Keynote Panelists: Time Is Of The Essence
(This article originally appeared in the July issue of LIMA’s Bottom Line)
“There are so many properties out there nowadays, and we want to have what the customer is looking for in the stores,” said Andy Prince, Walmart Senior Category Director for Toys. “But it requires you to work very quickly, not only from the retailer’s standpoint, but from the licensor’s standpoint, from the manufacturer’s standpoint, because properties are coming and going so quickly…. The customer is so fickle, and we just have to figure out how to move quicker in the environment.”
Prince’s reference to the need for speed in the marketplace crystalized a recurring theme of the Executive keynote Panel at last month’s Licensing Expo 2013. Prince was joined on the panel by Brad Globe, President of Warner Bros. Consumer Products; Josh Silverman, Executive VP of Global Licensing at Disney Consumer Products; and Henry Stupp, CEO of Cherokee Inc. for a freewheeling discussion on topics ranging from the opportunities and challenges offered by social media and the digital world to supply chain issues.
Stupp called a supplier’s ability to get goods to market quickly “more critical now than ever before,” and said that there’s been a noticeable move in the apparel business to bringing production closer to home, offering the example of denim. In that category, he said, “right now we have to place our denim business 8-9 months in advance when we’re doing it in China or Bangladesh or India [but] we’re seeing a trend now where we can move it to Mexico. The [initial] margin for the retailer would be less. However, they’d have less exposure on the inventory for less markdowns. So we could bring it closer, they could make the same money, we could have tighter delivery timeframes, arguably more control because it’s right in our backyard.”
Silverman approached the issue of speed from a different perspective, addressing how for certain Disney animated TV properties, the timespan between first episode and product on shelf has been “dialed back on a strategic level, so we’re coming out with product [in] six months, maybe sometimes day and date with the show. And that’s important. You want to catch it when it’s hot. It’s placing a bet on properties that you believe in, and it’s clearly paid off for us with Disney Junior.
“You want to get the product in market quickly,” he said, but “you want to do it in a right-sized approach. SKU proliferation, SKU productivity is something we’re watching very carefully. We want to ensure that we’re communicating with our partners, our retailers and licensees, so that no matter how fast it is, that it sells through.”
Prince also made the connection between rapid property turnover and sell-through. “I’m sure there will be another Angry Birds. It’s a phenomenon, but there will be another one. So the kids are getting engaged, and then they’re moving on to something else. It’s really tough to monitor, [and the challenge is] how deep do you get into a property before the kids lose interest, and then we have all the inventory?”
The speed with which properties enter and exit the marketplace factored into Globe’s discussion of dealing with and leveraging the digital world. “I’m very excited about the digital landscape. But the challenge [to] break through all of that clutter and rise to the level where we can have a conversation with Andy and his colleagues and be able to deliver programs that he can count on, that are going to be here in six months or a year.” In order for most digital properties to have that kind of longevity, he continued, “it needs to go into the more traditional media of television and movies if it’s going to sustain itself.”
By the same token, though, the Internet offers a robust mechanism for extending and enhancing traditional theatrical and TV properties that the consumer products community needs to leverage. The licensing community needs the big TV shows and theatrical events that build excitement for a property, Globe said, but it also needs to “supplement all of the things our studio is doing…. [We] need to be able to work with our partners and do other things to fill in in between movies and reach consumers through the ways that they are now interacting with entertainment. I’m looking forward to the new creative challenge, my colleagues are looking forward to it, our partners are excited by it. And it gives us more control, as opposed to… [just] waiting for the movie.”
(Pantomiming a harried executive grimacing into his phone, he said with mock exasperation: “When’s the movie coming? It‘s got to be in June, otherwise I’m not sure I know what I’m going to be doing next year!” Silverman laughingly joined in with his own panicked question into an imaginary phone: “What do you mean you changed the title?!!!”)
But the executives also acknowledged that they no longer have total control over the marketing message. Stupp referenced “this whole social environment where consumers are now talking to each other. It’s no longer, ‘I’m the studio, I’m the big fashion company, and I’m telling you what to buy or what to wear.’ Or ‘I’m the retailer, and if I’m carrying it, it must be important.’ Now you’ve got this whole new dynamic where the consumers are saying amongst themselves, ‘This is important. Look at it.’
“They’re doing YouTube videos playing with their light sabres, their Angry Birds, wearing our summer dresses. They put them on, saying, ‘I bought this for $15 from Target, I love it,’ and the next thing I know there’s a run on a dress. And that has nothing to do with what Target’s doing, and certainly not with what we’re doing. The consumers have taken it upon themselves, and they’ve created their own loop, and that’s really impacting what breaks through.”