An Instant Connection
Licensed products offer pet retailers an opportunity to tap into the resonance that certain characters and brands have with shoppers.
What do Captain America and Lamb Chop have in common with the NCAA and Burt’s Bees? They are all representative of the wide range of intellectual properties that are fueling an incredible and successful influx of licensed products into the pet industry.
There is little doubt that licensed products can mean big business in just about any retail segment. In fact, according to the International Licensing Industry Merchandisers’ Association (LIMA), products sporting trademarked characters, corporate and brand logos, pro sports team monikers, and the like, accounted for more than $240 billion in retail sales globally in 2014. With numbers like these, of course pet product manufacturers and retailers have enthusiastically gotten on board.
The allure that licensed products have for marketers is quite easy to understand. “A good license comes with brand recognition, a fan base that is predisposed to products that carry that license,” says Chris Wilson, executive vice president of marketing and product development for Petmate.
The Arlington, Texas-based company’s licensed lines, which include MuttNation Fueled by Miranda Lambert and the WWE Pet Collection, illustrate the type of built-in customer base that can come along with the right brand. “Miranda Lambert has a large and very passionate fan base,” says Wilson. “Miranda was personally involved in the creation of this product line and she is, and will be, a large driver behind its success. And when Miranda speaks—through her social channels, in interviews, on tour, etc.—her fans listen.
“WWE has a massive and rabid fan base. These fans follow the story lines, the events and the superstars. A WWE fan is all in. Compared to a traditional sports license, where teams have regional appeal, the WWE superstars have a worldwide following.”
While the particular factors that attract consumers may vary based on the brand, character and product in question, matching the right license with the right merchandise will almost always create the same result—register rings. However, in order to truly be successful across the broad spectrum of product categories and licenses available to pet retailers today, an understanding of what is driving consumers’ purchasing decisions in each case is vital. So is having the right merchandising and marketing strategies in place.
Step one is to acknowledge that, for the most part, licenses fall into two distinct categories—those that convey a sense of quality and reliability, and those that appeal to consumers’ fandom.
On one side, there are what some experts refer to as “authoritative” licenses. These are brands that consumers associate with qualities such as safety, effectiveness and/or expertise, and those associations are used to convey certain attractive characteristics in pet products. Here, pet companies are leveraging brand loyalty and the pet humanization trend to capture the sale.
“From the consumer perspective, a brand name can guide them into making a purchasing decision,” says Steven Shweky, president and CEO of New York-based Fetch…for Pets! “If someone has used a brand in human [products], it’s possible they’re more likely to trust the brand across other product categories. We find that consumers enjoy using the same branded products for their pets as they do for themselves.”
Fetch…for Pets! has been an industry leader in bringing authoritative brands from the world of human products to pet stores. The company’s portfolio of products features such recognizable brands as Arm & Hammer, Bio-Silk and Shout. Among the company’s most successful licenses has been Burt’s Bees Natural Pet Care, and for good reason.
“The brand is well known in the human space; it’s on trend with natural ingredients and it’s a high-quality product that carries out the high values of the brand,” says Shweky.
Two of the company’s newest licenses are Fresh Step and Glad, which Shweky describes as “brands that have been around for a long time and already have a consumer base.”
“We’re doing litter box accessories under Fresh Step and waste management products such as poop bags under Glad,” he explains. “Not only are these natural product extensions that make sense under the brand but we’ve included new, problem-solving innovations to give consumers a greater reason to purchase.”
On the flip side of the coin are licensed properties that offer a sense of fun and are whimsical—for example, a popular cartoon character, superhero or sports team. While these licensed properties may seem to lack the gravitas of authoritative brands, categorizing them as novelties would be seriously selling them short, as their impact on consumers can be resounding.
“These [licenses] tap into an emotional response with the consumer,” says Eric Swope, COO of Farmingdale, N.Y.-based Buckle Down, which produces a wide range of high-quality dog collars and leashes under licenses from such popular brands as Disney, Nickelodeon, Hasbro, Hanna Barbera, Looney Tunes and more. “They bring up past times and personal connections, and that increases the likelihood that someone will buy a product.”
Licenses that evoke good feelings from yesteryear have become something of a specialty for Multipet International, the Moonachie, N.J.-based manufacturer of plush pet toys. The company’s portfolio includes an assortment of popular characters such as Lamb Chop, Garfield, Woody Woodpecker, Mr. Bill, Gumby and Pokey, and Mr. Bubble. “We do a lot of nostalgic licensed items,” says executive vice president Leslie Yellin, noting that while these properties often evoke feelings from a bygone era, they also connect with younger shoppers. “They are very much recognized [by younger generations], especially by women."
In fact, Yellin says that Multipet’s licensed products are perennially among the top selling pet toys on the market, due not only to broad recognition among consumers, but also the humorous touches that the company adds. For example, its Mr. Bill dog toy says the character’s famous phrase, “Ohhh Nooo!”
Much like it does in the world of the authoritative licenses, the trend toward viewing pets as members of the family plays a large role in driving consumer interest in character-driven pet products.
“The rapid spread of pet humanization has made licensed products a particularly attractive opportunity for the pet industry now more than ever before,” says Ben Dadbin, COO of Commerce, Calif.-based Sentiments, Inc. “As pet parents humanize their pets, they naturally want the same things for their pets that they want for themselves. We see this trend occurring already with pet food (raw, organic, high-quality) and pet clothing (trendy, stylish, fashion forward), among other pet categories.”
Sentiments recently introduced a line of Disney-inspired pet beds and feeding accessories for dogs and cats, and the company is currently developing a line of toys as well. They are all products that Dadbin says are sure to resonate with a wide range of pet owners.
“There is no better licensor to work with than Disney, especially when it comes to character and film licensed product.,” he notes. “What is particularly unique about Disney is that it continues to impact one generation to the next. Disney fans range from children to adults. You can’t be too young or too old to be a Disney fan.”
Of course, not every license will fit neatly into the authoritative or “fun” category. Take the NERF Dog brand from Gramercy Products, for example. This licensed line effectively straddles both categories, to great effect.
“NERF products are all about fun, action and safety,” says Kelly Prieto, marketing coordinator for Gramercy Products. “We wanted to incorporate those themes into the line of NERF Dog Toys, by making a family-friendly product line designed to encourage interaction and active play for children and their pets. We work very closely with Hasbro on all of the design and development of our products to ensure consumers receive high-quality products from the NERF brand they know and trust. NERF, being a lifestyle brand, is a very unique value proposition to the customer versus a traditional, character-driven licensed pet toy.”
Whether it is selected for fun, function or both, there is one consistent benefit across just about every license out there, says Swope. “One of the beautiful things about licensed products is that you are able to use other people’s marketing money to help you make money,” he explains. “As a retailer, by selling a licensed brand, you’re tapping into the millions of dollars of marketing that is going toward that brand, and you don’t have to pay a penny for it.”
Making the Right Choice
While manufacturers typically select product licenses for their broad appeal, the fact is that not every licensed property will be a great fit for every pet store. With this in mind, retailers should carefully consider the potential that a particular license, and the product it is applied to, has with their unique customer base.
“If you remember your core demographics, you’re going to do okay,” says Yellin, noting that the typical pet store shopper is female. “She’s often going to make an emotional decision, and nostalgia licenses, for example, make for feel-good toys.”
While paying attention to a store’s shopper demographics is important, part of the value that licensed products bring is their potential to expand a retailer’s reach. “The power of our brands is that they not only appeal to the retailers’ existing customer base, they also bring in a new demographic,” Wilson says. “The license has to bring something special to the product line and, most importantly, be relevant to the end consumer. Said another way, we believe a license works best in this business when it is an organic fit.”
The subject of relevance is an important one in licensing. Retailers must be able to figure out whether a popular property is simply a fad that will be gone as quickly as it arrived or if it has staying power.
“Just because a new children’s movie came out and everyone seems to love it, that doesn’t mean it’s going to translate over the to pet category,” says Yellin. “It may have an immediate appeal, but you have to be wary of how long the lifespan of that [license] is going to be. Will it be quickly forgotten? If so, what are you going to do with the excess inventory you’re stuck with? The key with any license product is to test the waters and manage your inventory.”
An excellent way to evaluate the potential that a particular license holds for pet stores is by looking at what Swope describes as the “market cap” of a particular property. “How big is the valuation of the company? If you look at Warner Brothers or Marvel, for example, they’re worth billions of dollars,” he says, noting that the appeal of these franchises is massive. Why else would Disney pay approximately $4 billion for the company that created such popular characters as Captain America and Iron Man?
Disney and its character portfolio, which includes Marvel and Star Wars, are a powerful force in the world of licensing. “Disney is the No. 1 licensor in the world, with over $52 billion in retail sales; that’s nearly the size of the entire pet industry ($62 billion),” Dadbin says.
However, Dadbin is quick to note that being connected to a particular character or brand is one part of a winning formula that contributes to the success of a product. “Developing a compelling licensed product line is more than simply applying a graphic of a character onto the product and expecting the product to sell,” he explains. “Pet parents still care about quality and functionality. And studies show that pet owners are increasingly favoring products that blend with their lifestyle. We have developed a line of Disney-inspired products that are stylish, innovative, and functional.”
Even if a pet retailer identifies the perfect licensed products for their stores, it will all be for naught if customers are not clued in on the fact that these items are available. So, it is imperative to implement the right merchandising strategy.
To make a strong merchandising statement, Swope suggests that pet stores assemble enough of a selection to “tell a story” with the licensed products they bring in, with a focus on offering a breadth of items while keeping the depth of each style low—an approach that he says will work if retailers utilize the right vendor partners. For example, Buckle Down offers very low minimum orders and can ship product within a week. “That allows retailers to test and repeat,” he says.
Another important element to look for in vendors offering licensed products is the availability of display materials that will make it easier to promote these products in the store. “A good license has excellent collateral material, imagery, etc., that can be used to create in-store displays, signage and more,” says Wilson. “We use these to draw a consumer into a product offering, differentiate from all the other possible product choices and deliver a message that is meaningful and relevant to the consumer.”
Multipet is another company that is always ready and willing to help retailers make a splash with licensed products, whether it’s with display materials or with the right breadth of selection to make an impact in the aisles. “Fortunately, because we have such a breadth of licensed characters, retailers can do endcaps with our toys, and we have custom displays that call out the features of the toys,” says Yellin.
Of course, promoting a pet retailer’s winning lineup of licensed products can, and should, extend beyond the four walls of the store, and the Internet is proving to be an invaluable resource in this regard. “Social media is very powerful, as we all know,” says Prieto. “Engaging customers to interact with the brands they carry online is critical in today’s digital age to build awareness and brand.”
Given NERF Dog’s unique position among the various product licenses in the pet industry, Prieto does have one in-store suggestion that is certain to not only promote the popular dog toy brand, but also foster a sense of fun and community. “We would suggest retailers encourage product testing in stores with their consumers, especially products like our tennis ball blasters and launching toys,” she says. “You could have interactive tossing games for customers to play with and see how the products function.”
At the end of the day, industry experts agree that the potential for licensed products in the pet industry is unlimited, as evidenced by the rising prominence of these items over the past decade. In fact, many describe the trend as one that is still in its infancy in the pet world.
However, in order to take full advantage of this rising tide, retailers must look beyond the popular characters and brands being applied to make sure that these products live up to the standard of the rest of the store’s selection. “Licensing is another tool for retailers, it’s not the only tool,” says Swope.