What an Omnichannel World Means for Brand Licensing

Stephen Reily

January 2, 2014

If you want to develop great products that actually sell at retail, you are probably already thinking about how to succeed in an omnichannel world.  Thanks to e-commerce and digital/social media, consumers no longer pay much attention to the boundaries between buying products in stores or online, and marketers who segregate channel strategies will not be winners in the years ahead.  Retailers understand this, but we don’t yet see many people in the world of brand licensing talking about it themselves.

RSR Research, the only research company run by retailers for the retail industry, has been issuing important research reports on best practices in an omnichannel world for several years.  Rereading their 2012 and 2013 reports (which you can download free)  gave me some thoughts on what an omnichannel world means – or should mean – for the companies we work with, and the kinds of partners and best practices that could help them succeed in this omnichannel world. 

The Old (Uni-Channel) World

When I began negotiating and drafting license agreements 15 years ago, both product development and retail distribution were much simpler.  We narrowly defined the product categories that a licensee could manufacture, and even more narrowly defined the channel(s) of distribution where the licensee could sell its product.  Social media didn’t even exist.  E-commerce was just beginning, and our clients all thought it was something they could ignore.

As retailers consolidated, and as consumers moved much of their lives online, it became impossible to succeed with such a narrow focus.  A successful licensing program isn’t just about the brand and licensor; it isn’t even limited to a licensor and its licensees.  In this way, licensing isn’t any different from marketing the consumer products that our companies make themselves.  You have to treat retailers and consumers as partners.

That means working in the omnichannel world where consumers and retailers now live themselves.

The New Omnichannel World

Follow the customer.  Success in an omnichannel world means focusing on more than just a product and how it moves through individual channels.  It means focusing on consumers and their demand to learn about and interact with products in every way possible, including social media and blogs, online reviews and price-comparisons, mobile promotions, and in-store presentations.  The consumers you need to reach shop don’t limit themselves to channel only, and your licensees can’t, either.

Encourage all-channel sales.  An outlook that dates back to the uni-channel world often creates unnecessary competition within one company or brand for salespeople and category managers whose incentives should be aligned.  Product managers need to recognize that consumer interaction with their brands is a good thing wherever it happens, not just in the places where they think it won’t interfere with their own work.  When you look at distribution in this broad context, licensees and other brand partners can be the key to giving consumers what they want, where they want it.

Few companies can satisfy the consumer’s need to find your brand and its equities in every possible place where they learn about products, and shop.   Make sure you are incentivizing your brand managers and salespeople to support these results, and not just in the one category or channel where they may be assigned.  If a licensee can get your brand into direct-marketing channels like HSN or QVC, or if a licensee’s products can give influencers something new to talk about online, they may be doing more to ensure your brand’s survival than you can do yourself.

Delivering success in this new omnichannel world is the reason why our work at IMC now involves retail development and influencer marketing.  As RSR pointed out in the visual above, commerce is intimately related to both community and content, which is why we’ve also been building online communities and content-marketing operations for the last five years.  We just don’t think you can launch great new products without them.

And it’s also the reason we think that brand licensing has entered its own new world:

The Omni-Product Brand. 

The biggest consumer product brands created their initial value with a single product, delivered consistently through a familiar channel, over and over again.

Because retailers and consumers now control a brand as much as brand managers do, and because both retailers and consumers now operate in an omnichannel world, your brand needs to meet their needs in new ways, too.  In many cases, that means delivering more products in more places than you ever imagined.  When you are excited rather than threatened by that prospect, your brand may reach its ultimate potential.  I’ll be writing more about this trend – and the brands that are riding it most successfully – soon.

IMC Licensing Logo Mark

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