Wal-Mart, Target and the licensing love triangle

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6a0133ec87bd6d970b013485369ded970c-200wi Guest blogger Carol Spieckerman is President of newmarketbuilders. Carol and her company serve as an out-of-enterprise resource to licensors, licensees and agencies as they seek to optimize their direct-to-retail positioning. Carol utilizes her over 20 years of retail experience and her unique grasp of directional developments at retail to keep newmarketbuilders’ clients ahead of the curve and relevant with major retailers. She is a speaker, retail and branding thought leader and regular contributor to national news and industry publications.

Direct-to-retail licensing is on the rise
as brand brokers like Iconix and even sourcing powerhouse Li & Fung pursue direct deals with major retailers such as Walmart, Target, and Kmart.  However, the traditional model, a brand owner/licensor granting the rights to a supplier/licensee to market products to retailers under a brand, is still prevalent.  We call this the licensing triangle, and one thing’s for sure, it isn’t always a love triangle!  As challenging as it can be to keep the fires burning between suppliers and retailers, licensing is inherently a riskier proposition . . . particularly when rationalization comes calling.

6a0133ec87bd6d970b01348536a476970c-200wiHere’s where licensors can miss the connection:  Most licensors tell us that they are worried about BRAND rationalization.  They see retailers eliminating national brands in favor of private labels and know that it is heading their way.  However, they should be just as worried about SUPPLIER rationalization because retailers are also looking for any excuse to reduce their supplier base . . .  and the suppliers on the chopping block may be your licensees.

In my experience; however, licensors often leave the licensee out of the equation when they lose ground with a retailer; instead they blame the retailer: “They just don’t get our brand.”  “I knew that marketing guy was trouble.”  Retailers, on the other hand, tell us that licensees can be a licensor’s weakest link and when that is the case, you have to know that retailers place responsibility squarely on the licensor.  Bottom line: There are some terrific licensees out there; ones that provide expertise and retail access that would otherwise prove elusive; however, your brand at retail is only as strong as your weakest licensee.  
So, at a time of rampant rationalization, private label proliferation and retailer AS brand, it’s time for licensors to reignite the flame by getting reengaged with your retailers and your licensees as never before.

Here are a few tips on how to keep retailers from getting the wandering eye:

1.    Constantly assess, not only on your own portfolio of brands, but also on those of your licensees.  If their brand portfolios aren’t important to the retailers that drive your business, your brand may not be enough to make up for it.

2.    Accompany your licensees to significant meetings with retailers.  Some licensees discourage licensor presence, portraying their retail relationships as fragile and tenuous.  In my experience, that alone can be a trouble sign.  On the other hand, many licensees tell us that they welcome licensor presence and they don't feel as though they are getting enough support.  When your brand is on the table, and on the line, you owe it to yourself to be present.

3.    Increase the frequency and intensity of licensing summits and collaborative sessions.  In order to have a compelling retail proposition, you and your partners must be in complete alignment, not just with your brand messaging, but also with your retail partners' brand visions.  Your licensees will need to have more than a style book in order to make that happen.

4.    Be more than a brand-centric cheerleader (or dictator) for your licensees; be a resource.
  Licensees tell us that they are hungry for information, tools and tactics and our post-presentation Q&A sessions certainly bear that out — Q&A has been running as long or longer than our presentations at licensor summits lately.  Many of our clients are getting ahead of the curve by cutting back on big brand launch events in favor of more focused and retail-relevant programming that makes their teams, and those of their brand partners, smarter.

Licensees are more than middlemen, they are a marketing arm for your brands. Choose wisely, support vigorously and tend to the triangle!

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