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Licensed Products, Good or Bad?

May 28, 2009

The most recent issue of Casual Living included an article and a separate survey about licensing in our industry. I hope you don’t mind if I give you my quick take on it.

In the article, a furniture analyst, Jerry Epperson, is quoted as saying, “There aren’t many consumer-recognizable furniture brands. Does it make sense to put a celebrity name on it? If nothing else, it gives the consumer warm and fuzzy emotions to say they bought that brand.” I agree that consumers don’t recognize many names in our industry. Brown Jordan is one of the few exceptions that customers ask for by name, year after year. Sometimes, we do notice an increase in consumers awareness of another brand when that manufacturer advertises heavily in consumer magazines. When that advertising dies down, the demand by brand goes away, too.

However, I don’t agree that consumers will buy a licensed brand just for the “the warm and fuzzy emotions” they get by saying they bought that brand. Cobranding with a well-known celebrity or trademark might bring a customer in, but what sells furniture is the BIG FOUR: comfort, style, perceived value, and quality. Without all of those features, no matter whose name is on the nametag, the product won’t be an easy sell.

As an example, look at the Brown Jordan La-Z-Boy project. These two names have high brand recognition but I found the product marginally comfortable, didn’t think it met the quality both are known for, and had so-so styling. For a moment I was willing to overlook these concerns because of pricing was so good and because of the brand recognition. However, the more I sat and looked, the more I realized the comfort and style would be a big problem.

Another example would be the Woodard Joe Ruggiero partnership. Joe’s name is well known by consumers and his designs set his product apart. However, the quality of the furniture didn’t meet the high expectations I have for Woodard. Worse, the comfort wasn’t as good as other lines we carry. Because of this, the product hasn’t gotten customer acceptance and hasn’t moved.

Agio has partnered Disney, one of the best know names in the world for quality and attention to detail. In the Casual Living article, Bob Gaylord, president of Agio International, was shocked at how successful this marriage was. Personally, I was disappointed at the offering. One design was a reworking of a design from 2008 that didn’t sell well for us. The other was charming but had few design cues that immediately identified it as Disney inspired.

I am not saying that these partnerships won’t bring customers into my store; they will. However, each has a problem with one or more parts of the BIG FOUR.  It amazes me that a manufacturer can be so blinded by a big name celebrity or logo that they forget what is really important in the selling equation. I suppose a celebrity name or logo blinds them. I don’t blame them. I would be doing my happy dance if I were a manufacturer who had just bagged Disney or La-Z-Boy. However, signing a big name is only step one of a long series of steps that lead to success of failure.

Comfort, style, perceived value, and quality are the next steps. A product has to have all of these features to be successful. If a consumer isn’t comfortable in a chair, they aren’t going to buy it - - - no matter whose name is on the furniture,. They won’t buy it if a hidden weld splatter snags their cashmere sweater or the chair has been welded out of level. They won’t buy it if they have seen a similar style at one-third the price in a big box store or warehouse club. This isn’t rocket science but I have seen so many partnerships fail because someone has put name recognition before the BIG FOUR.

I know there are some of you out there who disagree with me. In the Casual Living survey, one-third of dealers who responded carry licensed products and are satisfied with their sales. I fall into the other two-thirds of dealers who don’t think licensing is very important. If you are into licensing, would you please tell us what you are carrying, what the success rate is, and why you think it has been successful?

Yours in confused retailing, Bruce