The Value of Licensing to Retailers

Licensing has been a part of retailing for many years but its importance in driving sales for retailers and suppliers continues to grow. So what does it actually mean and what impact does it have on our industry?

Licensors are the owners of the license - which can be anything from an entertainment brand like Minions, a design style like William Morris, or an entity like Battersea Dogs home. All of them are licensed brands used in the greeting card market. Licensees are those who want to use these properties and are prepared to pay for the privilege and are usually publishers or manufacturers.

Many businesses use licensed images for all their ranges; they will have established a reputation in the market for the quality and types of products they are known for and then it is important that the licenses they add to their portfolio are consistent and support this so that retailers do not become confused about what they stand for. I call this ‘fit’.

I believe the success of licensing is completely dependent on fit and for me a fantastic example of this is Glebe Cottage who from their earliest days in the mid 90’s have made sure that their products are at the forefront in using environmentally friendly technologies and materials to ensure they are always offering buyers environmental choices so they can support green issues in their product selection; Glebe Cottage license the use of images from The Wildlife Trust - a very comfortable fit with both brands' values supporting one another perfectly.

 

For the licensor, allowing others to use their images is a great way of extending the use of their images and thereby recognition of their brand in other areas. If the right licensing partner has been selected it is likely to be a good way of generating a steady income stream through upfront payments and royalties without the risk of investing in stock themselves. This has encouraged many museums and charities, who are always looking for new ways of funding their work, and often have the most wonderful treasures, to make images of them available for licensing to the appropriate manufacturers.

The Great British Card Company recognises the importance of strategic partnerships within the greetings card industry and as such they license from blue-chip organisations as well as individual illustrators. Because of their creative sensitivity they are able to leverage the brand values of National Geographic, English Heritage, Country Diary Of An Edwardian Lady, the Natural History Museum, The Medici Society, Bebunni, and more recently Avanti; a really broad portfolio.

Interestingly Nick Adsett Creative Director at GBCC confirmed that infact Eric the Penguin from Chris Masters is their most popular licensed range along with other key licensed illustrators and photographers include Stephen Hanson, Peter Cross, Becky Brown, Lee Fearnley, Barry Goodman, Richard Austin and Villager Jim. He says “with the correct level of regular investment licenses enable us to punch above our weight at retail, and offer differential from our own studio creative process." 

 

However it is not without issues if the licensor hasn’t got a clear set of brand guidelines which detail how the images or designs can be applied and the quality of products they can be used on - and has an agreed approval process - they may end up with their images being used on products they don’t feel are suitable. Then the ‘fit’ is poor and if retailers and consumers think the same this may be reflected in poor sales too.

A card company who is having great success with using licensing as a way of broadening the reach of their brand is Paper Salad. Now 11 years old the company has been involved in licensing a number of their designs to create gorgeous children’s apparel as well as glasses, notebooks, gift-wrap and giftware! Mim-pi, a company from the Netherlands took their vibrant patterns and turned them into a lovely children’s clothes range. On a recent trip to Paris, Paper Salad visited Maison & Objet to see the launch of a range of super cute notebooks by Pictura based on their bright and colourful TRIO cards.

Licensing is an expensive process for the licensee and this is almost always reflected in the cost and retail prices of the product, meaning that they are relatively expensive for the consumer and the margins smaller than ‘normal’ for the retailer. If a license has been well executed then both parties are normally accepting of this as this is the only way of getting access to the brand on those products. This is particularly obvious in the fashion market where clothing and handbags are often high-mid to premium priced. For men, it might be linking a sports car brand which they would aspire to own with a watch or pen brand that is more affordable.

We all know that humour is one of the strongest selling genre in the card market and licensing has a significant influence here too. Card Mix have had great success with many humour licences which include the very popular Off the Leash.

Keith Gillespie, Sales Director for Cardmix, comments "Licensing provides us with a rich resource for content for greeting cards. This has often been created for other purposes such as books, or in the case of Chef & Sue, for a cartoon strip for Waitrose. Licensing brands is a great USP for the company; exclusive content can be of value to our retail partners. Often the support of other branded product is helpful to retailers to build a story in their stores."

So to return to the question I posed at the beginning of this piece: what is the value of licensing to retailers? In terms of sales the answer is 'significant'. Whether retailers always realise when a range is licensed is unlikely particularly if it is an illustration or artwork rather than linked to a well known brand. In many cases it is not relevant, the key question is ‘is the imagery , text or humour on the card going to be suitable for the retailers customers’? If the answer is ‘yes’ that is all that matters.

What is vital is that the retailer makes the most of the opportunity that stocking the licensed products represents. If the links to the brand will increase sales then it is important that they make the most of this, particularly as the item is likely to be premium priced to cover the licencing costs.