The second instalment of the research piece Toy World and Informa, the organiser of BLE, have collaborated on.
Picking up where we left off yesterday, here are questions 4-6 from our licensing survey, giving a sense of how the toy community views the state of play in the licensing arena right now.
Again, with a negligible number believing the approval process to be straightforward, views are split between those who feel it is largely workable and a slightly larger number who find it over-complicated and protracted. With speed to market becoming increasingly important and the short window of opportunity for movie-related properties, a long approval process can put tremendous pressure on the supply chain and result in licensees missing key sales opportunities.
- Some licensors expect refreshed designs every year, which simply isn’t practical for some licensees or retailers. A protracted approvals process slows down the speed to market, costs valuable turnover and in some cases fines by retailers for late new lines.
- There is such a difference – some are a joy to work with and others give feedback that is simply not commercial.
I suspect that answers to this question were heavily dependent on which licensors were being referenced. Inevitably, there was a noticeable split between movie licences and other properties, with one specific licensor repeatedly identified as the main culprit. It seems that just about every licensee that has tried to sell product to retailers based on only having a SKU number and a retail price has experienced ‘challenges’ – who would have thought it?
- They need to realise we are in the world of “NOW”, consumers want things quicker than ever.
- It is absolutely a barrier when a licensee is kept under embargo and the trailer and lots of information is already out there on the internet. It significantly inhibits sales when a licensee can’t send images or launch product at the start of the season.
- Recent examples have certainly deeply frustrated retailers. However, I am not sure it will impact the end number – it just causes a lot of stress and pressure on relationships along the way.
On the plus side, slightly over half say they plan to spend the same or more than they did in the past. On the other hand, almost half say they plan to cut back. One interpretation could be that licensees will increasingly look to just back the winners, rather than taking more of a risk by signing multiple new properties. Responses may also be affected by product category: clearly, licensing remains dominant in some product sectors, while in some other areas, innovation and trend-driven product could be replacing character products.
- We must remain cautious right now and ensure we balance our level of risk as a business.
- It is really near-impossible to get product to retail without a strong brand. The only way to grow as a company is by creating innovation, delving into new and tangential categories and by having licences to carry those product lines to market.
To read the full article, published in the August issue of Toy World, click here.