‘Don’t it always seem to go, that you don’t know what you’ve got till it’s gone.’
While Joni Mitchell may have been going on about preserving the environment, she could very well have been musing issues surrounding licensed toy ranges.
As toy shops have discovered in recent years, it’s only when the merchandise dries up that firms begin to realise they have a blockbuster licence on their hands.
Last year saw retailers cry ‘where’s our Minion merchandise?’ thanks to limited product and not enough stock, all while Despicable Me 2 was conquering the big screen becoming the UK’s biggest box office hit of 2013.
But could retail have clocked the vast potential of the Minions sooner? And if so, how?
“When I’m looking at a licence, there’s a few things I’m looking at,” Stuart Grant, buying director at The Entertainer, tells ToyNews.
“One is the success of the brand, because toys don’t generally launch before or at the same time as programming. The shows tend to launch earlier. It gives us the ability of hindsight. I look at the ratings, whether the toys are any good and are the price points correct for that category.
“You can also get a better feel for how successful a brand is going to be by seeing who is handling the property and driving the demand. The more people that watch your show, the more shelves your product will be on and the more product you’ll sell. It’s the way of the world.”
Kelvyn Gardner, managing director at LIMA UK, believes that even with established film properties or impressive viewing figures, there is never any guarantee of successs when it comes to licensing.
“It’s one of the challenges, and charms, of licensing that nothing is certain,” says Gardner.
“Where there is a history of success (like movie prequels and sequels) you can make a more informed judgment, but you still can’t be sure. TV shows old and new, from Grange Hill and Blue Peter to Hollyoaks, are examples where big audiences delivered no more than a few closely-linked licences (usually publishing in various formats).
“With movies these days, not even ‘tentpole’ releases are given more than a week or so to seize audience loyalty before the next big film follows. The risk is incredibly high for licensees and retailers, which mitigates against success.”
Mike Stagg, general manager, retail for The Walt Disney Company UK & Ireland, believes the box office is a good barometer for licensing success, but stresses this is far from a necessity.
“There is a correlation between box office success and retail sales for a property, however if a merchandise range is innovative and taps into key play patterns for example, it can go from strength to strength without box office support,” Stagg tells ToyNews.
“Take Disney/Pixar’s Cars for example, there were five years between the first film launching in 2006 and the second in 2011, and yet during this time it grew significantly and remained as one of the top kids licences.”
But what about unproven properties? Is it viable for retailers to get behind a totally new brand or are the risks too great?
The Entertainer’s Grant claims: “It is possible for a retailer to make a call on whether a brand is going to work that may be completely contrary to the call that the rest of the market is making on the back of a gut feeling towards the brand, the brand owners and the master toy partner.
“Those decisions are generally called more accurately by toy specialists because they have buyers that have been in the industry for years.
“Guardians of the Galaxy was a completely unknown property from Marvel. Off the back of cautiousness from retailers who didn’t know if it was too geeky, too adult or if it would appeal to kids, Hasbro called its number on Guardians very light.
“We, as a retailer, took the stance that we believed it would work and we put some relatively large commitments down on paper. The problem is that when something hits the shelves and outperforms expectations, the manufacturer has to be fair to all its retailers. So, if you’ve put your numbers down early, you’ll probably get more than your fair share but it doesn’t mean you’ll get 100 per cent of what you initially put down months and months ago because they have to be fair to the whole market.”
LIMA’s Gardner is also passionate about the risks around unproven properties and believes it’s absolutely essential that all corners of the licensing industry get behind fresh brands.
“Licensor, licensee, retailer, consumer, we all love ‘something new’, so we all of us need to back new properties,” adds Gardner.
“The key is to keep initial commitments at an affordable level. That means modest initial retail sell-in, with flexibility to restock fast if demand arises.
“Licensors need to bear this in mind in moderating guarantees to allow licensee/retailer support without onerous financial burdens.”
Peter Fuller, European marketing manager at Mega Brands, has launched product ranges based on licences including Call of Duty, SpongeBob SquarePants, Halo and Assassin’s Creed.
He agrees that pinpointing the future success of any licence is a tricky business, but believes you can boost the chance of success by choosing properties that boast a large pre-existing fan base.
“It is very difficult to predict the popularity of any new licensed product,” Fuller tells ToyNews.
“It’s vital to have a strong product portfolio as well as a robust marketing plan that includes a clearly targeted communications strategy whether it be a licenced product or not. One of the main advantages of launching a licensed product rather than a brand new product is the ability to leverage its already established awareness levels generated by the TV programme or video game as it has already launched into the market and begun to gather fans.”
In 2014, toy retailers have felt the squeeze when it comes to Disney’s Frozen, the prime example of how difficult it is to predict a hit property.
So did Disney, or retail, ever really expect Frozen to go on to become the highest-grossing animation in history and a massive player in the world of toys?
“The success of Frozen is truly unprecedented,” admits Disney’s Stagg.
“Last year our licensed range was relatively small, however due to the phenomenal demand there is now a much broader range available which contains really exciting and innovative product.”
Grant adds: “It wasn’t really on anyone’s radar, it was a late December launch, which doesn’t usually sell toys. It was an unknown property and it has gone absolutely berserk. In those cases, it’s very hard to guess because no one predicted it.
“Disney didn’t know it would be the biggest animation ever and Mattel didn’t think it could be as strong as a Barbie in its standard princess lines.”
So what’s the next Frozen? From our research, put your money on Paw Patrol.
And if, come next year, we’ve got it wrong, do tell us at BLE 2015. You’ll find us belting out Joni Mitchell at the nearest karaoke bar.