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E-commerce Sales Surge as Specialty Purges Entertainment/Character

By Karina Masolova,

Retail sales of licensed merchandise based on entertainment/character properties grew to reach $31.1 billion worldwide, according to TLL’s Licensing Business Survey. In the U.S./Canada, retail sales grew 3.4% to reach $13.2 billion.

Across the board, Survey respondents reported that social media is now a dominant means of fan engagement and marketing. And particularly in entertainment/character, many are reporting that their largest retail sales gains have been from e-commerce rather than retail, where buy-ins are lower and margins are tighter.

Retail sales of licensed entertainment/character-based merchandise through e-commerce sales grew 11.1% in 2017 to reach $6.1 billion. The increase can be attributed broadly to major e-commerce platforms like Amazon, the online arms of traditional brick-and-mortar retailers, and

Online sales now make up 17.2% of all sales of licensed entertainment/character-based merchandise. Over 80% are made at brick-and-mortar locations, and 1.3% are orders made through TV shopping, mail order, and “other” distribution channels.

Sales via specialty outlets shrunk -10.5% in 2017 to reach $2.7 billion or 20.5% share of all sales. Although the category remains the second-largest distribution channel, in 2017 there was a steep drop in shelf space at specialty retailers like toy, gift, stationery, and book sellers. One reason was the booming popularity of collectible toys that were not based on licensed properties; another was the diminishing reliance of these shops on licensed brands to attract shoppers.

The exception to this trend were comic book and video game shops, which relied on entertainment- and video game-based merchandise to diversify their standard offerings.

Discounters saw sales rise 8.6% to reach $6.1 billion in entertainment/character-based retail sales in 2017 as retailers like Target, Walmart, and even Kohl’s stepped up to vend more entertainment-based toys, apparel, and accessories than they had the year prior.

Department stores were the only other channel to drop in share, with sales decreasing -5% from 2016 to reach just under $400 million in licensed retail sales. Faced with a tougher retail market, these stores by-and-large decided to shed licensed offerings in favor of their own branded merchandise.

Retail Sales of Licensed Entertainment & Character Merchandise, By Distribution Channel, U.S. & Canada, 2016–2017
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Distribution Channel Retail Sales, 2017 Retail Sales, 2016 Change, 2016–2017 Share, 2017
Discounters $6,054 $5,574 8.6% 45.8%
Specialty stores $2,712 $3,030 -10.5% 20.5%
E-commerce $2,273 $2,046 11.1% 17.2%
Food and drug $868 $831 4.5% 6.6%
Variety, dollar and convenience $764 $742 3.0% 5.8%
Department store/mid-tier $377 $396 -5.0% 2.8%
TV shopping $104 $102 1.5% 0.8%
Mail order $13 $13 1.0% 0.1%
Other $52 $51 1.0% 0.4%
Total $13,215 $12,785 3.4% 100.0%

Representative Retail Stores By Distribution Channel

Mass/Discount/Club/Big Box: BJ’s, Costco, Kmart, Sam’s, Target, Walmart

Specialty Stores: Ace Hardware, Barnes & Noble, Bass Pro, Bed Bath & Beyond, Best Buy, Cabela’s, Cracker Barrel, Dick’s, Forever 21, GameStop, H&M, Home Depot, Limited, Lowe’s, Michaels, Modell’s, museum stores, PetSmart, Sherwin-Williams, Sports Authority, Staples, Zara

Department Stores & Mid-tier: Bloomingdale’s, Dillard’s, JCPenney, Kohl’s, Macy’s, Neiman-Marcus, Sears

Grocery and Drug: Ahold, Aldi, CVS Caremark, Giant Eagle, Kroger, Meijer, Publix, RiteAid, Safeway, ShopRite, Walgreen

Dollar/Value/Off-Price: Amazing Savings, Big Lots, Dollar General, Family Dollar, Ross Stores, Save Mart, Supervalu, TJ Maxx

Online/E-commerce: Amazon, Café Press, Gilt, Zappos, Zazzle

Variety and Convenience: 7-Eleven, Circle-K

TV Shopping: HSN, QVC, ShopHQ

Mail Order: Oriental Trading, Signals

Other: Kiosks, on-site, vending, etc.


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