Brand Extension
Top 5 Trends in Brand Licensing

Brand licensing has evolved into a high visibility commercial tool for corporate brand owners. There is no greater indicator of this than the Top 150 Licensors study reporting $272 billion in global retail sales of licensed merchandise in 2016.  Brand licensing is growing exponentially. This success brings new twists and turns, making achieving long term success an increasing but worthwhile challenge.  Here are some trends we see happening now in the brand licensing field.


Traditionally, the top global licensing markets are the U.S., Europe and Japan. However, as we’ve seen in recent years, brand licensing has taken off in many emerging markets.  Three of the global marketplaces most often noted as having the greatest growth potential for sales of licensed goods are China, India and South and Central America. To many brand owners, these markets are key for the future of brand licensing, not only because of steadily growing economies, but also the continued increase of brand-conscious consumers having a preference and loyalty to American and European brand names.  To illustrate, last year nearly half of all the licenses signed by LMCA were based outside of North America.


With new products and services hitting the shelves at a rapid pace in today’s market, it is crucial for any brand to highlight its unique selling point and increase lead generation. Co-branding can be an efficient and effective approach to accomplish this idea.  Smart brands are realizing the benefits of strategic co-branding.  Strong partnerships can bring something new to the table for consumers that gives them the incentive to engage with your company.


Brand owners are putting themselves in the driver’s seat and deciding where they want to go.  While this seems logical, it has not always been the primary approach. Earlier programs were often largely opportunistic, driven by answering inquiries from prospective licensees and/or licensing into a narrow range of “merchandise” categories.  More than ever before brand owners are seeing what other companies are doing with licensing and they don’t want to fall behind.  The result has been a more comprehensive, strategic approach to licensing — extensions designed specifically to fit the brand’s image and boost equity.


Licensing Programs are evolving, becoming more sophisticated, more strategic.  These are more high-powered alliances with companies coming together under a single brand umbrella to improve the lot of each.  They share their technological, manufacturing, marketing and sales resources and know-how.  This is a bigger game and the level of management attention and investment is at another level. 


Licensing Magazine’s Top 150 Global Licensors List for 2017 indicated that the top fifty-five licensing brands profiled in the study reported retail sales of over $1 billion or more.  A big number!  And with strategic long-term licensing programs focusing on extension categories that truly fit the brand, that number will continue to grow.  Royalty generation is a high corporate priority as it must be … and interest in that will not be fading anytime soon.


By virtue of its size and presence in today’s consumer marketplace, licensing is now considered a more mainline business tool. As a business strategy, licensing is used in a wide range of ways to accomplish a host of important goals for corporations..  As the field continues to grow and evolve, we will continue to see patterns and shifts that reflect the burgeoning new trends.  And those trends will accelerate as the business world faces increasing global competition.

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