Trends in the Industry
26 November 2012
As we saw the various multifaceted advantages of brand licensing and franchising in our last article, it becomes necessary to analyze the trends of the trade. As the market for licensing and franchising grows, so do trends in the business fluctuate to adjust to the everchanging consumer needs and fancies. It is difficult to walk down the busy streets of the local shopping centre without noticing the colourful bears, bunnies and cats smiling at you. These animals and cartoon characters have captured a large part of the consumer market and cater to a larger consumer base, i.e., the kids. There has been a constant evolution in this area as more and more brand owners improvise their brands to please the tiny souls and to carve a place for themselves on the shelves of the superstores. Specialty stores are the order of the day, churning out fresh fashions and trends to remain appealing and in demand for the trend conscious tweens and teens, who now are their own purchasing-decision makers, and for the parents, who look for quality and value for money in the products their kids chose.
New and trendy characters are flooding the market, making the products they endorse more desirable and fanciful. Character licensing is a catching trend in the market, with traditional characters like the Flintstones, Winnie the Pooh and an assortment of Disney characters being replaced by the more hip and trendy Hannah Montana, High School Musical, Harry Potter and Barbie form of consumer goods like apparel, musical instruments, jewellery, watches and many more related products. Global licensing revenues from character, entertainment and TV licensing put together, according to statistics released by the Licensing Industry Merchandisers’ Association reaches an estimated US$2.5 billion annually. Interest from retailers and consumers in cartoon licensing and continued growth in the area is overwhelming.
The second-fastest growing trend following character brand licensing these days is fashion licensing, with revenues close to US$830 million. Running parallel is corporate brand licensing, which continues to be one of the fastest growing areas of the licensing business, raking in billions of dollars in revenues annually. When company names, logos or brands are licensed on products, this is referred to as corporate trademark or brand licensing. Creativity is the key to success and corporations extending their brands through licensing view their names, logos or brands as a way for the company to touch consumers. As corporations continue to recognise large amounts of money by lending their brand names to a variety of products, it’s no wonder corporate licensing keeps attracting new companies and finding new ways of using licensing as a marketing asset for their brands.
Not far behind is entertainment brand licensing, since entertainment is a field least-affected by adverse conditions in this economically unstable scenario. Who can forget the successful licensing program undertaken by the movie Star Wars, when the movie merchandise and toys were on everyone’s wish list. Think for example, how the charities and trusts created by the winners of various beauty pageants are a great way of utilising the image or brand of popular people and celebrities. Well-known celebrities in various fields lending their names to perfumes, clothing, footwear, accessories and other consumer goods is a visible phenomenom. A surprising trend is the name and image contribution by these celebrities to social causes, creating an instant following and delivering the message with little effort. Famous personalities across the globe have now been transformed into major well-known brands.
Another interesting field is sports licensing, with revenues as high as US$790 million annually. The hugely popular National Basketball Association is one of the highest royalty earners in the field, with merchandise ranging from shoes and caps to bedding collection and other accessories. Sports lifestyle is a catching trend among young boys, and sports-themed home decors are among the hottest trends these days. Therefore, major sports and sportstheme entertainment brands will continue to expand their licensing programs.
Following the trends in the market, joining the bandwagon with a fresh approach and becoming increasingly popular are technology licensing, art brand licensing, software licensing, music (and musical performer) licensing. It’s a competitive world. Who will win the race and capture the largest share in the market is a wait-and-watch game.
Lall Lahiri & Salhotra
LLS House, Plot No. B-28,
Sector - 32, Institutional Area,
Gurgaon - 122001, National Capital
Region, India
T: +91 124 2382202, 2382203
F: +91 124 4036823, 2384898
E: Rahul@lls.in
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