July 12, 2010 • Sarah Schwartz
What’s in a Name?
Understand the licensing game in order to play it best
Licensed product seems to be especially omnipresent in stationery, which is not surprising, given that ours is a business rife with designers. Whether the product is from an A-list designer, like Kate Spade who produces for Crane, or from a rising star, like Erin Smith, licensed product differs from its non-licensed brethren in several key ways from its inception – and as such should receive a modified appraisal from retailers considering any such line.
In essence, a licensed product is more complicated than its in-house-created counterparts. Contracts between the artist, or licensor, and the company wholesaling the product, or licensee, are necessary. A licensed item costs more to produce since there are fees to the artist to consider, and tends takes longer to produce.
“You have to understand that the licensor will require full control of approval,” explained Todd Ferrier, president of Lifeguard Press, “and you have to account for this in not just you scheduling but also cost of development.”
For that reason, the stakes are higher and whatever the product, whoever the artist, one equation holds true, as Ferrier put it: “The success of any collection is all the elements coming together correctly: the designer’s relevancy within the market, physical product design and price points. If any element is missing then you just will not see the sell through necessary to carry the additional cost of a licensed property.”
Approaches and Followings
Despite the underlying principles, there are nearly as many approaches to licensed product as there are companies producing it. Product ranges don’t just mirror artists’ work, they mirror the licensee’s overall philosophy of how licensor and licensee should work together profitably. For example, Pine Ridge Art uses solely licensed art for its two divisions: Pine Ridge Art, which produces calendars and related giftware, and the “more experimental” Art Boutique line, which produces giftware and stationery.
Artists are chosen on the strength of their work, noted the company’s Jacquie Severs, creative and marketing manager. “It is always helpful if an artist has a following who will seek out their product, but we have never relied on the following of an artist to sell the product. We start by choosing art we love, and we trust consumers will love it as well. If the artist has a following, that is a bonus.”
Inviting Company’s product range encompasses paper tableware, stationery and gifts, with about 40 percent licensing-driven, said Elizabeth Upchurch, vice president of sales. Their current roster includes Naughty Betty, Sonia Davis, Simplyput by Ashley Woodman, Mindy Weiss, Heather Bailey and Erin Smith. “We like to find emerging artists – ones who have somewhat of a following, but are still relatively ‘undiscovered.’ It’s very exciting to see a customer who is familiar with an artist recognize new products by the same artist. To a certain degree, the licensed product already has a developed target audience.”
An important part of their strategy can be replicated by any venue evaluating its own merchandise mix. “We consider the look they bring to our assortment, so that we are not competing within our line for the same dollars,” she described.
At Mara-Mi, roughly 15 percent of the line is licensed, commented Jeanne Bleu, trend director, with current licensees including Thomas Paul, Nathalie Lété and Amy Butler.
The company takes an artist-by-artist approach. “If the artist has a very distinctive style, it may not matter whether they are well known,” she stated. “For others, name recognition is very important; they may have a following that broadens our customer base and gives the product a cachet not easily achieved any other way.”
Regardless, “the art/design look must be appealing enough to sell even without the name behind it,” Bleu continued. “It must be a look that is compatible with our overall branding, yet offers a unique twist.”
Lifeguard Press solely focuses on high-end brands to create its stationery and giftware, with a current roster including Lilly Pulitzer, Jonathan Adler and Susan Branch. Ferrier described the benefits and potential pitfalls of licensing. “Licensed products can engage customers immediately and experience sell through quickly, as opposed to non-licensed product, where there is often a time period of education on the style before one sees a high level of sales.”
Tips From the Trade
If you find an artist that is well known to your locality, or whose subject matter will appeal to your clientele, it may be a good fit for your venue. “I have been fascinated by how certain designs sell well in pockets of North America,” pointed out Severs. “For example, our product featuring the artwork of Darrell Bush. Darrell paints in Minnesota, and his lake lifestyle images really translate to Canada, especially in Cottage Country (aka ‘Up North’), as well as the northern California/Lake Tahoe area, and to ‘snowbirds’ from across Canada and the northern States who fly south to Florida each winter. I am amazed that the images translate so well to so many people in so many places!”
Pine Ridge Art will make custom point-of-purchase signs to tell more about the artist, their work and how it relates to the local geography and culture. “This really helps sell the product as it allows for a feeling of connection between the artist and the purchaser,” she finished.
“The best advice when bringing in a licensed line is not to ‘cherry pick’ the products,” recommended Upchurch. “Make a statement with best sellers. If you do well with note pads, bring in the top 10 designs in note pads – rather than one note pad, one beverage napkin, one coffee mug and so on. Start with a category that you do well with and try a variety of SKUs in that category.
Then as your following for the ‘look’ expands, you can add other product categories. Your customers will add to their collection since they are already familiar with the humor or artwork of the artist.”
Don’t assume a given name is well known, underlined Bleu. “Designers I’ve thought of as household names are NOT known to many consumers. There needs to be a marketing and education element to all licensing efforts. Don’t assume the name will take care of the sale, be prepared to market and make the most of the opportunity.”
At the core of the category’s strength is the idea that it originated in an artist’s hand, concluded Severs. “I feel great about what we do because our products support artists and allow them to do what they love. In a world that seems ever-more obsessed with careers in finance or business, I’m glad to be part of an industry that supports the artists who work so hard to capture our universal feelings and experiences.”
Photo: The art of Erin Smith comes off the canvas and onto product from Inviting Company.