Licensing world

Licensing Trends: Licensing in Retail

Licensing in Toy Retail

Licensed toys lead to sales in toy stores

“Over the years, we have changed our product range by adding other types of toys to the licensed ones which initially made up almost all of our offer. Licensed toys have the advantage of generating traffic, and I am convinced that our store cannot help but promote products such as Superheroes or Lol, Hot Wheels or licensed Rainbow”, explains Andrea Dugoni, owner of L'Aquilone Giocattoli di Modenese. "The best-selling licensed toys were Paw Patrol, Lol, Me vs Te, and Barbie. We continue to carry these toys because we are committed to offering a complete range. However, we reserve a smaller space for them in order to limit the risks that they always bring”, adds Giovanni Orlandi, owner of Orlandi Giocattoli in Formia (LT).

Licensed products face tough price competition

Over the years, the growing amount of licenses has posed shopkeepers with the challenge of choosing which license to bet on, as it is now unthinkable to carry them all. The fragmentation of companies has reduced the number of articles likely to be sold. Sales will depend on a retailer’s ability to stand up to online players and large-scale distribution brands when it comes to pricing. Not to mention the increasingly important safeguard of profitability by offering a diverse product mix that guarantees reasonable margins and minimises the risk of sitting on hard-to-sell stock.

The product range is the key to success

“This Christmas convinced me that the time for courageous choices by retailers and companies has come. Shopkeepers must rethink and enhance opportunities, such as offering a truly diverse product range. However, on the business side, it is necessary to re-evaluate the relationship with the product range. Only then is it convenient to consider a licensed toy. Even if it is true that these items fuel traffic and guarantee a product range that is as complete as possible, the risk remains of finding oneself with unsold goods. Especially because the amount of licensed articles has become very extensive and it continues to become more and more difficult to compete with online channels and, above all, Amazon” explains Marco D'Amadio, Director of Tuttogiochi D'Amadio in Sassari.

Enhancing specialised retailers selling licensed products

Marco D'Amadio continues by stating that manufacturers should avoid selling directly to the final consumer. They rather should be aware of the fact that betting everything on a single giant such as Amazon can prove to be risky. One day, the online seller will use all its power to lower the price, and the next day it might decide to drop the product line altogether. One solution for manufacturers could be to have more specialised professionals in the market. Finally, companies must agree to share the risk of finding themselves with unsold goods with the shopkeeper, coming up with new kinds of cooperation and reshaping conditions, for example that of the minimum order amount.

Info Toy Store

The trade magazine Toy Store is the Licensing media partner of the Spielwarenmesse and expert for the Italian licensing market.

 

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