Brands extend beyond products; Hasbro plans entertainment centers; Diageo opens Johnnie Walker Store; Bloomingdale’s showcases LG; Nike opens flagship store; Harlem Globetrotters team with Champion; Walmart advises for strong holiday; and other licensing news highlights of the week.
Licensing, marketing and retail expert/opinion leader Tony Lisanti, provides insight and perspective for the top headlines of the week. “Licensing and Merchandising Report” is a must read for top execs who want objective, straightforward and authoritative analysis.
Brands Extend Beyond Traditional Products
One of the largest entertainment licensors, Hasbro, has partnered with Kilburn Live to develop family entertainment centers featuring the company’s popular brands.
This move is another example of how IP owners are creating different ways to engage with fans and create brand awareness and special experiences. And these entertainment centers could very well occupy vacant retail space in major malls and strip centers. This is already happening as exemplified by entertainment and dining chain Dave & Buster’s recent opening in a major mall in northern New Jersey, taking over a sizeable piece of a Sears store, which was one of the original anchor tenants of the mall. Furthermore, the Hasbro entertainment center concept gives Hasbro the opportunity to not only sell traditional licensed products and but also showcase its major franchises and content and possibly at some point the IP of its other partners.
Hasbro’s well-known franchises that will be a part of the entertainment centers include My Little Pony, Monopoly, Mr. Potato Head, GI Joe, Clue, Battleship, Hungry Hungry Hippo, Trivial Pursuit, and Chutes and Ladders.
“Hasbro is committed to ‘creating the world’s best play experiences.’ In our 95-year history, Hasbro has transcended the toy aisle to become a lifestyle brand that both kids and adults enjoy,” said Casey Collins, SVP and general manager, Hasbro Consumer Products. “Our partnership with Kilburn will allow us—for the first time ever—to offer a wholly immersive and true play experience that unlocks a totally new and exciting way for fans to experience the Hasbro family of brands.”
Los Angeles-based Kilburn Live has also partnered with Fort Worth-based private investment company Goff Capital, a major shareholder of Kilburn Live.
Kilburn Live recruited Charlie Keegan, former CEO of Main Event Entertainment, to head the new division.
“This new concept and collaboration marks our initial step into a wider partnership with Hasbro, a world leading branded play and entertainment company, with one of the best lineup of brands we have come across” said Kilburn Media CEO Mark Manuel. “This exciting new move is an extension of our creative skillsets built over the years and expands on our business of creating and building unique experiences.”
Harlem Globetrotters and Champion Partner for Apparel
The Harlem Globetrotters and Champion Athleticwear announced a global partnership making Champion the official uniform and apparel brand for the iconic franchise.
The deal features a new Globetrotters uniform that will launch with the tip-off of the team’s Fan Powered Tour of North America that begins November 16. The Globetrotters will play in more than 250 North American markets, as well as 30 countries worldwide.
The multi-year partnership, which includes all Globetrotters on-court and travel apparel, also provides Champion with the opportunity to sell official Globetrotter apparel in their existing stores and retailers worldwide. (The deal excludes headwear and footwear.)
The new line is the Globetrotters first new uniform design in 20 years that highlights the red, white and blue look with various new fabrics and designs.
“Champion is the perfect partner to refresh the uniform of the world’s most beloved sports team,” said Howard Smith, president of Harlem Globetrotters International. “As we travel the globe, our stars are excited to be wearing the iconic C logo on their uniforms. The innovative technology that Champion has designed into every piece of Harlem Globetrotters team gear will bring an exciting new look to our collection.”
“Getting the opportunity to outfit an iconic organization like the Harlem Globetrotters has been a phenomenal experience for us at Champion,” said Tyler Lewison, general manager of Champion Team Athletics. “From their continued innovation in basketball to their community outreach, this team embodies what it means to be a Champion, and we are thrilled about working with them going forward. Their shows are a memorable experience for the entire family, so we can’t wait for fans to see them in their new Champion uniforms this season.
Report Ranks Most Valuable Brands in U.S.
Customer experience and innovation were identified as the key factors for boosting brands, according to the 2019 BrandZ Top 100 Most Valuable U.S. Brands ranking, produced by WPP and Kantar Millward Brown.
In the BrandZ report, Apple jumped into the No. 1 spot as the most valuable U.S. brand, increasing its brand value by 13% to $316.1 billion based on the strength of its products and services business.
Netflix grew its value more than any other brand, increasing by 93% over the last year to $30.2 billion and ranking of No. 28, making it the second most valuable entertainment brand behind Disney.
Other fastest risers are PayPal (up 88%, to No. 19) and Amazon (up 69%, to No. 3). Uber was the most valuable new brand that made the list at No. 35 with a brand value of $21.1 billion.
Overall, the top valued brands don’t have extensive traditional licensing programs indicating that a potential opportunity to drive additional revenue through brand extensions does exist. This potential will vary greatly for various strategic reasons among the top brands in the ranking.
According to the report, “customer experience is as important as being perceived as innovative for increasing brand value. As Americans engage with brands in more and more places, the brands that continually innovate customer experience are winning, growing 200% more than those that don’t.”
“Innovative companies such as Netflix and Uber are disrupting markets and creating new ones, while larger brands like Apple continue to shake things up with data, digital and marketing technology investments to maintain leadership in the new era of consumer experience. This year’s ranking shows that while US brands are amongst the most innovative in the world, innovation alone is no longer enough for brands to grow,” said Tim Wragg, CEO Kantar North America Insights Division.
Beth Ann Kaminkow, CEO of Kantar Consulting Brand & Marketing Americas continued: “Customer experience is now the greatest amplifier of value growth. However, US brands are lagging other countries in delivering on consumers’ expectations and letting them experience their innovation. They will need to focus on improving consumers’ experience of their brand in 2019 by breaking down internal silos and uniting marketing and sales to design holistically across all channels and touchpoints, for experience and commerce.”
The 2019 BrandZ Top 10 Most Valuable U.S. Brands
|Brand||Brand Value (billions)|
Overall, the BrandZ Top 100 U.S. brands grew 15% in the last year to $3.65 trillion, a combined value that is nearly one fifth (19.6%) of U.S. GDP. They generate more value for their businesses than brands in any other country in the world.
“U.S. brands excel at globalization,” said WPP’s David Roth. “The fact that they are so entwined in the lives of consumers around the world means they are often not thought of as American. This has helped to disconnect them from the political turmoil in the last year. It is an advantage not shared by brands that are less global and more connected to their country’s DNA. Their independence from the U.S. is further demonstrated by the fact that they account for roughly half the value of the BrandZ Global Top 100 ranking.”
Johnnie Walker Opens First Experiential Store
The world’s number one Scotch Whisky brand, which is part of the Diageo portfolio of spirits, opened a retail store designed to extend its brand and create a special experience for consumers.
More and more brands are developing ways to attract loyal customers as well as reach new audiences. Options include a permanent retail destination or tourist store, a themed pop-up store, a temporary holiday store, a store within store partnership with another retailer, or simply partner for product sales and merchandising in store or online. The Johnnie Walker scotch store is similar in many ways to the “experience” and merchandising efforts effectively executed by major wineries around the world.
The Johnnie Walker store, the first of which opened in Madrid, features an interactive hosting area where guests can discover the craft of cocktail making, a tasting table, educational classes, and various products and gifts.
Johnnie Walker global brand director John Williams said: “We’re always looking for new ways to surprise and engage our customers and this kind of experiential Johnnie Walker flagship store does just that. It also adds a sense of fun and discovery to shopping and is a whole new way of experiencing the diversity and rich heritage of Johnnie Walker.”
Johnnie Walker will celebrate its 200th anniversary year in 2020.
Nike Opens ‘House of Innovation’
Nike opened its newest destination store on New York’s Fifth Avenue this week. It’s a massive 68,000 sq. ft., six-level, store that represents the best the Nike brand offers from its products to innovative experiences.
“Nike NYC is designed to be a dynamic store environment, that is just as personal and responsive as digital,” said Heidi O’Neill, Nike Direct president. “This premium destination gives consumers an authentic, immersive and human connection to the Nike Brand.”
The sports apparel brand believes that its New York store creates a new benchmark for Nike retail with various design elements, digital connections, immersive experiences and product showcases. The store features the Nike Arena, Nike Speed Shop, Nike Sneaker Lab, Nike Expert Studio, plus separate product floors for men, women, kids, and footwear.
It’s definitely an impressive state-of-the-art store that reinforces how brands are targeting consumers directly with innovative products and experiences. Through the use of its Nike app, the store offers customers the ability to scan QR codes and request products in store as well as instant checkout.
Walmart Posts Decent Q3, ups Holiday Forecast
Walmart reported Total revenue increased 1.4% to $124.9 billion in the third quarter and operating income increased 4.7% to $5 billion, while U.S. comp sales increased 3.4%.
Walmart credited its strong results to the strength of its private label brands in grocery and across other categories, the new and expanded assortment in toys, and the automotive category’s strength in tires, batteries and oil.
With seven acquisitions in ecommerce over the past two years, Walmart continues to grow its online business chasing rival and leader Amazon. For Q3, Walmart reported an increase of 43%.
Most importantly, Walmart raised its adjusted earnings outlook to $4.75 to $4.85 per share from $4.65 to $4.80. The company also said it expects comp sales to grow “at least” 3%.
Conversely, JCPenney reported a dismal third quarter. The retailer reported comp sales decreased 5.4% for Q3, while total net sales decreased 5.8% to $2.65 billion compared to $2.82 billion, and a net loss of $151 million.
Jill Soltau, chief executive officer, said, “I am excited to be at JCPenney, and having been in the office for a month now, I am encouraged by the many opportunities I see. Our objective to put JCPenney back on a path to profitable growth is clear. In the coming weeks and months, I will continue to meet with and learn from our teams throughout the entire organization—talking with them about what we’re doing that’s working well and, most importantly, what we can do to address our opportunities.”
As I have previously reported with regard to other retailers, it sounds like the same old excuses and outlook. JCPenney is another retailer, like Toys “R” Us and Sears, that seems to be stuck in what I have termed the “Perpetual Turnaround.”
Soltau continued, “In spite of our overall sales results, I am encouraged by the recent underlying trends in key businesses such as women’s apparel, active, special sizes and fine jewelry. We are making progress and taking the necessary steps to right-size our inventory positions to better support the brands and categories that are demonstrating profitable sales growth.”
Bloomingdale’s Partners with LG Brand
LG Electronics has joined forces with Bloomingdale’s on a unique store-within-a-store concept that marks the first time the upscale department store retailer will merchandise appliances and televisions.
The new pop-up shop concept will showcase the electronics company’s luxury brand collection called LG Signature. It’s another example of how a major brand is leveraging the opportunity to promote its products directly to consumers in such a way that was not possible in past years.
David VanderWaal, senior vice president of marketing at LG Electronics USA, said: “We’ve learned that consumers want to discover how LG Signature fits within their lifestyles. With this unique retail presence, we’re showing them how these sleek, sophisticated products deliver on both function and design. Bloomingdale’s is a natural fit for LG Signature products to unveil our new luxury retail model.”
“We are excited about this unique partnership with LG,” said Dan Leppo, Bloomingdale’s EVP and GMM of Men’s and Home. “We continually seek ways to improve the lives of our customers through our product offering. The addition of LG SIGNATURE products alongside our robust home assortment allows our customers to explore how these items could work in their homes and enhance their lifestyle.”
Quote of the Week
Jeff Bezos, as reported by Business Insider:
“Amazon is not too big to fail … In fact, I predict one day Amazon will fail,” Jeff Bezos reportedly said when addressing a question about Sears recently going bankrupt. “Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.
“If we start to focus on ourselves, instead of focusing on our customers, that will be the beginning of the end … We have to try and delay that day for as long as possible,” Bezos said.
Stat of the Week
Alibaba’s record Singles Day sales
The Chinese e-commerce giant reported sales reached $30.8 billion for the 24-hour period representing an increase of 27% over last year. The number far exceeds that of Amazon’s Prime day with reported sales estimates of $4 billion.