Black Mint Licensing’s John Vasta gives us his observations on how the retail market differs in Australia.
After spending 11 years in the UK, and loving every minute of it, I made the decision to head back to my roots in Australia, just over two years ago.
As well as leaving behind friends, familiar places (and pubs on every corner), I also left behind the UK Licensing industry which had been very welcoming and kind to me.
As I ventured back to Australia, I pondered what the business I had left behind all those years ago would now look like and how it would differ to the retail landscape I had just left.
As I immersed myself back into the Australian industry, I realised quite quickly that the challenges are invariably the same, with shelf space for licensed products at a premium.
For our Australian industry, the bigger challenge comes down to a basic maths equation that there is simply less people, 24 million of them to be exact, to buy our licensed merchandise.
In Australia, the last 15 years has seen major retail consolidation with the specialty and higher end retail segments diminished markedly. This is not a unique issue to Australia but has led to a significant dependence placed on a few mid tier and mass retailers, led by the likes of Big W, Target and Kmart who drive volume in licensed categories.
By contrast, in the UK, specialist retailers such as Next, Claire’s Accessories, WH Smith and Boots all support licences to varying degrees. Furthermore, the value chains such as B&M Bargains, Home Bargains and Poundland are also growing their licensed product offering.
With the exception of some specialty retailers in Australia, in order for a licence to be a critical success it needs to have a major mid tier and mass presence.
If you, as a licensor or agent, can secure that presence then significant returns can be expected.
There is an almost viral nature of a successful brand which grows through word of mouth through the retail landscape in Australia. When a brand goes big in Australia it grows at a rapid rate of knots and burns bright. The challenge is keeping that flame burning for as long as possible.
This is very much a symptom of having a few dominant retailers who support similar brands and as such, consumers are immersed on all sides when they visit these popular stores.
The bigger licensors have the budgets to make statements at retail which further perpetuates the brand message. This is true all around the world, but is particularly noticeable in Australia.
It is also interesting to observe grocery retailers in Australia beginning to tactically support licenses with promotional FSDUS and premium promotions. This is a very encouraging trend as the likes of Coles and Woolworths continue to take significant retail dollars.
Unlike in the UK, grocers in Australia have not fully expanded into general merchandise but if, and hopefully when they do, this will have a dramatic impact on licensed merchandise sales. The emergence of Aldi has also been a very positive move for our industry as they tactically support licensed products.
Since returning to the Australian business I have certainly been challenged by the big properties dominating key retail space, but it has made those wins with emerging brands all that much sweeter.
With these challenges we face, it is now even more important to work collaboratively with your licensed partners to create compelling products, expanding the offering sku by sku and eventually growing the overall presence.
We all face the same challenges around the world, but great product will always win through, which is why we all love this industry of ours!
Black Mint Licensing is a full service consumer products licensing agency and consultancy business focused on the Australian and New Zealand markets. You can contact John by emailing john@blackmint.biz.
