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Retailers split on value of licenses

Exclusive Research

What do retailers think about licensed products? It depends on who you ask. If you ask those who carry licensed products, they seem pretty high on its value. But if you ask those who don't, you'll get a different story, with a number of variations.

One casual furniture retailer said, “Our company culture is not based around a license or brand mentality — our company is our brand.” A furniture retailer said, “I want no part in promoting the mindless idolization of celebrities.” A pool-and-patio retailer said, “I found the cost to be much higher, the quality not any better and consumers did not buy based on name.”

And it's the naysayers who made up the majority of the retailer respondents. Almost two-thirds are not carrying licensed product.

The remaining one-third currently do carry licensed product. As one casual furniture retailer put it, “Licensed product brings people into the store.” Another said, “A customer will look at licensed products because of the name.”

So what do these two different groups think about the future of licensed product? Twice as many retailers carrying licensed product than those who don't, think outdoor accessories and dining sets will become more important in the future.

Retailers were asked to react to a list of positive and negative opinions about licensing. Those carrying licensed product align with the positive ones and those not carrying it support the negative statements.

Four statements stand out and point to the need for and the opportunity to promote a change of opinion about licensed product with retailers. In each case there's a significant difference between the percentage who carry licensed product and those who don't.

The main positive statement is: Licensing has a built-in story and consumers ask for it. The negative statement is: the difficulty of dealing with licensing terms and the quality does not match. Each statement requires a special emphasis from those wanting to promote licensing for the future.

Retailers' perceptions about the future of licensed product

Will become LESS important Will become MORE important
Those who carry licensed Those who do not carry licensed Those who carry licensed Those who do not carry licensed
Outdoor accessories 24% 40% 49% 20%
Outdoor rugs 32% 36% 34% 21%
Outdoor dining sets 25% 41% 31% 13%
Outdoor conversation groups 28% 40% 25% 22%

Percentage of retailers who agree licensed product ...

Those who carry Those who do not carry
Provides a built-in story 79% 54%
Enhances store's brand or image 69% 50%
Makes advertising easier 62% 49%
Brings consumers in the door 63% 41%
Has marketing/advertising support available from licensor 43% 32%
Has higher margins 43% 21%
Has consumers asking for them 45% 19%

Percentage of retailers who agree licensed product ...

Those who carry Those who do not carry
Is expensive by consumers' standards 67% 71%
Is too expensive to carry 29% 51%
Has quality that doesn't match expectations 24% 44%
Is difficult dealing with licensing terms 14% 36%
Is not as good in terms of quality as that found in non-licensed product 24% 31%

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