Coming off a year in which they were forced to adapt to a cascade of unforeseen changes brought on by the global pandemic, licensing professionals will continue to shift more of their business online. The effects of the ongoing growth of eCommerce will be reflected in how they structure their organizations, how they market, and the partners with whom they choose to align.

Big Jumps Expected
Brand owners, manufacturers, agents and others from around the world who responded to Licensing International’s annual end-of-year flash survey say they expect the percentage of business they do via eCommerce will increase in the year ahead, growing on average to 36.9% of their sales from 30.5% in 2020. (All responses to the survey were anonymous.)

Last year’s jolt to the business ecosystem has caused some companies to redefine their operating philosophies. Several companies say they’re now, in the words of one UK licensee, “trying to set up [our own] transactional retail and wholesale websites.” A licensee in Mexico says it’s now “shifting [ecommerce] from being a channel of distribution to being a business model.”

In some cases, it’s about investing in new platform technology to support a consumer-facing business. In others, it’s about efforts to “make sure product is presented to the consumer in a more attractive way” while also stepping up online marketing and advertising strategies.

But it may not be a clear path for some manufacturers. One Brazilian licensee says it will be doing “nothing different” because “my [retail] clients don’t accept me being their competitors.”

Third Party Merchants
Others in the licensing space, whether licensees, brand owners or agents, are trying to step up their online business with existing retailers, in some cases starting from square one. One UK manufacturer says it’s “educating a number of traditional brick-and-mortar retailers to the advantages of working online, and also the Print-on-Demand model.”

Some are farther along on the journey. A UK-based agency says it’s “building relationships with eCommerce-only retailers, which we’ve never really done before.”

A Japanese agency is typical of several brand owners and agents that say they’ll factor in manufacturers’ customer relationships as they evaluate potential partners on behalf of their clients, “focusing on licensees who have a significant share of their sales online.”

For many, it’s a juggling act, managing online sales as a channel among many others, with a variety of strategies and tactics, such as channel exclusives and proprietary designs.