Agency Evolution

The licensing and retail landscape has evolved over the past several years to one that, in many sectors of the business, is more about collaborations and capsules than long-term merchandise lines, more about targeted initiatives than mainstream programs, and as much about experiences as products.

Licensing agencies have been gradually reacting to this transformation by moving away from the traditional exclusively commission-based licensing model, which relies on developing and managing long-term licensing agreements. They are opting instead for a more flexible template that positions them better for success in today’s world.

According to the just-published Licensing Agency Benchmarking Report, which offers a research-based snapshot of the licensing agency business as it stands today, some common approaches include:

  • Expanding services. A majority of agencies globally (62.1%) provide design services, to name the most common addition; others include research, trend spotting, social media, and more. Agencies complete these tasks for existing licensing clients, outside of the scope of the basic representation agreement, as well as to other customers.
  • Establishing alternative business models. These include project-based consulting, manufacturer representation, and brokering one-off deals. More than four-fifths (81.2%) of licensing agencies worldwide report doing at least some project consulting, for instance.
  • Taking ownership stakes. Almost 9% of agencies have dipped their toes into property ownership (outright or as an investor) as of 2018.
  • Allying with other agents. More than two-thirds (67.8%) of licensing agencies report collaborating with their colleagues in some way on at least one property.
  • Specializing. On a global basis, nearly four in 10 licensing agencies (39.4%) focus completely or mostly on just one property type, while a small but growing group (5.7%) anchor their businesses solely, or almost solely, on one product category.

Several of these strategies have been gaining traction for some time, of course, although it has been mostly in recent years that they have become formalized and publicized as standard practice.

Read more about The Licensing Agency Benchmarking Report here.

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