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Home-related Goods Boost Licensed Growth in 2017

Licensed retail sales grew just 2.3% in 2017 to reach $109 billion in the U.S./Canada—the slowest rate of growth observed since 2014, according to TLL’s Annual Licensing Business Survey. Licensed sales only marginally outperformed GPD; the U.S. economy expanded by 2.2% and the Canadian by 3% in 2017. This last year marks the seventh year of positive growth for the region—the business grew 3.2% in 2016 and 3.4% in 2015.

On the property type side of the retail sales equation, entertainment/character-based properties drove licensed retail sales in the U.S./Canada. Unlike previous years, however, the property type saw much less dramatic growth of 3.4%, compared to 7.6% in 2016 and 8.0% in 2015. It was only one of five categories to outperform the average growth rate with sports and video games/interactive/online a close second (both up 3.2%), followed by music (2.7%) and corporate trademarks/brands (2.5%).

As brands of all stripes continue to branch out into more product categories, large shifts in retail sales by property type have become less common. The biggest indicator of success in 2017 was the product category in which brands were licensed. It is important to note, however, that some product categories saw the number of actual unit sales drop in 2017 and only recorded a rise in sales thanks to increased pricing.

Seven product categories out-performed the overall average growth of 2.3% for licensed retail sales in 2017 for the U.S./Canada. But that means that the spread was much wider—retail sales of licensed footwear contracted 4.3% from 2016, losing more in value than gifts/novelties (-2.2%) and stationery/paper (-1.5%).

Home-related goods raised a combined $620 million in licensed retail sales in the U.S./Canada in 2017. These five categories grew a combined 6% from 2016—outperforming the average rate of growth by 3.2 percentage points. Growth was fueled by sustained consumer demand—thanks to the economy, Millennials are moving out of family homes (or crowded roommate situations) and everyone else finally has the means to take up that home renovation project they’ve been putting off for years. Social media channels such as Pinterest and Instagram led trend discovery among an audience who increasingly sees themselves as hands-on home designers. The do-it-yourself trend also fueled purchasing activity in functional home accessories and hardware. Surprisingly, there was a dip in related sub-categories such as home fragrance and decorative novelties.

Over the last couple of years, the merchandising window for home-related goods has gotten much smaller; to keep up with demand, manufacturers and retailers are tapping more fashion, home, and surface designers for innovative ideas. But as the popularity of social media might imply, brick-and-mortar showrooms are not strictly necessary. Amazon recorded double-digit sales growth in its home categories in 2017. Corporate and magazine brands also saw a boost in sales by leveraging their respective relationships with consumers into “lifestyle” brands and broader community platforms.

  • The furniture/home furnishings segment was up 6.6%, housewares were up 6.2%, and domestics were up 5.8% for largely identical reasons—an increase of new brands entering the space, established brands building more extensions, and sustained consumer demand for fashionable, functional goods.
  • Hardware and paint was up 3.5%, in part because of increased licensing activity for existing brands moving into complementary segments and the increase in women consumers for DIY projects.
  • Gardening was up 3.3%. This is a segment TLL expects to grow as new innovations in the sub-category allow for packaged live plants to be sold as impulse.

Retail sales of licensed food/beverage products were up for the eighth year in a row by 6% to reach $12.1 billion in retail sales after growing 6% in 2016 and 6.7% in 2015. Shelf opportunities are ever-expanding as retailers not traditionally associated with food, like drugstores and gas stations, have positioned themselves as a convenient, fast, and quality source of on-the-go snacking consumables. Retail sales of healthy foods and beverages (non-GMO, natural, organic, etc.) are growing at double-digit rates and can carry a higher price premium among consumers, who are willing to pay more for perceived quality. In part because growth is so sustained in this category, competition is intense.

Health & beauty aids grew 2.3% to reach nearly $8 billion in licensed retail sales. As in home-related goods, this space is being rapidly re-invented by ecommerce shoppers, social discovery and marketing, and an influx of brands tapping new niches. Unlike in entertainment/character, beauty brands tend to embrace the competition as sparking diversity in a high growth, high potential space. The demand for healthy, all-natural, and convenient goods is no less in this category than for licensed food/beverage.

Retail sales of licensed toys/games contracted 4.4% in 2017, losing $355 million in value from the previous year to reach $7.7 billion. Licensed goods were particularly hard hit by economic factors like the Toys ‘R’ Us bankruptcy; the general market is expected to be flat at 0-1% growth in 2017, according to the NPD. Growth largely came from manufacturer-owned brands, which are expected to launch their own licensed extensions in 2018.

One area that did not perform well in 2017 was the broader infant category—in part because of declining birth rates, and in part because of an increasing tendency of new parents to construct a “brand-free” and “label-free” environment for their charges. Modern families want less distinctive, cool color swatches; fashionable, subtle patterns; and simple, uncluttered baby rooms. Brands that have established trust and credibility, however, will do very well.

Retail Sales of Licensed Merchandise, by Product Category, U.S./Canada, 2016–2017
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Product CategoryRetail Sales, 2017Retail Sales, 2016Change, 2016–2017Share of Market, 2017
Handbags, Backpacks, Messenger Bags$2,094$2,0303.2%1.9%
Jewelry and Watches$3,653$3,5712.3%3.4%
Luggage and Travel Accessories$1,491$1,4631.9%1.4%
Scarves and Ties$154$1521.0%0.1%
Consumer Electronics$5,683$5,5722.0%5.2%
Furniture/Home Furnishings$3,399$3,1896.6%3.1%
Hair Accessories$265$2621.0%0.2%
Cosmetics/Nail Polish/Other$3,691$3,5563.8%3.4%
Infant Products$2,722$2,7220.0%2.5%
Sporting Goods$2,986$2,9112.6%2.7%
Video games/Software$3,118$3,0691.6%2.9%
Hardware and Paint$345$3333.5%0.3%
Pet Products$474$4437.0%0.4%
Automative Accessories$409$3963.5%0.4%
Boats and Vehicles$526$5240.5%0.5%


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