Is Licensing commoditizing design?
Dom Gregory is concerned that retail buyers are mitigating risk by asking for more choice and bespoke solutions. There’s little evidence that offering more choice or bespoke solutions to consumers encourages them to buy more… it simply serves to help retailers feel safer when making decisions.
When I talk to designers working in product development and licensing, they report that they are reviewing or developing more products concepts than ever before. This in turn leads them to consistently require new proprietary assets.
The increase in products developed by licensees is often viewed as an indicator of confidence, but it turns out this may not always be the case.
Product and graphic designers who develop style guide assets or product concepts are increasingly servicing a volume business where every retailer/country/partner wants a creative point of difference. Differentiation, when applied to a product format or SKU, offers a greater choice to retailers and consumers.
Creatively, differentiation usually falls to product developers and designers to execute. This might mean a simple colour and artwork switch or a complete ground up product redesign in the same category. This is where retailers can take advantage of licenses in in turn licensors. It usually starts with: “I want something different to everyone else”.
Would the real brand please stand up?
The most common expression of any brand in licensing is through use of proprietary design or artwork, so the most common way to differentiate a product is to create a bespoke brand experience by differentiating design.
In some cases, such as apparel, this can mean if 40 products are designed, only one makes it to market. In other categories where prices points are low and volumes need to be high, a large catalogue of designs and concepts are created to service a handful of final products.
This cannot be good business for brand owners who have to budget to create more proprietary assets and artwork to service this design-hungry methodology. Nor can it be good for brand consistency, if the brand is often being diluted into different executions.
I believe we need to consider that too much choice means less informed decisions are made by retail buyers.
If you have time, watch this TED talk on the Paradox of choice from Barry Schwartz. In summary he concludes an explosion of choice only serves to escalate expectations beyond what is realistic and achievable.
The waste in wanting more
Because of the high volume of choice required just to differentiate products to retail buyers, there is an awful lot of design wastage going on in Licensing.
The 80/20 rule tends to apply in licensing: meaning only around 20% of all products developed will make it to market out of all products developed.
Of this 20 % that make it to market, 80% of all the revenue will come from only 20% of the product. That’s a disproportionate development overhead before any products have even made it to market.
This implies that at least 80% of creative work may go to waste.
Perhaps a rethink is in order by the brand or media owners to explore consumer perceptions around licensed products and experiences. Explore insights around what do consumers think when they are buying a licensed product? What is considered a good representation of the brand? Do consumers really want more choice?
What can be done to support retailers?
So is there a clear opportunity to create less, waste less and be more persistent and consistent with what we do create?
In short yes, but brand owners need to provide insight and education to their partners on how and why consumers relate to their brands.
For example: A point of difference is frequently requested by a retail buyer but not an end consumer. However sales of products usually validate that the consumer will prefer products that are closer to the ‘core’ of the brand, with fewer points of differentiation.
The risk here is each different iteration of a brand potentially makes your brand start to appear inconsistent or diluted.
From a retail side: POS and SKU data is in short supply and would provide designers with more substantial evidence of what sells. This too would reduce high volumes of design waste.
The industry is observing how consumers decision making relies on reviews, ‘best seller’ and ‘related product’ carousels on shopper sites like Amazon. The process of reducing alternatives makes choosing easier for consumers and will encourage more intuitive multi buys at the point of purchase.
Buyers continue to demand more ideas from designers to mitigate failure and ensure they have ‘seen everything, missed nothing’ believing they are making less risky choices. In my opinion that’s uneconomical and degrades design to a commodity to reduce individual risk. It also induces paralysis when it comes to making decisions on final range planning.
I believe that brand owners need to shift the burden of choice back to themsleves. They need to stand behind their brands and product designs by utilising insight and consumer engagement to connect with retailers.
In support of retail I don’t know many brand owners who are helping retailers to really innovate using shopper insights.
Perhaps theres opportunity to explore a ‘Kickstarter’ model for brand owners to demonstrate to buyers what works for brand audiences. Or using platforms like Facebook Fan pages to engage with fans and test products at design inception. More brands are benefiting from fan engagement within brand communities so I believe it’s time for brand owners to move the retailers closer to their audience and consumers.
The dynamic and productive work of sales, design and retail teams to get products to market is sometimes luck more than planning. However, with a little more insight and innovation there could be a considerably more efficient business model which would be great news for designers who can feel their work is with turn it out churn out to burn out.
Dom Gregory has worked with a catalogue of award-winning brands and family content both client and agency side. He has a 15 year track record of developing creative, strategic and commercial brand extensions for content creators, entertainment brands and global media owners.
His two favourite superheroes are growing up too fast at home.
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