Disney Stores the way it does when such a property is displayed in the regular assortment? (Who needs who here? Technically, the answer is no doubt “Yes.” But the reality is it’s a business of relationships, and will Target want to risk displeasing Disney?)
• What impact will this deal have on Disney licensees’ relationships with other retailers — Walmart in particular? Will Walmart stop selling/reduce the amount of licensed Disney merchandise it stocks in stores where there’s a Target-Disney nearby? Or is Disney so critical at this point that it doesn’t matter (that could well be the case).
Let’s not forget Disney overbuilt its Disney Stores, sold them, then bought back the scaled down version. The Warner Bros. stores went through a similar experience, albeit without the range of properties Disney has amassed: Initial exclusivity at a very limited number of flagship Warner Bros. stores brought great results, so they overbuilt, overexposed the merchandise, and lost the cache. Warner, however, never got back into its own retail operation.
Walt Disney the man was a consummate marketer. He rotated his animated films out of circulation for seven year periods, waiting for a fresh audience before re-releasing them. That continued through the early years of home video, when Disney put its videos “in the vault” and then re-released with fanfare. (Now they remake them and/or add new titles to the “franchises.”) Even individual characters were promoted and would then take a back seat for a number of years. Mickey never disappeared, but he wasn’t always the focus of Disney marketing efforts. Some years it’s Minnie. Or Donald. Or even Goofy!
Today, the theory seems to be everything out there all the time: As many new movies as they can crank out for each “franchise” to bring home the box office and merchandising magic of quarterly growth for The Street.
Is there no rest for the consumer?
NEW YORK, NY; August 13, 2019—How can you differentiate one reusable straw from other reusable straws? Let me count the ways based on eight among many on display at NY Now and the National Stationery Show at the Javits Center here this week.
Materials: Stainless steel, silicone, titanium, paper, glass.
Style: Floral/beach/animal motif, solid color, pattern, laser-etched images.
Type: Fixed, retractable, bendable, 2-piece (so you can separate for easier cleaning).
Utility: Lunch kit, home use, travel.
Accessories (yes, accessories for your reusable straw): Cleaning brush; carrying case; multiple diameters for sodas, shakes, and sip/stir; replacement parts (I haven’t figured that out yet).
Environmental link: At least two of the eight I examined donate a portion of proceeds to environmental and/or animal charities.
Even the sales rep for one of the manufacturers I spoke with sees humor in the notion that straws are a “hot product” this year. “Who would have thought?” she asked.
Seattle, the state of California, Starbucks, Disney theme parks, Royal Caribbean cruise ships, Hyatt, Hilton, Marriott, American Airlines, McDonald’s in the UK, and others are banning single-use plastic straws. And while many are simply forgoing straws altogether — typically with exceptions for those with disabilities who need them — manufacturers are clearly counting on individuals rather than restaurants and other beverage purveyors to pick up the slack.
Exactly how long people will care let alone use their brushes to clean their straws, I don’t know. How diligent are most people about flossing? But I have my guesses. In the meantime, is there an opportunistic play for licensors with children’s properties?
BROOKLYN, NY; April 13, 2018 — A basic Google search of “Trump suits” brings up the results pictured above — including a suit for sale at Walmart, which is a working click through, presumably selling off what was left of the line Macy’s stopped selling after then-candidate Trump’s remarks about Mexican immigrants being criminals and rapists. The Google results also include a (theoretically, or at least it says so) paid Macy’s ad for those suits right up top that takes you to an “oops” non-working page.
Clicking through to trump.com/merchandise/signature-collection/ takes you to a page where the only working link is for eyewear at eyeglasses.com, which is not one of the active licensees in a Washington Post article detailing the status of the Donald Trump licensing program. The Post finds two of 19 companies Trump said were paying royalties in 2015 still doing so.
While the article sometimes compares apples to oranges (estimated retail sales vs. royalties), let’s extrapolate: In 2009, the Post notes, Trump claimed licensees sold $215 million of Trump-branded goods, which (my estimate) would have yielded him roughly $9 million in royalties. By 2015, per the Post, royalties were down to $2.4 million, while Trump’s 2017 financial disclosure reports royalties of $370,000.
These days the Trump Organization sells Trump-branded caps, gifts, and other items that it sources, inventories, and markets (as opposed to using licensees). Full Washington Post report here.
BROOKLYN, NY; February 11, 2018—One of the best inadvertent case studies of a licensing program I can recall ostensibly centers on the imminent Broadway opening of Jimmy Buffett’s musical “Escape to Margaritaville.” But the guts of the piece are about “the Margaritaville® Mesquite BBQ Rub:” how Buffett the millionaire maintains the “authenticity” of his heavily licensed laid back lifestyle brand.
“This is America, and poor-quality licensed products are our birthright,” writes Taffy Brodesser-Akner in the Sunday New York Times.
“But Mr. Buffett won’t give you that. . . . He protects your experience of the lifestyle he sells in a way that someone living that lifestyle should be incapable of. . . .This is no longer a business. This is a cause.”
When did that metamorphosis occur for the ’70s singer/songwriter/leader of the Parrotheads? “Probably it was around the first time he put the Margaritaville name on a salt shaker-shaped pool raft labeled ‘Lost Shaker of Salt.’ Or went all-in on a brand partnership to sell a $499.99 Tahiti™ Frozen Concoction Maker®. Or when he signed off on the emblazonment of ‘I’m the Woman to Blame’ across a Tervis tumbler.”
There’s much more, from why he took over his own licensing (“because he could do it better than the people who were ripping him off with concert T-shirts that spelled his name as Buffet.”), and myriad ways “he could make sure that even when he left town [after a concert his fans] could still have the island getaway they so longed for.”
A must read.
Attending Toy Fair? Karen Raugust and I will be addressing the question, “Are You Ready For Licensing?” Sunday February 18, 3:30-4:30 p.m. as part of the Toy Association’s Licensing Content Connection seminars (free to registrants). Hope to see you there, or contact me at firstname.lastname@example.org to meet at another time.
NEW YORK, NY: December 19, 2016—I’ve been formally asking marketers about the challenges and opportunities for the year ahead at least since 1988 (before that if you want to limit it to music, home video, and video games). And I’ve been fashioning the responses into an annual (more or less) Fearless Forecast ever since.
Truth is the answers haven’t varied much over the years. For the licensing community in particular, the overriding challenge: Securing the right retailers for new and old licensing programs. The opportunity: Hitching onto the Next Big Thing (challenge: before it’s too late).
The word clouds here sum up this year’s survey responses as well as the longer-term themes, and even give voice to some of the more existential concerns (e.g. “Is licensing still the right nomenclature to describe the business?”)
Not wanting to prejudice responses, I deliberately did not ask about the implications of the U.S. election and growing nationalist sentiment in many parts of the world. Interestingly, no one brought those factors up unaided.
In conversations, however, when asked, it is clear there is concern about potentially stricter trade laws and how they might affect deal-making. Will IP owners and manufacturers hold off on some decisions — especially as they relate to B and C properties — until the dust settles and we have some direction? (Not a new phenomenon, even when there aren’t trade questions on the table.) Will there be greater focus on “made here,” in terms of origination of IP as well as manufacturing, wherever “here” may be?
- Closing licensing deals takes six months at the very short end of the spectrum, with 12-15 months an unscientific median.
- The move to “fast retail” that is spreading beyond apparel, challenging traditional licensing models.
- See #1 and #2 above, and note the inherent conflict.
- Managing expectations. There are very few seven-figure (let alone eight-figure) advances on licensing programs, and with the exception of a handful of high-profile entertainment and sports properties, precious few that will generate retail revenue of $10 million+ annually, certainly not in Year 1 or 2 shy of some major fad that would likely be short-lived. Yet IP owners new to licensing — and sometimes folks experienced in the field — invariably set those goals, only to be disappointed or to fail.
- Figuring out who to push off the shelf in order to get on the shelf. It’s the most elementary question for any new licensing program. Even in the age of “unlimited shelf space” online, the fact is consumers go for the handful of best-sellers. As in traditional brand marketing, it’s the #1 and #2 in a category that account for by far the greatest percent of sales.
Consider: In a pre-Christmas Target tour, looking at licensed properties, close to 10% of the toy section was given over to Star Wars, and just shy of 5% for Marvel. Paw Patrol, Teenage Mutant Ninja Turtles, even Shopkins, one of this year’s hottest girls’ offerings, were about 1% each.
- Speed is of the essence. See #1, #2 and #3 above! The winner is he/she who can “turn it around” while the property is still hot — goes for the IP owner AND the manufacturer — and that can keep refreshing the assortment on a 3-6 week cycle rather than quarterly or semi-annually.
- Be realistic. See #4 above. Always best to exceed expectations.
- Giving retail the differentiators it needs. Not just a single “exclusive” SKU, but a program.
Here’s to 2017’s numbers being better than 2016’s. And to your own participation in marketing and licensing being more fun, more productive, and more rewarding in the New Year!
BROOKLYN, NY; December 7, 2016—Here’s a two-question survey to help assess where the licensing and merchandising business is headed in 2017. Please respond by December 12th; I’ll post an analysis plus my observations later that week.