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Product Categories

Toys, Food & Apparel Lead Growth on Product Side

On the product category side of the $106.5 billion equation of 2016 licensed retail sales in the U.S./Canada, only three categories outperformed the average sector growth of 3.2%—toys/games (7.0%), food/beverages (6.0%), and apparel (5.8%). While most categories, including the top three, are down in growth from last year, overall upticks across the board indicate that the industry is slightly more stable than last year.

One important trend to note among product categories is the greater expansion of brands amongst low price points. Even as consumers are eager to shop at mass and discount retailers in search of a good deal, they are increasingly willing to buy products that appear to have a higher value proposition—i.e., branded goods that promise higher quality or some add-on value that ties in with the brand. These options can span QR codes with added digital content for an entertainment or video game brand, the assurance of knowing they’re buying a “higher value” brand with a limited-time or capsule-type marketing initiative, or just a feel-good aura that comes with supporting a favorite cause or brand.

Another trend that can be said to apply broadly is “health and wellness,” with some small exceptions for “feel good” products that might not necessarily uphold the broader trend. For example, toys and games are dominated by STEAM and other educational values. But as the popularity of collectibles and blind bags can attest, seemingly “frivolous” products provide nice spots of joy at low price points. While sales of candy are down and healthy foods are on the rise, they’re not totally gone as manufacturers look at smaller packaging. In fact, sales of candy-licensed products are up.

Click here for a breakdown of licensed sales in 2016 based on property types in the U.S./Canada.

For the third year in a row, toys/games is out on top in the rat race for most growth in licensed retail sales. The category is down from an unprecendented 8.1% growth in 2015, but at 7.0% growth last year, retail sales surpassed $8.0 billion in 2016. The brightest ray of sunshine in the greater toys/games category has been collectibles and blind packs (which also provided a boost to gifts/novelties). It is important to note that although growth has been staggering, blind backs still make up only a fraction of overall toys/games sales (estimates range between 5-10%). Increased interest in traditional toys and games, on the other hand, have softened the growth rate of licensed sales in toys/games.

Over the last five or so years, growth in toys/games has been closely tied to the growth in the entertainment/character property type. Their fates are less closely intertwined this year, thanks to greater entertainment-branded involvement in other product categories, such as apparel. But the biggest driver behind the growth of toys/games generally remains top-shelf licensed properties such as Star Wars, Pokémon, Trolls, superhero tie-ins to films like Batman v. Superman, and Finding Dory.

Retail sales of licensed food/beverage products were up for the seventh year in a row by 6.0% to reach $11 billion in retail sales, thanks in part to a healthy retail enviornment. Shelf opportunities are ever-expanding as non-traditional food retailers like drugstores and gas stations reposition themselves and those who already stock food agressively add space. Ecommerce is also a way for the category to grow, expecially as delivery options expand for perishables. The biggest money-making trend in food/beverages overall are products that tote non-GMO, natural, organic, etc. labels—which can often sustantiate their higher price by a “feel good” feeling consumers get for making good life choices.

Apparel is up by 5.8% for almost $21 billion in licensed retail sales in the U.S./Canada in 2016. Fashion and sports brands are still some of the biggest branded drivers, with other property types looking at fashion as a quick growth driver. One notable area of growth was music-branded goods, but, notably, only in vintage rock & roll and to a lesser extent, rap. Nostalgia and vintage were large drivers of growth with licensed products for adults, while children’s wear tended to focus on newer properties. The biggest trends in apparel for 2016 were streetwear and althleisure, which remained strong from 2015.

Accessories remained stable at 1.8% growth in 2016, reaching an overall $15 billion in retail sales in 2016 in the U.S./Canada.

  • Eyewear grew 3.4%, a rate which TLL expects to decrease as more fashion houses bring licensing in-house. But eyewear manufacturers are optimistic about licensed growth in the future, even as they lose deals valued at multi-billion dollars—they’ll just get licenses from other, new sources.
  • Handbags, backpacks, and messenger bags declined 1.0%. While part of this decline is attributable to the overall trend of fashion houses taking their programs back in-house, bright spots include entertainment licensing for TV shows.
  • Headwear continues to perform well at 2.5% growth thanks to the overall streetwear trend and sports licensing for caps performs well.
  • Hosiery was up 2.5% as fashionistas continue to search for more pop culture designs in leggings, stockings, and socks.
  • Jewlery and watches surprisingly went up 2.2%, largely thanks to strong sales of mid-ranged jewelry.
  • Luggage and travel accessories went up 1.1%. Compared to the world, sales are sluggish—but as travel and airport sales increase, North Americans are also eager to spend on their luggage.
  • Scarves and ties went down another 1.0%, but the decrease was less than 2015 in part thanks to a revived increase in men’s formal accessories.

Consumer electronics was up 2.9% as the sector grows to make ever-more products electronically connected. Licensing in kid’s electronic accessories, such as earphones and new categories like electronic thermometers, was up. And corporate brands are making headway into small kitchen and home appliances as well.

Home-related licensing was up overall, as consumers are eager to spend on home renovation and decorating.

  • Domestics were up 2.0%, largely in part because of coporate/trademarks and designer brands.
  • Housewares were up 1.3%.
  • Furniture and home furnishing was up 2.5% as maunufacturers and retailers tapped more fashion and surface designers for innovative ideas.
  • Hardware and paint was up 3.4% thanks to corporate/trademarks, celebrities, and fashion brands.
  • Gardening was up 1.3%.

Footwear was up 3.1%—this is the one space fashion licensors have not been vocal about pulling out of, and licensing for streetwear options like sneakers is up.

Health and beauty (HBA) licensing was down -0.1% overall to reach over $7.7 billion in retail sales.

  • Fragrance continued to trend downward (-1.5%) as celebrity and fashion brand licensing takes a step back in favor of non-licensed options.
  • Hair accessories were down -0.7%.
  • Cosmetics, nail polish, and other HBA products were up 1.6% as fashion, celebrity, and entertainment brands continue to make headway in the category.

Publishing grew 3.1% to reach almost $3.8 billion in licensed retail sales as bookstores increasingly sought out licensed offerings in an otherwise difficult retail year.

Gifts/novelties was down 2.9% in 2016 at $2.6 billion in retail sales. The category has slightly recovered from its -4.0% dip in 2015, but sales of products meant solely as gifts has not recovered. The bright spot were low price-point collectibles (that weren’t classified as toys) as other pop culture novelties.

Stationery/paper was the other biggest loser of 2016, with sales down 2.4% to almost $2.4 billion in retail sales. Although there are bright spots in certain niche markets where interest in traditional greetings has revived, the category is unlikely to recover to its previous highs are digital options take prominence.

Retail Sales of Licensed Merchandise, by Property Type, U.S./Canada, 2015–2016
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Product Category Retail Sales, 2016 Retail Sales, 2015 Change, 2015–2016 Share of Market, 2016
Accessories $15,185 $14,913 1.8% 14.3%
Eyewear $4,909 $4,748 3.4% 4.6%
Handbags, Backpacks, Messenger Bags $2,030 $2,050 -1.0% 1.9%
Headwear $1,412 $1,378 2.5% 1.3%
Hosiery $592 $578 2.4% 0.6%
Jewelry and Watches $3,571 $3,494 2.2% 3.4%
Luggage and Travel Accessories $1,463 $1,447 1.1% 1.4%
Scarves and Ties $152 $154 -1.0% 0.1%
Other $1,055 $1,066 -1.0% 1.0%
Apparel $20,764 $19,626 5.8% 19.5%
Consumer Electronics $5,572 $5,415 2.9% 5.2%
Domestics $3,550 $3,480 2.0% 3.3%
Food/Beverages $11,430 $10,783 6.0% 10.7%
Footwear $5,848 $5,672 3.1% 5.5%
Furniture/Home Furnishings $3,189 $3,111 2.5% 3.0%
Gifts/Novelties $2,614 $2,692 -2.9% 2.5%
HBA $7,760 $7,767 -0.1% 7.3%
Fragrance $3,942 $4,002 -1.5% 3.7%
Hair Accessories $262 $264 -0.7% 0.2%
Cosmetics/Nail Polish/Other $3,556 $3,500 1.6% 3.3%
Housewares $2,906 $2,869 1.3% 2.7%
Infant Products $2,722 $2,703 0.7% 2.6%
Publishing $3,761 $3,648 3.1% 3.5%
Sporting Goods $2,911 $2,826 3.0% 2.7%
Stationery/Paper $2,387 $2,446 -2.4% 2.2%
Toys/Games $8,057 $7,530 7.0% 7.6%
Video games/Software $3,069 $3,003 2.2% 2.9%
Other $4,813 $4,792 0.4% 4.5%
Hardware and Paint $333 $322 3.4% 0.3%
Gardening $229 $226 1.3% 0.2%
Pet Products $443 $421 5.2% 0.4%
Funerary $9 $9 -1.0% 0.0%
Automative Accessories $396 $384 3.0% 0.4%
Boats and Vehicles $524 $521 0.5% 0.5%
Other $2,880 $2,909 -1.0% 2.7%
TOTAL $106,538 $103,276 3.2% 100.0%


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