March 13, 2019 | By: Michael Stone, Chairman & Co-founder, Beanstalk
As the retail ecosystem changes rapidly, many brand owners, marketers and retailers are scrambling to figure out how to adapt. It’s likely that many winners will do so by using a frequently overlooked marketing strategy and tool: brand licensing.
That’s according to Michael Stone, author of The Power of Licensing: Harnessing Brand Equity (Ankerwycke, 2018) and Chairman and Co-Founder of Beanstalk, global brand extension licensing agency. “Although there are doomsayers who look at store closings as harbingers of the death of retail, retail is actually expanding: consumers are shopping and sales are up,” says Stone. “The industry is just changing, and retailers, marketers and brand owners need to pay close attention if they want to win in this exciting new landscape.”
Brand licensing – the legal permission from one company for select others to use its brand on different lines of products – has a strong track record of helping brand owners and marketers maximize and extend the power and reach of an already strong brand; licensing enables companies to go outside their core businesses, reach new and existing consumers at new touchpoints and support brand messaging, says Stone.
“In today’s disrupted retail environment, brand licensing has new, exciting and effective applications,” Stone says.
Among the areas where licensing has, will have or can have a transformative role are…
Pop-Ups and Other Experiential Marketing Strategies
Experiential marketing allows the consumer to participate in the brand – to “feel” it in a way that isn’t possible with traditional marketing. Experiences that immerse consumers in a brand are perfect for licensing, and they range from hotels and theme parks to playgrounds and exhibits.
Some examples of experiential marketing where licensing may well play a role: Opening soon are the Equinox Hotel, the Restoration Hardware Hotel and the Shinola Hotel. And, a couple of years ago, InStyle magazine licensed JCPenney to open the Salon by InStyle in many of its stores featuring an array of beauty services and products.
Pop-up stores are multiplying exponentially – for instance, a Birkenstock pop-up store was designed to communicate a new brand message and offer a new range of products, such as beds and creams for feet and hands. Amazon teamed up with Calvin Klein for a pop-up for the last holiday season (and the list goes on).
Both experiential marketing and brand licensing cut through the clutter of traditional and digital advertising by engaging consumers where and when they shop, rather than telling a brand’s story through words. “Brand licensing tells the brand’s story through the product itself. Experiential marketing tells the brand’s story through literal, physical spaces,” says Stone. “Given their similar strengths, it only makes sense that these two types of brand extensions have been and will increasingly be used in tandem.”
Stone adds, “It’s not just products anymore: experiences – like pop-up stores and restaurants – can and are being licensed as well.”
The Rise of Artificial Intelligence (AI), Virtual Reality (VR) and Augmented Reality (AR)
In the future, companies will license AI products and AR apps, and licensed products and services will be featured through an AR/VR lens. These new technologies make it easier for consumers to get information, see and experience products and make purchasing decisions. Already, Amazon’s Alexa (AI) can give consumers product information and make a purchase; IKEA has IKEA Place (AR) that allows consumers to place its products in their homes in an imaginary, virtual way; and Gap has DressingRoom (AR) that lets consumers try on clothes at home – again, virtually.
Some brand owners may grant licenses to other companies that would make them AR/VR services which would then be used in those brands’ stores. And licensed products will very likely be featured in the virtual spaces of things like AR dressing rooms and living rooms – which will be a powerful new way of getting exposure for the brand owner.
The Connected Shopping Journey
The lines between online and offline commerce are blurring, and there’s no sign that this trend is going to slow down. While the majority of sales still occur in brick-and-mortar retailers (less than 15% of total retail sales were done online in 2017), the smartest companies know that consumers are using digital tools as part of their “connected shopping journey.” For example, young people are spending 80 hours per month on their mobile devices, online retailers are opening brick-and-mortar stores and offline retailers are getting increasingly better at ecommerce.
Mattress company Casper is a great example: it’s a digitally native brand that’s moving into the physical retail space with brand extension products, such as pillows and sheets, that are being sold in stores like Target. As Casper’s brand extension catalogue grows, it’s a distinct possibility that at least some of these products will be licensed in the near future.
“Where, when and how consumers buy goods is shifting and, if companies want to succeed, they need to keep up with the trends that are already having an outsized impact,” says Stone.
For more information or to speak with Michael Stone, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications at +1 (212) 255-8386 or firstname.lastname@example.org.
About the Author
Michael Stone is the Chairman and Co-Founder of global brand extension licensing agency, Beanstalk. The recipient of 23 LIMA International Licensing Awards and soon to be an inductee in the LIMA Licensing Industry Hall of Fame, he has been instrumental in driving the evolution of brand licensing as a marketing tool used by many Fortune 500 companies. Stone has served as an adjunct professor of Brand Licensing at Baruch University School of Business and Long Island University Post. Stone is a member of the board of Year Up New York, a charitable organization committed to closing the opportunity divide facing urban young adults. He has a B.A. from Hamilton College and a J.D. from Emory University School of Law.
Beanstalk, a global brand extension agency, works closely with our clients to unlock brand equity and create many of the world’s most recognizable products and services. We help leading brands, celebrities, media properties, manufacturers and retailers creatively find ways to strengthen their relationship with their most important stakeholder – the consumer.
Beanstalk offers a breadth of services including brand representation, manufacturer representation, icon representation, retailer partnerships, STUDIO B creative services, approvals management, legal and financial services, and royalty auditing. Blueprint – Powered by Beanstalk, our consulting division, advises clients through four key practice areas: brand extension + retail development, research + insights, design + identity, and operations + governance. Tinderbox, our digital division, works with gaming and new media properties to realize their potential in the world of consumer products.
The company is headquartered in New York, with offices in London, Miami and Cincinnati and affiliates throughout the world. For more information, please visit www.beanstalk.com.