Hot Brands

Ahead of BLE, rights owners share their strategies for securing, and keeping, precious shelf space at retail.

The sale of licensed goods and services continues to be very big business, with revenues reaching $262.9 billion globally in 2016. That number, from the Annual Global Licensing Industry Survey conducted by the licensing industry trade body LIMA, reflects a 4.4-percent rise on the previous year.

Entertainment and character licensing dominate the global business, bringing in almost half of worldwide revenues. That $118.3-billion slice of the licensing market is what brand owners are eyeing as they look to deliver apparel, toys, books and more based on the characters that kids have fallen in love with through the TV screen.

So what does it take to make that connection with the viewer that will then translate into retail opportunities? In the case of the mega-hit Power Rangers franchise, which marks its 25th anniversary next year, kids are eager to masquerade as their favorite ranger. “You can look like what you see on TV,” says Frederic Soulié, the executive VP of global distribution and consumer products for Saban Brands, on the importance of the role-play and costumes categories. “Even the toys, including the morphers, look exactly like what you see on the screen, so that gives Power Rangers an edge.” Moreover, the brand has something for everyone, he explains, because there are five rangers, reflecting a range of ethnic backgrounds, and each sporting a different color costume. “That is the secret sauce that makes Power Rangers accessible,” Soulié observes.

The same could be said for the younger-skewing Sesame Street. “Everyone has their favorite character who they can relate to in their own special, personal way,” says Risa Greenbaum, the assistant VP of international media business, Europe, at Sesame Workshop. “Because we have such a large roster of characters, and they all come in different sizes, shapes, colors and personalities, they continue to lend themselves very well to a wide range of categories.”

Indeed, the Sesame Street brand is flourishing. “Even though we have many of the typical preschool categories locked in, we continue to get interest from additional apparel partners,” she says. “We’re looking at growing our homewares and accessories programs. We have our plush partners in place, and now we want to look at extending the toy range in other areas.” Ancillary toys, in particular, will be a big push at BLE, “whether it’s figurines and playsets, games, puzzles or bath toys,” Greenbaum says.

She adds that Sesame Workshop, which has traditionally had global toy deals, has recently made headway with regional partners across Europe. Even tried-and-tested brands must find new avenues to reach shoppers and continue to make noise in the consumer-products space.

In the case of Power Rangers, the show features a new theme every two years along with a new cast and setting. “With that comes a brand-new set of toys on the licensing side,” Soulié says. “Everything is different, from the weapons they use to the tools, vehicles and Zords.”

The Japanese brand BEYBLADE uses a similar strategy. “BEYBLADE has a newness each time it launches,” says Natasha Khavin Gross, the director of TV sales, marketing and licensing at New York-based SUNRIGHTS, which manages the property in Western markets. “With each reboot [of the series], there is a new storyline with fresh characters and adventures,” Gross says, and that carries over to the toys as well. For example, Hasbro’s line of spinning tops features “a new way to win wherein a player can defeat their opponent by essentially ‘bursting’ their opponent’s spinning top,” which is a big draw for young fans, Gross says. Key categories for the brand include apparel, party goods, games, puzzles, sleepwear, bedding and publishing.

Jennifer Coleman, 4K Media’s VP of marketing and licensing, says that “finding new partners to work with in different ways” is critical to rejuvenating the Yu-Gi-Oh! brand. “We look for different ways to bring the merchandise to our fans and create a broader fan base.” It’s also about guiding those partners. “Knowing the brand as well as we do, we can steer [retailers] in the right direction in terms of what we think the fans want,” Coleman explains. She says some partners are even going as far as hiring fans of properties like Yu-Gi-Oh! who can speak to the types of products that might capture consumers’ attention, and purchasing power.

But no matter how innovative the property or product is, retail is not an easy game, even for evergreen brands. “Competition is always a challenge,” says Sesame’s Greenbaum. “We’re all going after the same limited amount of shelf space. These days you have to be a little bit more creative when you’re looking at retail and try to figure out a match that works for both partners. We’re looking at innovative ways of working with retailers, including doing exclusive products or windows.”

Saban’s Soulié concurs, noting, “What you often see these days is a revolving door of entertainment brands based on movies coming and going at retail.”

The closure of brick-and-mortar stores is also partly responsible for the challenge of getting items on shelves. “The whole retail environment is difficult,” says Marja Kerkhof, the managing director at Mercis, which handles the Miffy brand. “Online sales are great and growing rapidly, but they are not yet making up for what we are losing in stores. That’s a threat at the moment for every property and business. There’s a lot of fragmentation, and the big retailers don’t seem to have yet found the answer to the trend toward internet sales.”

The challenging environment means licensors must, at times, make difficult decisions when dealing with retailers. “Sometimes you have to give someone an exclusive or make special designs,” Kerkhof notes. “We can’t be greedy. It’s very much a matter of cultivating a good relationship with a retailer, appreciating them and being loyal to them,” rather than trying to get products into every store.

“The biggest thing retailers want is differentiation,” says Lloyd Mintz, the senior VP of global consumer products at Genius Brands International. “Our biggest challenge day in and day out is finding room in between the industry giants. It is our job to identify white space in the market and fill that vacuum with great Genius Brands content.”

Saban’s Soulié reflects a similar view when he says, “What we do with any of our brands is try to customize the experience for retailers as much as we can.” For example, when the feature film Saban’s Power Rangers was released by Lionsgate on Blu-ray and DVD, there were different versions of the product, including some with bonus features, depending on whether it was purchased at Target or Walmart. “There’s an incentive for the retailer to work with you if you’re offering them something a bit different,” he says.

Sesame’s Greenbaum believes that a successful retail strategy involves “looking at your brand and trying to figure out what you can do to pull something special from each of the characters and create some dynamic product that will resonate.”

It’s not an easy task, she continues, because “the product needs to not only look great but be innovative as well. Everybody can do a plush, but do you have a plush that does something different and that a child can relate to in a different way? Retailers need to know their consumers will connect with a product.”

It also helps to give consumers themselves something special. “Yu-Gi-Oh! is still not out there in a huge way at retail,” 4K’s Coleman says, so when fans see someone with Yu-Gi-Oh! merchandise, they clamor to find it. “It’s a bit of an insider thing, and fans feel like they are part of an elite, tight-knit circle,” which helps drive sales.

In some cases, it can be beneficial to think about licensing and merchandising right from the get-go. “For all of our shows, from day one, we think about how we allow consumers to relive and recreate their favorite aspects of the show at home in their own rooms or with their family and best friends,” Genius Brands’ Mintz says. “With Rainbow Rangers, we thought, What is a vehicle that a 4-year-old girl can ride? She can ride a scooter, so we put the rangers on scooters because that’s a great way for little girls to reimagine that brand franchise.”

SUNRIGHTS’ Gross says that in this competitive environment, retailers are “narrowing their programs” and looking for “hot brands, but also robust programs with merchandise across multiple categories that can be handpicked. It’s quite challenging, but the best way to appeal to the retailer is to let your hot items like toys lead the race and slowly layer in other categories until the brand is a proven success.”

She adds: “The key is timing and striking when the iron is hot. There is such a delicate balance in getting product out at the right time to hit peak demand. Nowadays, a retailer has to ask for a brand before a licensee approaches a brand for a license.”

A silver lining related to the fact that retailers are not necessarily “buying big” is that some are taking a long-term approach and “buying smart,” 4K’s Coleman says. “They’re testing products and making sure that the designs are working. If they’re not working, they’re not simply walking away from a property. Retailers are asking why not and what else should be featured in the product instead. They know that if they find the right mix, it’s going to resonate with fans and reach consumers.”

But the physical shelves are shrinking, which makes the new wave of opportunities in the online world all the more enticing.

“Prior to five years ago, there was virtually no app business, so the digital industry was essentially video games,” says Genius Brands’ Mintz. The development of apps now means companies can “monetize a digital fingerprint beyond video games.”

Gaming is a category that Saban Brands is “getting a lot more serious about,” notes Soulié. The company recently launched a new mobile game tied to the release of the latest Power Rangers feature film.

4K’s Coleman is finding that mobile gaming is a great way to bring in a new generation of Yu-Gi-Oh! fans, as well as to draw old fans back into the trading card game. “You can’t necessarily take trading cards in your pocket and play wherever you want, so these mobile apps are vital to engagement with the brand. We’re seeing a number of lapsed players come back into the game because they can easily play digitally on their phones as they commute, for example.” Coleman also sees mobile games as a means of attracting new fans who can get hooked on the digital game before they invest in the trading cards and participate in in-person tournaments.

The BEYBLADE BURST “app mimics physical play [of the spinning tops], and it is exciting for kids to share the experience of battle with their friends,” says SUNRIGHTS’ Gross. The company is also pursuing digital game apps for casual fans of the brand.

Classic brands like Miffy are getting into the digital space as well, with an app that allows kids to read stories and play games. Meanwhile, Sesame Workshop is riding the Snapchat craze, having already launched a Big Bird Snapchat filter in the U.S., with plans to do more with the company later this year. “In Asia, in particular, we’ve got some great new filters from Snow,” Greenbaum says, referring to Snapchat’s Asian rival. “We’ve already seen success with that, with more than 6 million downloads for Elmo and Cookie Monster filters combined in Asia.”

In seeking success in retail, it also helps to widen your target base. “We know our audience and consumers pretty well,” says Saban’s Soulié. “We can tailor the experience by targeting different segments, from the little kids between 4 and 8 watching the show on Nickelodeon in the U.S. or other channels worldwide to an older audience that is looking for collectible items.”

In the case of Saban’s new property Rainbow Butterfly Unicorn Kitty, “I can see T-shirts featuring the kitty as a cool fashion statement for older kids, stemming from a cultural obsession with unicorns and memes being exchanged on the internet,” Soulié says. “We’re trying to capture that trend.”

Mercis’s Kerkhof has noticed a similar pattern with Miffy. She says that in addition to preschoolers who love the books and TV series, Miffy has “a following of people who like design and graphic design.”

Reaching consumers is the name of the game, and rights owners are poised to find—and entice—them wherever they may be.

Pictured: Plush based on Mercis’s Miffy.