Licensing Survey toyworld The business magazine with a passion for toys
How can toy licensing recover its sparkle? Toy World presents the results of its inaugural Licensing Survey. Publisher John Baulch introduces the findings, which you can read over the next few pages, where we also present comment from the participants and offer some context to the feedback received from licensees.
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he toy retail market has changed considerably over time, but the pace of change in recent years has become especially noticeable. As an industry, toy suppliers and retailers have deservedly built a strong reputation for flexibility and reacting to prevailing retail conditions, adapting their business models to maximise on the opportunities presented by the changing market. However, are licensors as flexible as toy suppliers and retailers? The licensing community plays an integral role in the toy channel; as far back as I can remember, the fortunes of the toy and licensing communities have been inextricably linked. The licensing community is well-known for its creativity, as well as its boundless enthusiasm and optimism. However, it does have a particular way of doing things, and while toy companies have been forced to adapt and become more nimble and reactive in recent years, some have questioned whether the same could be said of some parts of the licensing community.
There is tangible evidence to suggest that sales of licensed toys have been in decline for a while now. NPD’s official 2018 sales figures for the UK confirmed that sales of licensed toys fell for the fourth year in a row. In 2015, licensed toys represented 29% of total toy sales – that figure fell to 23% last year. Of course, licensed merchandise has very much operated on a ‘pendulum’ basis for many years, and 2019 is being predicted as a comeback year in many quarters, with a series of major movie launches expected to rejuvenate sales. But will it be enough to reverse the fortunes of the entire licensed toy sector? And how can toy licensees and retailers collaborate with licensors to reinvigorate the licensed toy category moving forward? Toy World was approached by Informa, the organiser of the forthcoming BLE show, to work on a research piece which explores the current attitudes of toy licensees and retailers towards the licensing category– the upsides and the downsides, the opportunities and the challenges, its strengths and how partnerships with licensors could be improved
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for everyone’s benefit. The plan was to provide an accurate snapshot of the perceptions of the toy community towards licensing, and to look at some potential solutions to help turn around the decline in sales of licensed toys. The idea was certainly not to create any enmity between the two camps, nor to start some incipient ‘Game of Thrones’-style conflict, but to offer a window into the thinking of people in the toy community about the challenges they are facing with licensed merchandise, and to explore some of the potential solutions. We received some very honest feedback from licensees and retailers to the survey we sent out, the results of which are detailed below. Next month, part two of this article will look at the biggest challenges that licensees and retailers will face in the coming years, and what licensors could do to improve their partnerships with licensees and retailers. For now, here is a sense of how the toy community views the state of play in the licensing arena right now.