As a larger portion of retail business goes online, brand owners and licensees are reallocating sales, marketing and support staff and budgets toward supporting ecommerce as part of an omnichannel strategy.

It’s a trend that was well underway pre-pandemic, but one that has accelerated as thousands of retail doors around the world disappear. Companies that previously relied on brick and mortar for up to 80-90% of annual revenue are now targeting ecommerce to account for half their business over the next few years.

“If you asked me five years ago about Walmart.com, I would have said I didn’t deal with it because there isn’t enough quantity,” said Jack Gindi  of licensed footwear supplier Ground Up International  during a webinar during Licensing Week Virtual.  Now Walmart.com is placing much larger orders that are “double the MOQs” (minimum order quantities) and Ground Up is investing in its ecommerce and direct-to-consumer (DTC) businesses, Gindi said.

Revamped strategies
Licensors also have been forced revamp a sales and marketing strategy honed on brick and mortar, but one that needs to bring social commerce, online marketplaces, and their own digital storefronts into the mix. It can be about providing support in the form of digital assets and hot links that instantly direct a fan from content to commerce. The shift in approach can be sudden and far-reaching. For example, an industry executive responding to Licensing International’s Global Licensing Survey noted that while ”big in-store retail entertainment was all the rage” in 2019, “it is being replaced with social media marketing to drive traffic.” 

Digital Skills

And that trend comes as many brand owners, like film studios, need to also add “digital retail teams” for social media and directing web traffic retailer and licensee sites, says Trevco’s Trevor George. “What you are going to see is with studio, pop culture, celebrity and influencer brands, it’s not just about Instagram and making a post, but how do they take the digital environment they have and all the traffic and redeploy it to support licensees and retailers,” George said. “It’s not just supporting product placement at Target anymore. It’s also about supporting a listing on Amazon or directing web traffic to a direct-to-consumer site. And that doesn’t require a salesperson as much as someone who is technical in nature.

Indeed brand owners pre-pandemic were well into increasing resources dedicated to ecommerce and developing their own DTC businesses – an effort that can even be used to help develop brick-and-mortar lines. For example, Discovery used its ecommerce site to venture into women’s apparel – a business it had never before been in — tied to the “Gold Rush” reality series. “We tested it, and now that can turn into potentially a new licensing relationship with a manufacturer that can really blow out that category,” said Discovery’s Matt Bonaccorso. The company also uses data from its online store to support its pitches to physical retail.

But a company has to be methodical in developing that business. “For anyone starting a [DTC] store, it really is crawl, walk, run approach,” Bonaccorso said. “At many large companies, ecommerce is this business on the side. But it needs to be a key component and a key tool for the organization to deliver products directly.”