Consumer habits dictate retail licensing trends, not brand owners
Historically, licensing agreements were dictated by brand owners. However, as consumers pronouncedly manifest themselves in brand conversations, their role in licensing trends globally has grown significantly.
Over the last few years, there has been a perceptible change in the way licensing trends have evolved in the retail industry. Historically, this was dictated by brand owners, but considering market dynamics, things are changing, and rapidly. One reason for this change is because the consumer is now at the center of most conversations taking place around the brand.
This is something that Maura Regan, president of International Licensing Industry Merchandisers’ Association (LIMA) has witnessed. She feels that with consumers now having closer relationships with a brand, they can help brand owners understand how to develop it across different categories and regions. “This relationship is changing the way licensing is working globally and is disrupting retail business, whether it’s online or offline or combination of both,” she added.
According to Gisela Abrams, SVP, Global Partnerships at LIMA, brands are becoming a significant part of a consumer’s life. “Additionally, brands are traversing geographical boundaries, and are advancing from the US to other countries and vice versa. This is exciting for consumers, the retail business and the brand licensing industry as a whole,” she noted.
One of the strongest reasons behind this trend is the upsurge in social media usage, which has ensured a dialogue between brands and consumers as well as buyers with each other. This engagement means that consumers are now in charge of the narrative.
“Also, the global trend is moving towards experiential buying, whether it is in retail or hospitality. With more consumers visiting social media networks before making a purchase decision, brands too are seeking ways to leverage these platforms and create events that will deepen the consumer’s relationship with the product and the brand,” Gisela pointed out.
ENGAGEMENT AROUND BRANDS
What is interesting to note is the full family engagement around a brand. Earlier, there were distinctive brands for kids and adults, and these rarely crossed over. Now, children are maturing faster and adults are staying younger longer, so the two buyer segments are intersecting on brands that the entire family can enjoy.
This brand crossover is happening across the world and is discernible in India too. According to Maura, this particular change in the Indian retail landscape is driven by ecommerce, and in some ways, the country has adopted online habits faster than other nations.
Does this mean that there is some merit in the ongoing debate about the survival of either online and offline retailers in the long run? Maura thinks that despite the business democratization brought in by ecommerce, there is role for both players. However, she cautioned, there is always need for retailers to revitalize themselves.
“Legacy retail brands need to reinvent themselves to avoid becoming outdated. Startups, on the other hand, need to rethink how they can shift from being the flavor of the month to create sustainability for their business. Both genres of retailers can do this best by having an emotional connection with consumers,” Maura concluded.