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Distribution Channels

Discounters, Specialty Channels Drive Licensed Entertainment/Character Sales in 2019

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Brick-and-mortar channels fielded 81.2% of all licensed entertainment- and character-based sales in 2019, according to TLL’s Annual Licensing Business Survey.

Physical retail’s share of U.S. and Canadian sales has decreased from 86.0% in 2009, when TLL began tracking this data. Since then, ecommerce channels have jumped from 11.0% share to 17.6% share, up by nearly $1.2 billion over the 11-year period. Other channel sales, including TV shopping and mail order, made up 1.3% share of sales in 2019.

The largest distribution channel among brick-and-mortar channels is distributors with 56.3% share of all physical retailer sales and 45.7% share of all entertainment- and -character-based sales. Channel sales were up 3.5%, or $211 million, to reach almost $6.2 billion in sales after a sudden -1.4% dip in 2018. Since licensed sales through distributors jumped 4.8% in 2013, the channel had consistent year-over-year licensed sales growth averaging 7.0% through 2017.

Retail Sales of Licensed Entertainment & Character Merchandise, by Distribution Channel, U.S. & Canada, 2018–2019
Note: Numbers may not add up exactly due to rounding.
(Figures in millions)
Distribution Channel Retail Sales, 2019 Retail Sales, 2018 Change, 2018–2019 Share, 2019
Discounters $6,178 $5,966 3.5% 45.7%
Specialty stores $2,701 $2,602 3.8% 20.0%
Ecommerce $2,378 $2,286 4.0% 17.6%
Food and drug $903 $871 3.7% 6.7%
Variety, dollar and convenience $801 $773 3.6% 5.9%
Department store/mid-tier $394 $378 4.0% 2.9%
TV shopping $106 $102 3.4% 0.8%
Mail order $13 $13 3.5% 0.1%
Other $52 $51 2.9% 0.4%
Total $13,526 $13,043 3.7% 0.0%

Following two straight years of declining channel share, with sales declines of -10.5% in 2017 and -4.0% in 2018, licensed sales through specialty retailers rebounded with 3.8% growth in 2019. Dollar sales were up $99 million for a total of $2.7 billion in retail sales. Licensed sales are not expected to rebound to a significant degree over the next couple of years.

Most of the declines in the discounter and specialty channels in 2018 (a combined loss of $197 million) were regained in the distributor channel in 2019. These sales largely translate to toy and game sales, which were redirected from specialty retailer Toys’R’Us to mass retailers like Target and Walmart over the next year. Some toy and game sales were routed to other specialty retailers, such as Barnes & Noble, or department stores, such as Macy’s.

Licensed sales through food and drug channels were up 3.7%, or $32 million, to surpass $903 million. While most sales through the channel are food and beverage products (on the food retailer side) and health and beauty products (on the drug store side), retailers in this category are taking on an increasingly diverse range of product categories.

Sales through variety, drug, and convenience stores were up 3.6%, or $28 million, to reach $801 million. The lion’s share of products sold through this channel tend to be impulse, such as confectionery, accessories, and novelties, but as with food and drug channels retailers are increasingly taking on a diverse range of product categories.

Department stores and mid-tier retailers saw a 4.0% boost in sales, translating to $15 million and bringing total sales through the channel up to $394 million in 2019. Higher-end apparel, accessories, and footwear products saw steady sales with new inroads for toys/games opening up over the last couple of years.

TV shopping channels saw a 3.4% rise in licensed sales in 2019, with dollar sales up $3 million to reach $106 million. This is a surprisingly dynamic channel for entertainment and character properties, and has proven to be a strong break-out sales category for new brands.

Mail order sales were flat, with sales up 3.5% (under $500,000) to remain at $13 million in 2019. Sales within the category have been reduced by almost 90% since 2009 thanks to evolving retail trends.


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