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TLL'S 2016 SURVEY

Toys/Games, Food/Beverage & Apparel Lead Growth on Products Side

For the second straight year, toys/games was the fastest growing product category, posting an 8.1% increase. Growth in toy and game merchandise has mirrored (and fed off of) the success of the entertainment/character property type over the past three years.

As in 2013 and 2014, connection to “A-list” entertainment properties like Frozen, Star Wars and Minions drove growth in the toy industry. According to NPD Group, while overall toy sales for the year were up 6.7%, movie-licensed toys, led by Star Wars, significantly outperformed the overall market with 9.4% growth. And it wasn’t just movies. Impetus for growth came from entertainment/character properties in other media including TV (Paw Patrol), video games/software (Minecraft) and YouTube (Shopkins).

Food/beverage product sales increased for the sixth year in a row. The 6.7% gain was the second highest of any product category, and even better than 2014’s 6.0% growth rate. The category is unusual in that retail opportunities are expanding rather than contracting, with distribution channels like gas stations and drug stores eager to expand their food and beverage offerings. And as one agent put it, “once brands are in the aisle, they don’t leave.”

Apparel sales rose 6.6% largely on the strength of sports- and fashion-based properties. The former influenced not just jerseys, the traditional cash cow, but also off-field apparel. As has become customary, the women’s segment grew the fastest. “Women’s pro sports apparel is no longer a sideshow,” explains a licensor. In addition to stalwarts like G-III’s Touch by Alyssa Milano, the leagues are enlisting well known women’s fashion labels like Victoria’s Secret and Dooney & Bourke. Fashion labels also spurred growth in apparel sales, especially active wear. The hot fashion trend in 2015, athleisure, was tailor-made for licensing, as exemplified by StellaSport, the collaboration between Stella McCartney and Adidas on a line of low-price fashionable athletic apparel for young women that debuted in January.

Accessories, the second largest product category behind apparel, grew a sluggish 1.8%. Licensed handbag sales actually declined (-1%). And if it were not for wearable technology like Apple Watch Hermès, jewelry and watches would have fallen too. “It was another bad year for fine jewelry,” laments one consultant. The silver lining was eyewear, the largest accessory subcategory ($4.7 billion), which grew 3.6%. The other accessory product categories were flat or down, including hosiery (2.5%), headwear (2.4%), luggage (1.7%) and scarves/ties (-1.6%).

Click here to read the full story, complete with a complete breakout of 2015 retail sales by product type and product category in the U.S. and Canada.

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