Properties yield profits

At a time when shelf space is a truly precious commodity, some retailers may ponder whether or not licensed product is the way to go. LIMA's president Charles Riotto talks to PLAYTHINGS about how investing in licensed toys and other goods can pay off—as long as careful attention is paid to selection and merchandising.

What do retailers need to take into consideration when evaluating whether or not to stock licensed products?

I think one of the most important things for a retailer to consider is does this product support the kind of program I have developed in my store? Is the quality of the product in line with what my store typically stocks, is the manufacturer reliable and is the product age-appropriate and price-appropriate for my demographic targets?

Choose a property that lets you stay true to your customer base and the reputation you've earned in the community. Doing so will help insure that adding a licensed property to your store's shelves will be a nice formula for success.

What types of licensed products, beyond toys, can retailers look to inventory?

The most obvious products a retailer should look to carry, aside from toys, are books and videos; they are a natural complement to any toy-based character licensing program. Beyond those specific categories, look for products that create synergy with the offerings already in the store.

Licensed toys have tremendous sell-through power at retail, but a little caution in deciding upon product mix is prudent. For example, you might not want to start selling bicycles simply because they are licensed with one of the "hot" properties; this type of item might not be appropriate for your store. Instead, it might be more appropriate to stock kites or skateboards that feature the same property. Ideally, these items will sell well, but not take up as much space as the bicycles would have in your stock room or on your sales floor.

How can independent retailers differentiate themselves from the mass merchants when merchandising multiple licensed products?

The independent retailer is at a distinct advantage over the mass market in this respect. The level of service and depth of knowledge of a property that a consumer can experience at a specialty store should far surpass anything comparable in the mass market.

In addition, independent retailers can take advantage of "boutiquing." Grouping products by brand instead of by product type leads to a higher likelihood of increased incremental sales, because you are cross-selling the brand.

How can manufacturers and licensors help the independents market/merchandise licensed products? And how can retailers avoid overwhelming their customers with product?

One of the most innovative ways they can help is with creative and engaging in-store promotions and activities. A number of licensors and manufacturers have teamed up to create in-store playday kits that stores can use any time to turn their venue into a destination for caregivers and children. This specialized activity focuses on one license for one day. In this way, one message is communicated and consumers are not bombarded.