Amanda Cioletti, VP Content/Strategy, Informa Markets Global Licensing Group, organizers of Licensing Expo and media brand License Global.
The global licensed consumer product industry is on edge. The ever-changing tariff regulations are throwing global businesses into a state of confusion thanks to constantly moving deadlines, rate fluctuations, exemptions and reinstatement and more. But business marches on.
Licensed consumer products are heavily driven by fan culture and a connection to well-known, beloved brands, and they continue to outperform the broader retail market, according to data from Licensing International’s Global Licensing Industry Study. Generations of shoppers across the world seek to engage with their favorite brands and characters, with purchases driven by emotional connection, fandom and loyalty to popular intellectual properties (IPs). During times of economic uncertainty, fan-favorite IPs often fare better than non-branded like products.
New import duties mark a shift in global dynamics, and several shifts are emerging in response to the new trade environment. Many companies are seeking multi-regional or near-shore production strategies to lessen their reliance on a single manufacturing hub. Complex networks are being forced to spring up to navigate origin duties and taxation.
Predictably, more cutting-edge manufacturing processes are being leveraged, such as print-on-demand, particularly in the U.S., where some goods are shielded from tariffs. This does exclude major product categories (toys, for one, are greatly affected since many parts are manufactured in China), but for apparel, where materials can be sourced domestically, it could be a godsend. Fears around quality control, lack of inventory, skyrocketing raw material costs and more persist, but like the tariff rates and negotiation talks, the conversation is changing daily.
Future-proofing is top of mind for brands, as noted in the recent Top Global Licensing Agents Report, which highlights six strategies being adopted by the world’s leading companies: data-driven decision making, digital and e-commerce expansion, sustainability, global collaborations, customer engagement and adaptability and flexibility to ensure they remain responsive to market changes.
Companies are also focusing on strengthening brand value to justify premium pricing. In other words, businesses are deepening emotional connections with their audiences to make their products more meaningful and desirable despite higher price points. This approach is complemented by the introduction of carefully curated, exclusive products and limited editions that create a sense of uniqueness and exclusivity. Additionally, companies are elevating their production standards, emphasizing superior materials, craftsmanship and attention to detail to deliver products that demonstrate tangible value to consumers.
Moving forward, the industry’s trajectory includes cost optimization and greater efficiencies from end-to-end operations, strengthening and upholding sentiment and connection to consumers through enhanced value proposition, quality, care and consistency. Companies will also look to adopt new marketing strategies to reach consumers in meaningful ways amidst the ongoing changes in the landscape.
The collaborative nature of the global licensing industry remains fundamental to its success. Brand owners, manufacturers, retailers, agents and designers must work in concert to create products that resonate with increasingly budget-conscious consumers.
Looking back at the industry’s track record, licensed consumer products have successfully navigated numerous challenges, from the financial crisis of 2008 to massive supply disruptions and the global pandemic. Each obstacle has ignited innovation and led to stronger market positions, demonstrating the industry’s resilience. While the current landscape presents challenges, it also offers opportunities for evolution and strengthening of business strategies.
The licensing industry’s ability to maintain growth underscores the enduring appeal of branded products and experiences. As consumers become more selective in their purchasing decisions, the emotional connection and perceived value offered by beloved brands become increasingly important differentiators in the marketplace. This fundamental strength, combined with the industry’s demonstrated ability to adapt and innovate, suggests a promising outlook despite the current challenges.
Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Do I qualify?