It outlines the value of the Licensing business model for IP owners: speed, quality and security.
In this model each party plays its role using its know-how: the IP owner manages the brand by setting the targets, the strategies and providing creative assets including styleguides and by selecting the licensees according to its own criteria. The licensee will deploy its expertise in product development, sourcing and marketing to implement the agreed business plan.
The eyewear ecosystem is highly dependent upon the Licensing model: between 60 and 80% of the products are licensed and there are over 2500 different licences on the market coming form sport, fashion, entertainment. Yet there are a handful of manufacturers who take on many licences to create a comprehensive portfolio of brands in order to cover all of their target audiences. This allows them to optimize their sourcing and capital investments (licensing contracts are usually for 5 to 10 years) and improve their margins.
Retailers too see a benefit: they only have to deal with a few suppliers to cover all f their product needs. The consumer also is satisfied because he gets a broad choice of options including now with Converse, the opportunity of wearing his/her favourite brand from toes to head!
Ultimately for the IP owner Licensing is an attractive solution which increases brand penetration, improves revenues and bottom line and increases the value of the brand in the balance sheet.
All of this faster and with little risk.
