Entertainment brands dominate Toy Fair; Top trends from Toy Fair; Walmart releases annual financials; Target expands kids’ brand; Sears launches craftsman line; P&G will double Tide cleaners; plus, other top brand licensing and retail news.

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 for the retailers, licensors and brands.

New York Toy Fair: Unlimited Products, Minimal Space

The TA’s New York Toy Fair once again reinforced the polarization of the toy industry between the mega players and the smaller companies as well as a reality check that there’s far more licensed toys and new products than there is retail shelf space.

Therefore, the entertainment licensed brands, considering the top franchises hitting the big screen, will dominate the toy aisles again this year, while the innovative new products will find it difficult to find retail space. Yet, both will turn to social media and direct-to-consumer ecommerce models to drive awareness and sales.

While the “new” Toys ‘R’ Us, Tru Kids Brands, gears up for expansion in the U.S., the loss of the venerable retailer last year and its financial impact is still lingering among the major toy companies including Hasbro and Mattel.

Furthermore, TRU’s inherent role as the showcase, advocate and supporter for new toys will not be replaced by any other retailer any time soon.

The major toy companies showcased licensed products based on major franchises and the latest theatrical releases and popular content-driven network and streaming shows. Here’s a few licensed brands that will be among the top toys this year:

  • Disney: The No. 1 licensor has numerous film franchises that it will support with various products and events, including Star Wars: Episode IX and Disney’s Frozen 2. Disney reported that the countdown to Triple Force Friday will culminate on Oct. 4, when new products hit retail.

As I’ve outlined previously, Disney will dominate not only with these two franchises, but with others as well including Toy Story, Marvel films, Captain Marvel, Avengers and Spider Man.

“This is truly an epic moment for fans, families and retailers as products for two of the biggest-ever entertainment franchises hit shelves simultaneously,” said Ken Potrock, president, consumer products commercialization. “We’ll be working with our partners to create suitably spectacular celebrations for each, in line with the excitement and anticipation of the legions of Star Wars and Frozen fans around the globe.”

Star Wars products will range from toys to collectibles, housewares, books, and apparel and will be supported by numerous in-store events and midnight openings.

“With Disney’s Frozen 2 and Star Wars: Episode IX both launching in the same year, it will be a notable time for the toy industry,” says Juli Lennett, vice president, industry advisor for The NPD Group’s U.S. toys division. “If history is any indication of future success, both Frozen and Star Wars will be among the top-selling properties of 2019, just as they were in 2014 and 2015/2016, respectively.”

Frozen 2 hits the big screen on November 22, and a major product launch and events are planned globally at the same time as Star Wars. Frozen Fan Fest and the sequel could easily outperform the original in 2014 as one of the top box office films and top toy brands.

  • Hasbro: The entertainment licensor and toy company is placing a major effort this year on the Power Rangers franchise, which it acquired from Saban Brands. Hasbro has plans for a live show as well an extensive line of merchandise. In addition, Hasbro is selling various products direct to consumers from its Hasbro Pulse site as a way to promote collectables and also to build a new revenue stream in response to the loss of TRU.
  • WBCP: The focus continues to be on Batman, Godzilla, Harry Potter and DC Collectables with new and updated toy lines.
  • NBCUniversal: Universal Brand Development and Illumination signed a major licensing deal with Mattel for the Despicable Mefranchise and Minions sequel, as I reported last week. Mattel plans a wide variety of products including action figures and dolls, play-sets, vehicles and radio control toys, games, plush, role-play and accessories that will retail shelves in conjunction with the film’s release in July 2020.
  • Nickelodeon: One of the highlights for Nick this year is a multi-faceted strategic plan to celebrate the 20th anniversary of its iconic franchise, SpongeBob SquarePants. The celebration will focus on the “Best Year Ever” tribute to the popular series, which launched July 17, 1999, and has become a pop culture phenomenon that includes everything from fan merchandise to the Broadway musical. The entertainment licensor has worked extensively to develop new and innovative content, marketing and merchandise to extend and grow the franchise and its fan base. Of course, don’t forget TMNT, and its strong lineup of kids’ programs including Dora the Explorer, Nella the Princess Knight and Blaze and the Monster Machines.
  • Mattel: While licensing deals for major films is important for its toy biz, perhaps the most important factor in Mattel’s turnaround is content development of its own IP including movies for Barbie, Hot Wheels and American Girl as well as a new slate of 22 animated and live-action TV programs based on its iconic characters and franchises.

Toy Association Reports Toy Fair Trends

The Toy Association’s trend experts released its top six trends from this year’s Toy Fair. Here’s a summary of its report: Unboxing 2.0; Compound Crazy: Dough, Slime, Sand and More; Throwback Toys: Foodie Fun; Inspirational and Aspirational Play; and Explosive Entertainment.

Walmart’s Revenue Hits $515 Billion

Here are Fiscal 2019 highlights from the world’s largest retailer:

  • Total revenue was $514.4 billion, an increase of $14.1 billion, or 2.8%.

  • Walmart U.S. comp sales increased 3.6%. Grocery pickup and delivery are available in more than 2,100 and nearly 800 locations, respectively.
  • Walmart U.S. eCommerce sales increased 40%.

From a merchandising perspective, Walmart added numerous private label brands in several categories, expanded its toy assortment, acquired several ecommerce brands, in a combined effort to compete more aggressively against Amazon, Target and other grocery retailers. 

Sears Launches New Craftsman Line

In a surprising announcement, Sears is launching a new Craftsman line. Called Craftsman Ultimate Collection, the line is designed for mechanics featuring newly redesigned, high performance ratchets and wrenches.

Following its long and contested fight to survive, which was approved by the bankruptcy court less than two weeks ago, it’s not only surprising but somewhat perplexing that Sears would release a new tool line. The retail has such a long list of things it must do to survive that a new Craftsman line is virtually a meaningless addition its merchandising assortment.

Furthermore, it only adds to confusion in the marketplace considering Lowe’s is now selling Craftsman products, following the brand’s acquisition by Stanley Black and Decker,

The Sears customer needs far more than compelling reasons to shop its remaining stores than another niche product carrying the Craftsman name, which may no longer be the super brand it once was.

“Sears is the real home of the broadest assortment of Craftsman, and we’re pleased to offer our customers innovative new products from this power brand,” said Peter Boutros, president of Kenmore, Craftsman and DieHard and chief brand officer for Sears and Kmart. “What better way to ensure our mechanic sets are professional-grade, than by working with professionals to create the set? With the Ultimate Collection, we are proud to be offering professional-grade tools we know our customers will love. And these tool sets are only available at Sears.”

A few products in the Craftsman Ultimate Collection include: Craftsman Ultimate Collection 104 pc. Mechanic’s Service Set ($319.99); Craftsman Ultimate Collection 220 pc. Mechanic’s Service Set ($749.99); Craftsman Ultimate Collection 302 pc. Mechanic’s Service Set ($999.99).

Target Adds to Kids’ PL Brand

Target announced that its exclusive kids’ brand, Art Class is expanding into toddler sizes 12M-5T.

This is another example of Target’s PL strategy, which will continue to challenge licensed brands and national brands that once dominated the retailer’s square footage.

“When we launched Art Class in January 2017, both kids and parents fell in love with the brand. Its success has helped our Kids’ business grow year-over-year, outpacing the industry,” says Jill Sando, senior vice president, general merchandise manager, apparel and accessories and home. “By further investing in this category and bringing a diverse range of affordable exclusive styles and aesthetics to kids of all ages, we’re reinforcing Target as the ultimate one-stop-shop.”

P&G Expands Tide Cleaners

One of my favorite brand extensions, first introduced in 2009, is P&G’s Tide brand in the dry-cleaning business. P&G/Tide reported this week that it is committed to “doubling the size of its current out-of-home laundry footprint by the end of 2020, making “Tide Cleaners” services available in more than 2,000 locations nationwide.”

“Many people believe that in order to get laundry done right, they have to do it themselves,” said Sundar Raman, vice president of P&G’s North American Fabric Care business. “Tide is taking this challenge head-on and aiming to give people clean, cared-for clothes and some time back. This new service will complement our existing business and give people the option to get the Tide clean they deserve on their terms, not on their time.”

The stores have revolutionized the dry-cleaning business with drop boxes, 24-hour service, on-campus delivery, and drop boxes in existing retailers. Tide Cleaners stores also merchandise various P&G cleaning products.

Brand Extension of the Week: TWA

A new hotel and the first one at New York’s JFK airport began accepting reservations this month sporting an eclectic, nostalgic design and a familiar name to millions of consumers. Check out the TWA Hotel in Dwell Magazine. 

Stat of the Week: Licensed Kids Books

One in Four 2018 children’s books in the U.S. featured a licensed property, according to The NPD Group, and licensed books comprised 12% of total book sales.

Interesting Article of the Week: Fast Company

Check out the “World’s Most Innovative Companies” and the Top 10 in 40 business sectors. No. 1 Apple dropped to No. 17! And Meituan Dianping, a Chinese tech firm, is now No. 1. In key sectors:

Branding: National Geographic: No. 6

Retail: Stitch Fix: No. 1; Target: No. 2

Film & TV: Warner Bros.: No. 2; Netflix: No. 5

Gaming: Punch Bowl Social: No. 1; Epic Games: No. 2.

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