April 6, 2018
Industry experts discuss some of the key factors potential home licensees should consider before partnering with a designer or style icon.
More recently, we've seen design and style icons such as domestic diva Martha Stewart, celebrity designer Chris Madden, industrial designer Karim Rashid, and event planner David Tutera enter the home licensing arena, bringing their distinctive styles to furniture, home accessories, and beyond.
These celebrities and design icons mark a significant shift from the celebrity licensors who were busy signing deals several years ago. There seems to be a greater emphasis on collections that have design credibility. "The high-end consumer has become more savvy and still needs her purchasing decision validated, but it must be with a proven designer," says Kerry S. Glasser, founderof Concept Marketing Group, a full-service licensing and marketing agency based in New York. He believes that this is more evident at the higher end, but is trickling down to stores such as JCPenney. Just look at the success of the Chris Madden program, which shows that a less than well-known name can become successful.
"I believe the shift is away from 'any famous person' to names that work," says Bob Skotnicki, CEO of Global Licensing. "For a name to work, there has to be a logical connection to the product and a logical reason for the consumer to immediately recognize the intrinsic value. If a salesperson has to explain the connection and who the person is, then the transferable brand attributes aren't working." This happens to be especially true in what Skotnicki describes as "today's self-help retail environment."
Manufacturers that are considering taking on a design icon's license should be mindful of several factors prior to signing an agreement. First, they should consider the brand's potential life cycle since it takes a considerable amount of time to develop product and then bring it to market, and then to retail. "Licensees should also seek out design personalities who have a proven track record," advises Skotnicki. "A 'one-season wonder' may be yesterday's news before the product even hits the market." Credibility from a design perspective is also a key factor.
Several years ago, Skotnicki says both licensees and licensors were eager to get into the licensing game, but they may not have necessarily had a solid understanding of the industry. "I'm not even sure some of them knew what their goals were," he says. As a result, manufacturers are smarter and more careful now. "They tend to look for licenses that deliver tangible benefits—whether it's design input, a built-in consumer base, or measurable exposure."
Skotnicki believes in recent years the process of choosing a licensor has spiraled out of order and selections were made based on the wrong criteria, which led to lost opportunity for the licensee, licensor, and the retailer. He says manufacturers should have a definitive plan. They should know what they hope to accomplish with a particular license, and they should also know which categories the license will be applied to, and to what consumer segments or channels they are marketing.
Does a style icon's name truly lure consumers or is a well-designed collection priced accordingly enough to close a sale? "Strong product design coupled with a highly regarded brand—designer or celebrity—will make a difference in the consumer's mind," believes Glasser. Skotnicki thinks today's consumer is certainly more aware of "name" products, but perhaps a little more cautious, too. In today's competitive market and tough economic times, it's more critical than ever for the product and the price point to be right. "The name helps if there are transferable attributes and qualities that quickly and automatically connect with the consumer," says Skotnicki.
Like any other launch, some celebrity/designer programs have performed well while others have not. Glasser, who had a key role in the development of The Hermitage and Althorp/Earl Spencer (Princess Diana's family estate) licensed collections at Theodore Alexander, explains that it's no different than a manufacturer's in-house collections, which may succeed or may fail. Successful licensed programs include Nautica, Jessica McClintock, Althorp, and Oscar de la Renta, but Glasser notes that Bill Blass was ahead of its time, and the Elvis Presley program failed in the first year.
Skotnicki also comments on some of the licensing launches of the past. "I think some programs died a natural death due to sales that never took off through product or pricing that wasn't right, or no connection or perceived value with the consumer. In some cases, the designer fell from public sight and awareness, and in other cases, they found out it wasn't a get-rich-quick road and they weren't prepared to put in the work required for personal appearances."
What also led to some of the downfalls were manufacturers that struggled and weren't able to devote the proper resources to developing their programs. "In some cases, manufacturers didn't envision the collection as a long-term program, but used it for a 'collection' or 'style' and then went on to the next hot property," says Skotnicki. "Often, there wasn't a clear plan as to why and how the licensee was going to utilize the license and subsequently, whom they should license, and what factors should be considered regarding candidates, product, price, and distribution."
Another challenge Glasser points to is that, in some instances, the celebrity wants to go beyond simply lending their name and wants to provide design input, which might become a distraction from creating a viable and saleable program. The other challenge has to do with the retailer. "Brands are very efficient at differentiating product on the retail floor—if the retailer leverages the brand by actually using signage. Most are reluctant to clutter their floor with brand exposure, which is very unfortunate," says Glasser.
There also happens to be a shortage of viable designers who are well known throughout the country. "They have to be known in Kansas—not just New York and California," says Skotnicki, who advises licensees to sign on those who have a proven track record for branching outside of their sphere of influence or their primary product category.
"Licensees should also look for licensors that can build on their following," advises Skotnicki, who feels that there are a lot of up-and-coming designers or "short-timers" who hope the licensee can bring them celebrity status. "The real icons are either already taken, have had a negative experience with the wrong program, or are simply not interested in home furnishings. There are a few exceptions, but I have more potential licensees looking for a name/brand than there are viable licensors."
Skotnicki believes brands rather than celebrities will drive future home programs. Typically, they have a longer life than celebrity names do. "This may be a little less exciting at launch time because there is no famous personality to appear at market or store openings, but in the long run, the licensee can build equity and establish a real foundation with a brand that has been and will be around for decades," explains Skotnicki. "Brands understand licensing as a business and keep egos and personalities out of the decision-making process regarding product development, marketing, and distribution." Brands also tend to have a broader application across product categories and/or style categories. "This isn't always necessarily true, but on average it is," he says. "Brands also tend to bring more tangible benefits to the licensing equation, such as a database, mailing lists, marketing tools, and support for the brand."
In the future, Glasser expects to see more direct-to-retail programs for retailers, and also for manufacturers who own their own real estate. "Controlling the selling space by showcasing a broad array of the collection is a major advantage over programs where the retailer shows only items," says Glasser, who believes there is room for growth for design icons such as style icon Colin Cowie. "If the economy doesn't get in the way and if the manufacturer/retailer doesn't get scared, the consumer will have access to a constant flow of cutting edge design and product," he concludes.
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