What are Retailers Looking for in a Licensed Property/Brand?

Understanding retailers and what they are looking for can help artists get their art onto products and into stores. The major need that retailers are searching for is product differentiation to drive consumers to their stores. The following article by John Haesler of MHS Licensing describes differentiation and other retailer needs. John is an expert in this area because he spent 12 years as a buyer and Licensing Director at Target before joining MHS Licensing agency in 2001. MHS Licensing agency represents 33 artists and brands including the Hautman Brothers. In 2008, the Hautman Brothers art on products grossed $60 million at retail.

What are Retailers Looking for in a Licensed Property/Brand?

by John Haesler, MHS Licensing

First you need to understand the channels of retail: Retailers are segmented into several different distribution channels. The traditional channels are Gift (Mom and Pop, independent stores), Department Stores (Federated - Macy's, Bloomingdale's), Mid-tier (Sears, Penney's, Kohl's), and Mass (Wal-Mar, K-Mart). The evolution of retailing and the desperate attempt to create a unique niche for themselves has enabled some retailers to create their own channels: mass with class (Target), Discounters (TJ Max, Ross Stores), Down and Dirty (Dollar General, Dollar Stores).

While each of these retailers are slightly different, they are each looking for the same things from a licensing property/brand . . .

• help differentiate them from their competition

• add some perceived value to their assortments

• bring some kind of built in equity which the retailer can benefit from quickly

• either match their current demographics or help them acquire a demographic they are seeking

• offer some kind of promotional opportunities

Differentiation: Retailer X does not want to have to carry the exact same product as Retailer Y because then they have to engage in price wars. Thus, if they can have something different, they don't have to compete. Consider offering an exclusive to a particular retailer or at the very least offer a different version/design.

Perceived value: The retailers know they are paying a premium (due to royalties) for licensed product and will have to probably price it higher than generic. Your property must offer a perceived value to justify that higher price. Insist that your licensees build in some value added features to your licensed product to make the consumer feel good about spending the extra money. (i.e. a tie in such as environmentalism/education).

Equity: The retailer does not want to spend its advertising dollars building your brand. You MUST have already done that. They are however, happy to spend their advertising dollars bragging that they have your property, IF, your property is recognized by their customers. Leverage media exposure, get on Oprah, make the cover of Time magazine but somehow build awareness.

Demographics: Pick a demographic and stick with it. The world is too specialized. You can't be all things to all people. If you are a kid's property, embrace that and be the best kid's property you can be. Don't try to be an adult property. The retailers see right through that. The only way to be all things to all people is to spend a lot of money to change the public's perception, or to have a lot of equity built in already. Find a retailer who is trying to appeal to your demographic and go after them.

Promotional Opportunities: Retailers are looking for new marketing handles and campaigns. Be creative and think beyond coupons and contests. How can the retailer leverage your property or its attributes to drive more traffic to their store? Spoon feed them ideas and they will eat them up.