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Retail Sales

Economics of Licensing

As long as we’re keeping track of the licensing industry, we also have to recognize it’s size—and it turns out that it’s a small world after all.

In 2016, licensed retail sales in the U.S./Canada made up just 0.005% of all retail sales. But while the fraction is small, the growth rate of licensed sales has consistently outperformed general growth.

On the right, we track the share of licensed retail sales in the U.S./Canada as a percentage of total retail sales. Note that the total figures are measured in trillions (and that we’re starting the scale at $1,000 trillion). Licensed retail sales are measured in billions.

The total retail sales figure isn’t entirely accurate: for example, the Canadian figures do not count ecommerce sales. As of 2016, Statistics Canada estimates that online sales still account for only 2.5% of the total, compared to 8.2% stateside, according to the U.S. Census.

Comparing the growth rates of total versus licensed retail sales in the U.S./Canada, however, gives us a broader picture. Although the licensing industry took a much bigger hit after the Recession, it recovered much more quickly.

Closeup: Apparel

There are additional issues with comparing the total retail sales figures because they count sales for consumer products that aren’t typically licensed. For examples; while there exist branded automotives, they aren’t a big part of the licensing picture.

So, we also measure one available subset of retail sales—those made in clothing stores. We compare only licensed apparel sales for simplicity, although clothing stores also may sell licensed accessories and, to a smaller extent, footwear.

While the share of licensed sales is an order of magnitude higher than that for general market, note that the scale of the chart below is also skewed to increase visability.

As in the total market, licensed apparel sales have been outperforming growth rates of retail sales made in clothing stores. Since 2011, while general growth has declined, sales of licensed apparel have gone up. The slight dip in growth in 2016 is a function of flat growth overall (-0.02%).


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