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Brand and Lifestyle Licensing: One Customer Means Multiple Opportunities

11/23/2017
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As investigated in our “Global Trends Shaping Brand and Lifestyle Licensing Part 2” Global Briefing,  Brand and Lifestyle Licensing presents unique opportunities for businesses. Many companies trademark their established brands/properties to other companies enabling the company to expand its brand equity to new areas and most importantly to generate additional revenue in the form of royalties.

The second part of this comprehensive report highlights opportunities and key challenges while providing recommendations on how to succeed in today’s ever-more overcrowded and fiercely competitive marketplace.

Source: Euromonitor International

Source: Euromonitor International

Opportunities beyond established categories

Industry sources identify key growth opportunity areas for brand and lifestyle licensing across the fmcg space as follows - fragrances, sportswear, watches, sunglasses and homewares. All of these categories align well with brand and lifestyle licensing while all are projected to record positive performance over the next five years globally in terms of category growth. Furthermore, in overall fmcg, jeans, swimwear, bottled water, energy drinks and drinking yoghurt are also tipped as categories with potential for further expansion.

Homewares: Good potential

Companies in brand and lifestyle licensing business are increasingly interested in the homewares space. This is a category where only a tiny fraction of products are licensed, so it is very far from saturation and has the space to accommodate brand and lifestyle licensing franchises that seek to expand.

Theme parks: Big business

Globally, the theme park business is huge and growing thanks to its wide appeal just as licensors search for new and innovative ways to leverage their property, enhance brandawareness and connect with consumers. As they grow, they will need new offerings to compete, keep their attractions fresh and attract new and repeat visitors which presents unexploited opportunities for brand and lifestyle businesses.

One size fits no one

Choosing the right partner in the right category is absolutely vital in brand and lifestyle licensing. Licensors must ensure that the category in which they are planning to expand into is in line with their brand’s DNA. There needs to be a strong alignment, and a selective approach should be adopted. Brand and lifestyle licensing must first start with products that the consumers would believe are relevant.

Criteria for licenseability

In today’s ever-more overcrowded and fast-evolving marketplace there are many factors that constitute the criteria making a brand licenseable, notably high awareness and strong recognition, breath of appeal, unique selling point that differentiates the brand from competitors, global adaptability, being able to create an emotional connection with consumers and ease of social media adaptation.

Retailing landscape: Go pop-up

Pop-up stores could offer a new platform for lifestyle franchises which may have difficulties getting their merchandise on shelves in established channels. If executed correctly, it could well be an alternative route to market. Coca-Cola, M&M’s and Harley-Davidson have all been experimenting with the model in recent years.

Private label opportunity

In terms of licensing, private label is mainly in the apparel space and dominated largely by character/entertainment franchises. However, there are good prospects for brand and lifestylelicensing since there is already considerable demand for licensed private label merchandise and in terms of demographics, there are many cross-overs between character/entertainment franchises and brand and lifestyle licences. Working closely with retailers would also help secure much-prized and sought-after shelf space for brand and lifestyle franchises.

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