As the chart below demonstrates, 2010 is shaping up to be another growth year for retailer exclusive and direct- to-retail (DTR) licenses. The strategy that started out quietly in the 90’s, with a few retailers and licensors like Target and Cherokee teaming up, is now a mainstay at retailers across virtually all categories of goods. And every licensed property and agent is looking to make this kind of deal because they provide consumers a superior price/value experience while capturing a greater commitment from the retailer for shelf space and features.
|Selected Retailer Exclusive Licenses - 2010|
|Davids Bridal||Vera Wang||Budget wedding dresses|
|Brooks Brothers||St. Andrews Links||Apparel & accessories|
|Macy's||Madonna's Material Girl||Apparrel, accessories, footwear|
|Payless ShoeSource||Champion Fitness||Footwear|
|Target||Dole||Frozen fruit bars|
|Bed, Bath & Beyond||Real Simple||Home goods|
|Target||Real Simple||Home office|
|Meijer||Katie Brown||Kitchen textiles,tabletop, garden|
|Macy's||Eve Mendes||Latin-inspired dinnerware|
|Office Depot||Christopher Lowell||Office furniture|
|JCPenney||Supergirl by Nastia||Apparel & accessories|
|Sears||Bongo Junior||Denim apparel|
|Target||D-Signed (Disney)||Apparel & accessories|
|Staples||Yak Pak||Composition books|
|Home Depot||Martha Stewart||Kitchen cabinets|
|H & M||Lanvin||Men's & womens's apparel|
|Sears & Kmart||Casa Cristina||Home goods|
|Pet Smart||Martha Stewart||Pet accessories|
|Pet Smart||Fischer price||Pet toys|
|Claires||Glee||Fashion jewelry & accessories|
The above suggests some interesting trends that those of us close to the DTR licensing world have been witnessing. TV “experts” from cable and even PBS have become licensing commodities – everyone wants their own line - but Martha continues to dominate with her renewed licensing activities over the last several years. Retailers, clearly sensitive to changing demographics, are getting better at regionalizing and localizing their mix and are seeking out brands targeted to ethnic groups like the Eve Mendes relationship with Macy’s and the Casa Cristina deal with Sears. And while fashion continues to be THE category for the licensing industry, consumer brands from a wide range of categories are finding ways to expand their brand equities into a range of product categories.
We’ve explored all the reasons why this trend makes sense over the past several years in this blog. But key among them is the continued growth of retailers private brand portfolios and their improving talents in product sourcing and as brand managers. Licensed brands can play a role in private brand portfolios because they tend to be incremental to internally developed control brands and capture share from national brands. They increase the size of the pie for the retailer’s private brands.
Last week the Wall Street Journal reported that “Chief Executive Lars Olofsson wants to transform Carrefour from a big box selling other companies' brands into a consumer label in its own right. And he wants those in-house brands to be the least expensive around, making Carrefour to groceries what IKEA Group is to furniture.” Could licensed brands play a role for Carrefour? Its closest competitor Walmart has used the strategy effectively in several product categories.