Opportunities and obstacles in the brand licensing industry are evolving faster than ever before. Maura Regan, President of Licensing International, discusses growing trends across the industry and how the trade association is supporting the brand licensing community as executives work to stay ahead of ongoing changes.
Can you give us an overview of the facts and figures of the licensing industry in the US?
Globally, sales of licensed merchandise and services reached $356.5 billion in 2023. The U.S. accounted for $199.5 billion during that period, according to Licensing International’s Global Licensing Industry Study. That’s an increase of 3.4% compared to the year before. The biggest property types in the U.S. are Characters/Entertainment, Corporate, and Sports. The biggest product categories in the region include Apparel, Toys, and Software/Video Games/Apps. As consumer behavior continues to change, however, these figures also evolve. We will be announcing the topline report from this year’s Global Study at Licensing Expo in Las Vegas and the full report will be available for free to LI members later this summer.
What about the other main trends that are relevant to follow in the near future?
A significant trend moving forward is the growing spending power of the kidult demographic, made up of adults that purchase toys as collectors or to fuel nostalgia. In the U.S. alone, toy sales driven by adults reached $1.5 billion in Q1 2024, according to Circana. Many adults also purchase toys in support of their mental health, which means that, in times of stress or economic uncertainty, we can expect these sales to continue to increase.
Dupes (short for duplicates) are less expensive replicas that don’t infringe trademarks. The growing popularity of dupes on social media platforms like TikTok mean that knockoffs are increasingly in demand with younger consumers looking to stretch their dollars. In fact, a survey by Business Insider reported that 71% of Gen Z consumers go out of their way to purchase dupes. As this trend continues to grow, it’s increasingly important for brand owners to protect their IP and for the industry to help educate consumers about the dangers of these knockoff products.
Micro Influencers are another trend that will be relevant moving forward. We know that more and more consumers are making purchases directly through social media platforms and the social commerce market in the U.S. alone could grow to $145 billion by 2027, according to McKinsey & Company (up from $67 billion today). However, instead of partnering with the biggest influencers on these platforms, many brands are instead focusing on micro influencers with approximately 10,000 to 25,000 followers because of their high engagement rates with their followers.
How do you see the Sustainability trend growing in the US licensing industry?
Sustainability is something that brand owners, manufacturers, and retailers need to consider as they expand their businesses. This is especially true for companies that want to connect with younger consumers, including Gen Z and Gen Alpha, who say that they want to support brands that reflect their values. This younger demographic considers environmental impact when they make purchases.
How are gaming IPs becoming crucial in consumer products?
More consumers of all ages are playing video games, including through PCs, through mobile gaming, and through consoles. Engagement with these properties is incredibly deep, since gamers dedicate as much as 80 hours to each gaming title. That is significantly more time spent than, say, with a feature film. Because of this passion and dedication, gamers are a very appealing demographic. In addition to inspiring consumer products, these gaming properties are also increasingly serving as the foundation for new content. HBO’s hit series The Last of Us is a fantastic example, and that storytelling provides new opportunities to connect with consumers and to help the brand expand into more categories.
Which Consumer Products Categories are growing more than others in the licensing industry? (e.g. Fashion, Food, etc.)
When you look at categories that have shown significant growth recently, like Museums & Heritage (up 19.4%), Music (up 16.4%) and Sports (up 5.6%), it’s clear that consumers are focused on experiences they can share with friends and family. The focus on location-based entertainment that emerged in recent years has only grown and brands that can take advantage of the desire to gather together (and to share those experiences afterwards on social media) will benefit moving forward.
Curated by Cristina Angelucci
