Looking Forward by Looking Back
This is going to be one of those “looking forward by looking back” columns. It was inspired by a recent piece on Forbes.com, noting that this year marks the 50th anniversary of the creation of four major U.S. retail chains – Wal-mart, Target, Kmart and Kohl’s. (The year 1962 also was notable as the inaugural season of the New York Mets, but I suppose that’s for a different story.)
As the Forbes article points out, Target was launched as a discount store division of Minneapolis-based Dayton’s Department Stores; Kmart sprang from the Detroit-based S.S. Kresge variety store chain, and Kohl’s Department Stores were an offshoot of the Wisconsin supermarket chain, Kohl’s Food Stores. Walmart is the only one of the four to have been created out of whole cloth in the tiny burg of Bentonville, Arkansas — now home to hundreds of Walmart-connected businesses and branch offices.
The fact that it’s worth noting the half century that these companies have been in business – and the number of retail nameplates that have disappeared over those same 50 years – is a reminder that retailing may be the most dynamic business, with entrepreneurs driven to invent and reinvent themselves repeatedly to click with consumers.
Retail companies and store formats arise, thrive, then adapt or disappear. In the ‘70s, catalog showrooms were one of the fastest growing store types in U.S. retailing. Names such as Service Merchandise and Best Products were mainstays on everyone’s top retail lists, with more than 400 locations each in the U.S. Today, Service Merchandise exists only as a website, shepherded by the founding Zimmerman family; Best Products went out of business more than a decade ago. The list of once-stellar retail nameplates that are no longer with us could fill this page and more, encompassing all levels of the business.
These musings have been centered on U.S. retailers, but every developed country and region doubtless has similar examples. But an important point to note is that while some one-time powerhouses disappear, the rate of retail regeneration is at least as striking. The advent of fast fashion chains such as H&M, Zara, Top Shop and Uniqlo speak to the ability of concepts and nameplates to move over borders and across seas. And let’s not forget Amazon, the behemoth of online retailing, which didn’t even exist 20 years ago.
The dynamism and constant reinvention in retail are mirrored by a similar waxing and waning in the licensing business. Brands soar, thrive, adapt, sometimes turn into long-term sellers, sometimes disappear. Characters zoom up and down the licensing charts, often with frightening speed. Others make the transition into everyday sellers, following a trail marked by such names as Peanuts, Sesame Street, Beano, Power Rangers, Hello Kitty, Mickey Mouse, SpongeBob Squarepants, Tintin and too many others to mention.
One of the fascinating aspects of the licensing business is that nobody really knows where the next hit is going to come from. Which fashion brand will truly take hold, and which will peter out after a season or two? Which “can’t miss” film property or television show will indeed make an impact, and which will be done in by variables such as the quality of the content, the competitive landscape, timing issues or even just plain bad luck? Which celebrity brand will suddenly implode when the celebrity suddenly… implodes?
While nobody really knows what’s going to be successful, everyone needs to put themselves in the best possible position to succeed. Keep your ear to the ground to better understand the dynamics of the market you’re trying to reach. Understand how your target audience is consuming content (TV? Websites? Facebook? Twitter? Tumblr?)
And make sure that you use all the professional resources at your disposal. Check out LIMANET, the newly launched “Interactive Opportunity Network.” Take full advantage of the LIMA Webinar program, which offers sessions on a vast array of licensing and marketing topics throughout the year, free to all LIMA members. I hope that while you were at this month’s Licensing International Expo in Las Vegas, you took advantage of the Licensing University seminar sessions.
The more you know, the more you’ll be prepared to identify and take advantage of the opportunities that are out there.