In an uncertain world, shoppers gravitate toward the familiar.
It could be a classic children’s book, a toy based on a favorite cartoon character or a bowl of Frosted Flakes cereal.
“In this time, people really turn to brands that bring them comfort,” said Zion Doran, senior director, integrated promotions and partnerships at Kellogg’s. Since the COVID-19 pandemic began, Kellogg’s has seen demand skyrocket for foods like Froot Loops, Frosted Flakes and Pringles, she said.
For retailers that sell those licensed products today, the crucial brand message to convey to customers is that you will help them protect their families, keep their families entertained and educated at home, and help them save money, Andrew Tucker, vice president, general merchandise of Family Dollar, said.
Tucker and Doran participated in a panel on The Future of Consumer Products and Retail, hosted by Pam Kaufman, president of ViacomCBS Consumer Products; along with Felicia Frazier, senior vice president, children’s sales and education at Penguin Random House; and Geoffrey Greenberg, co-founder of toy company Just Play.
The discussion was part of Licensing Week Virtual, an online event hosted by trade association Licensing International and trade show organizer the Global Licensing Group.
The virtual event was created after the pandemic forced the licensing association to cancel its annual spring show.
Brand loyalty and toys fuel $293 billion licensing business
Licensed products are big business. In 2019, global sales of licensed goods and services reached $292.8 billion, an increase of 4.5% over 2018, and up 11.4% since 2016, according to Licensing International.
Licensing has a real opportunity now because amid the pandemic, “people are really thinking about brands and your loyalty to a brand,” Anna Knight, Global Licensing’s group vice president, told CO—.
Brand loyalty boosted sales of the best-known licensed toy properties, such as Nickelodeon, as the pandemic began. “In the early days, consumers were uneasy and they sought the comfort and security of trusted, well-known brands,” Just Play’s Geoffrey Greenberg said. The top 10 licensed properties represented 20% of industry sales in the first quarter, he said.
Toy sales have been unusually strong during the pandemic. In the month of May alone, the toy industry grew 36%, with sales year-to-date up 15.4%, Greenberg said. “That represents $1 billion in incremental toy sales. That’s staggering.”
Just Play, which makes plush dolls and stuffed animals featuring kid’s entertainment characters in addition to other toys, has begun manufacturing plush toys with masks, in response to requests from parents.
“We found that children were anxious about wearing the masks,” and parents were having them practice by putting masks on their stuffed animals, Greenberg said.
The publishing industry also has been a winner during the pandemic, with book sales up 10%, Penguin Random House’s Felicia Frazier said.
The first category to see a surge was workbooks and activity books, as parents sought to educate and occupy their children at home.
“Then, as the family settled in, it migrated to classic titles and back lists and trusted brands — those trusted brands moms lean into,” Frazier said.
With retail stores closed, and school book fairs canceled, Penguin Random House began testing customer-direct fulfillment, where the publisher will ship an order directly to the consumer on behalf of a retailer. The company is looking at ways to conduct online book fairs and has repositioned materials previously sold only to schools to make them available to parents.
Our customers need us more now than any other time. They are looking for the mass and value chains to lower their cost of living.
Andrew Tucker, vice president, general merchandise, Family Dollar
Kellogg’s and Family Dollar serve heightened demand for comfort food, safety-geared fare
For Kellogg’s, meeting the dramatically increased demand for its comfort foods has been the biggest challenge, Doran said. The company also had to learn how to quickly pivot and stay flexible.
Kellogg’s, she said, has many promotional partnerships in the sports industry — including two college bowls it sponsors — that are in limbo due to the pandemic. While the company has had to shift marketing plans and promotions this year, it’s important that “we don’t let the current situation stop long-term partnerships and long-term strategy,” she said.
Family Dollar, Andrew Tucker said, has benefitted from being an essential retailer and from being a value retailer, one of the best performing retail categories at the moment.
“Our customers need us more now than any other time. They are looking for the mass and value chains to lower their cost of living.” he said.
At the start of the pandemic, Family Dollar saw that “mom wants to make sure her children are protected,” with masks, hand sanitizer, and other health and safety products selling briskly, Tucker said.
Next, mom was focused on “trying to make living at home very comfortable for her family and her children,” buying pens, books and items for at-home schooling, and also products to entertain the whole family, he said.
Now, a top priority for Family Dollar and all retail is to “make sure our customers feel safe when they come to us,” with safety measures in place like social distancing markers and plastic shields, Tucker said. That’s because shoppers not only must trust the brands they buy, but the stores where they buy them.
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