Monday, January 26, 2015

Snippets Atlanta 2015



Well, we made it past the normal incubation period so apparently managed to get through another Atlanta without catching colds or flu. This year had us worried with all the hoopla about the expanding pandemic and the ineffective vaccine. Gettin’ soft, I guess. Or just gettin’ old… nah, couldn’t be that.

It was a good show, not a record setter but now that we have sent out a bunch of stuff to a bunch of people we are maintaining our optimism. It seems a lot of the licensees are still reacting to the kick in the teeth of the last few years and are concentrating on stabilizing their business while they adapt to a changed market. Inventory control, cash management and staff reductions are still at the forefront for many, and necessarily so. The focus will have to turn back to growth at some point, and that will be good for licensors because the only enduring way to grow a category is through new product and new customers, which directly translates into more opportunity for fresh ideas and good design. Of course not everybody will get there at the same time, and then there’s always the retailer wildcard (since that’s ultimately where all of the decisions come from) but I think it’s what companies will look to next in the progression. Grow or die, you know.

So: Snippets. Lot’s of them. Last January’s unbridled optimism seems to have given way to guarded optimism, as in “things are going well but we’re not out of the woods”. Some people are happy, some not, but it seems like most everybody is still in the game. And really, what more could you ask for?       

  
“People are more practical and less indulgent now and that has definitely affected our market.”  – a sales manager

“Artists need to realize that not every saying works as a wall plaque. They need an audience.” –an agent

“Nobody should ever get into the apparel business because of the huge inventory required.” – somebody in the apparel business

“This is so funny but I don’t know what to do with it.” – an art director

“You can’t make anything for children under three anymore, the entire category has basically been eliminated by safety concerns.” -CEO of a gift company

“That’s often how it works – they tell you it’s great and are thinking about developing a program. Then they disappear and stop answering emails, and it’s generally because some new shiny object has popped up in front of them.” – an agent

“We like it but don’t think it can work. Anytime you have to explain a product past a half-dozen words it becomes difficult to market.”   
- gift company manager

“We are not putting anything new into production yet, we would need more positive market information to justify the inventory risk.” – a gift company division manager

“Sometimes we reject portfolios because we can’t see who the person is – the art may be cute but there’s no story to follow.” – an agent

“It’s a very clever idea, would be a pure impulse buy. This is a soar or crash item, I only wish we knew which one it will be.” – a licensee in a product meeting

Ronnie: “So I noticed you don’t have any women’s lines. Is that by design?”
Manufacturer: “No, it’s probably because all our lines are picked by three men.”

“Every little variation or new product in the market is not necessarily a trend.” – an agent

“It’s an old look but not old enough to be retro – so it’s just old.” –comment in a hallway about a new product line

“It’s funny but year after year the big lines are still the big lines.” 
–an agent

“She’s going to find out very quickly that just because you send some art out, that doesn’t mean they will pay any attention to it. There’s a lot more to it than that.” – an agent who just lost an artist

“Tell them I already have their stuff.” – a licensee blowing off a meeting with us

“Management hates these, but women are lining up and taking them off the displays as we set them, so I guess they’re wrong.” 
– rep overheard in a showroom

‘If you have something good send it anytime. We don’t do call-outs anymore, we just got too much junk.” - a licensee

“So here’s the problem: we have good buyer data from our own DTC (direct to consumer) website, but if the reps don’t agree with us, or don’t like it, it’s still not going to sell.” – owner of a gift company

“We meet with a lot of different artists, and unfortunately not a lot of those artists think it through to the product.” – creative director at a major gift company

“When words are the main feature I think people get tired of reading them. Patterns work better for us.” – in a meeting

“It's not so much the molds and resin as it is the detailed painting because labor costs have gone up so much in China. We use a lot more printing now.” – gift company owner

“I’m climbing this ladder to get there, but I’m not sure where “there” is anymore.” – a widely licensed artist

“The problem with introducing textiles is they have to sell well right out of the chute because the MOQ’s (minimum order quantity) are so high. Management wants items to be selling well in six months, and to sell through in less than 12, so taking 15 to 18 months to build a program is no longer an option.” – a sales manager at a gift company

“I like the sayings but the art is not where we will need it to be.” – an art director saying no

 “Unfortunately they needed to draw a line somewhere, and they did it by sales numbers so it becomes arbitrary what skus stay and what skus are dropped.” – a company mgr explaining line cuts

“Garden flags are a dying business.” – from a gift company
“Our flag biz is up 39% over last year.” – from a flag company

“Product needs to be fun. If it’s fun they will buy it.” – gift company owner

“They’re all looking for something that looks like something else successful.” – an artist

“It  has been good, and that’s kind of a relief. I think we’ve got it this show.” – president of a gift company

“I look for products that I can sell for 19.99 or less, but they need to look like they cost a lot more than that.” – a small retail shop owner

“As a creative in this business I have to be working all the time, and artists who don’t get that are done for.” – a successful licensed artist

“It takes a lot of energy to bring a product line onto the market. You need to create a wave that picks up not only your own people but the reps and retailers as well. If you can do that – and then it actually sells too – well, then you’ve got something.” 
– gift company owner

And then my favorite:

“No owls. We’re done with owls.” – in a meeting
"Any new owls? Owls always sell well if they're cute." - in the next meeting


Tuesday, January 13, 2015

Atlanta – A Study in Contrasts…and Not



Even when you’re from Minnesota (15 years ago and counting) a temp of 10 degrees accompanied by a howling wind is freakin’ cold. Welcome to Atlanta in January. Fortunately it didn’t last, a few days later it was up into the 40’s, however we were quite happy to get back to Florida: 80 degrees and humidity. Ahhhh.

The January 2015 Gift Market was good. Noticeably better than 6 months ago. A lot like one year ago. Which concerns me a little bit, because one year ago everybody was trumpeting to the heavens what a great market it was, setting sales records and selling like crazy. (See here). On our end they were looking at new collections, expanding current ones and asking for more. Then… nothing exceptional happened. The following July market was ho-hum and just OK, traffic was down and in between those dates the expanding lines didn’t expand. We sent out a ton of designs after Jan ’14, but then some of those “sure-thing” projects became less sure (not that THAT is anything new…). So, while it’s always great to experience an up market, we have worked a few dozen of these and I am not remodeling the office just yet. Keep your fingers crossed, do more good work and ask me in July how January went.

ATL Bldg 3 atrium
That being said, we did have a few observations. Traffic was good but still not up to previous levels; elevators were sometimes jammed, some ladies’ rooms had lines and occasionally people were sitting in the hallways eating the free lunches. As opposed to all of them all the time, as is the case in a really busy market. Everybody we talked to, bar none, said it was a good market. Our clients are planning things, but in a more cautious way: they (mostly) know what they want and aren’t asking for a lot of fluff to consider later. Instead of “maybe” we heard a lot more “no”, which actually is a better answer. A number of them have reduced their footprints in the rep showrooms, streamlined their operations (and unfortunately staff) and tightened the purse strings on product development. Apparently lessons were learned over the last few years.

ATL Bldg 3 atrium
There’s always a little bit of everything across the showrooms, but as we walked we noticed a lack of man cave stuff, Duck Dynasty, moustaches and non-traditional Christmas. There is definitely a nod toward rustic and homespun, coarse fabrics, hand stitching and earth tones. There was also more artist promotion and artist signings, which is good and we hope will continue. What I wish wouldn’t continue is the “me too” products that show up in so many showrooms. Everywhere you turn someone has their version of Kathy’s Primitives, or Kelly Rae, or Glory Haus, or Natural Life, or Simply Southern, or anything that has sold well. We spend a lot of time going “Hey – that looks like (fill in the blank)” - but then it’s not. Just another reason to keep those fresh ideas flowing.   


So there ya go—another successful ATL market, and in the words of one of our clients:
“I think we’ve got it this show.”

Sounds good, I'm in.

Sunday, January 4, 2015

Exploring 2015



I always wonder why birds choose to stay in the same place when they can fly anywhere on the earth, then I ask myself the same question.
– Harun Yahya


So here we are - one day we woke up (in Dallas, TX, fyi) and the calendar has turned over to 2015, and if you’re like me you wonder how the hell that happened. Wow.

Our Word of the Year last year was “FOCUS”. And for the most part we did, starting with a hard look at our basic business model and how can we make it better. The answer? Change it. Do more of what works and stop doing what doesn’t (anymore). Search for the best, match it up to the results and set the rest aside along with old traditional method. We didn’t stop there, nothing was off limits right down to how and where we work and live, and how that affects (and effects) a creative life. More on that someday.   

And now we’re into a new year. The market for licensed art has not diminished as much as people like to say it has, there’s plenty of opportunity. The fundamentals are the same – you still need a creator who has mastered their tools to create products that tell a story. But the percentages have changed - what that story is, how it’s delivered and what will be paid for it is in constant flux.

But here’s a secret: it has always been that way. We focus in on our little microcosm of “art licensing” and compare today to how it “used to be” a decade ago and of course it’s different; some things are more difficult, some less. Easy digital submission means the bandwagon is getting crowded, to the point where clients are tuning out all the noise (along with some of the substance because when everyone has a megaphone no one gets heard). Advances are gone, shelf time is minimal and trends are vague. Just as no one can predict the future, in today’s hyper-active paranoid retail market no one can predict licensing success either. But it takes more effort now to get less, that much we DO know. Which is pretty much the same lament heard since the dawn of commerce.

So this leads us to “what now?” I think in a rapidly shifting market artists that want a licensing career need to become light on their feet. Change the statement “I do this…” to “I tried this…”, and use the phrase “well, that didn’t work” more often. The ability to take a step back, evaluate the impact of your work on the market and then allow the results to impact your work will be paramount.
This is an important facet of our Word for 2015:

EXPLORE.

It’s more than just sales numbers however. It’s all the other words we did not choose as well: interesting, exciting, intriguing, exceptional. It’s moving off the path of what used to work and how we used to do it, and heading down the road of what we LOVE to do--what’s interesting, exciting, intriguing, exceptional… because when you do those things the story shines through. And if the story doesn’t resonate with the market then we go looking for a different story. Learn to move on - grinding yourself into dust by continually executing on a plan that doesn’t work is such a waste of talent and opportunity.

EXPLORE.

It’s a big world. Passion is not supposed to be a prison. It’s the fire that powers you and you get to steer it, not the other way around. Just as creativity is not random, neither is your passion and you can re-direct it to find a workable audience. Ignore any voice that says you can’t including your own.

EXPLORE

In business, the chances of getting it exactly right the first time are infinitesimal. There is a reason concepts like pivot, iteration and minimum viable product are all the rage – because that’s how it works, that’s how you get there. It’s a process. “Well, that didn’t work” is much more than just an acknowledgment, it implies a course of action: Next!

EXPLORE

Because you love it. Open oysters looking for pearls, search for the tenth Muse, throw things against the wall because it’s fun to throw things against the wall. Work your idea machine. Businesses go through hundreds of ideas to get to the right one, so it’s crazy to believe that it will be different for you. Continual experimentation is the new normal. You want to create something magical to rise above the clutter, and once you get there it’s temporary, so keep that river flowing. The worst you can hear is no, so get out there and EXPLORE!

Happy New Year!

Friday, September 26, 2014

We're Tee'd Off



We spent a couple days in Orlando attending the Surf Expo and the Imprinted Sportswear Show which were co-located in the ORL Convention Center last week. The hundreds of surfer dudes, awesome ski boats, skateboarders and strolling bikini models quickly convinced us that our best beach days are past but we still gathered priceless information on what we can target, and perhaps even more info about what will never work for us. Both are good to have.

Over the years it has seemed like every submission we receive suggests that their art, among other things, would be good for apparel. Which in reality means tee shirts (and sweats and caps). Unfortunately, people, that falls into the "easier said than done" column:

The decorated tee business is weird. It’s a big industry but the VAST majority of it is local, both in subject and production, and often it all gets lumped into a category commonly called “resort”, where the tee decorations can cover not only regional locales but schools, sports, outdoors anything, hobbies, lifestyle subjects, humor, pets, brands and more. There are thousands of what are called “apparel decorators” ranging from one man shops up to big factories capable of pumping out thousands of shirts. Over the last few years large POD websites utilizing direct-to-garment printing, along with improved technology that’s easier to learn and use have brought stiff new competition to the game while at the same time order sizes and market times have been dropping. Sound familiar? Most decorators (who sell wholesale) sell their tees to boutique level stores and that basic model has not changed for years. They print up samples, take them to shows (or use catalogs) and only produce what is ordered. By necessity. Decorated apparel is difficult because of the inventory challenges – there are many sizes, colors, styles and fabrics to deal with even for a tee shirt, and it is impossible to guess what will sell and what won’t with enough accuracy to keep you in business - so they don’t. It’s also hard for the retailers as they need to lay in an inventory with significant space requirements, and if it does sell well the most popular designs/sizes sell out first so they need to reorder frequently to fill in the gaps. And then there’s that whole trend problem…   

Mass market tees are a bit different, they are almost always brand based and often produced overseas in a large run from cheap stock so they can be sold for ridiculously low prices. Tough business to get in or to be in.

So, what does this mean for a potential licensor? Basically, it is difficult (at best) to make decent money licensing onto decorated apparel unless you have a large platform and the potential for brand status. There are still a few decorators out there who will license individual designs and they are very picky about what they choose. We sat with one (a client) at the show chatting about how the biz has deteriorated over the years – like many licenses, it now pays a few hundred dollars instead of a few thousand. But, they do keep selling and it all adds up, so not all is lost!
I quote: “Back in the 80’s and 90’s we couldn’t do anything wrong, but now – now we’re just trying to figure out what’s next and keep the doors open”. 

Yeah, ain't it the truth.

Wednesday, August 27, 2014

Who’s Is That Behind the Curtain?



Periodically somebody in an art licensing forum will ask for some “manufacturers” to post their opinion on some subject. Fair question, but there is never a response for a couple reasons: there’s only a handful of licensees paying any attention to the groups, and most of those that do will never expose themselves because of the flood of inquiries that will follow.  I’d say most licensees are bewildered by all the social hoopla surrounding art licensing because all they want is to source a component of their product at a fair price without a lot of hassle.

The “Artist” licensing community is very different from the “Art” licensing community. The first is an empowering peer group, unusually supportive, generally helpful and a uniquely wonderful aspect of this business. The second, well, actually the second isn’t a community at all, we just like to think that it is. The vast majority of your licensee clients will not know each other, in fact often don’t even know OF each other. A few exceptions do exist, such as people who have moved between companies or participate in trade organizations such as the GCA, but it’s a small number. Things are a tad different when you head into brand territory, not because they are exchanging information but because most brand activity is high profile and ultimately an effort to drive sales, hence they maintain an acute awareness of their competitors. But rest assured Disney is not giving licensing tips to Nickelodeon.

In the Artist community the focus tends to be on the artist’s vision and journey, but on the licensee side of the table it’s ultimately about cost, efficiency and product performance on the market, and this is where the wheels start to come off for some people. Don’t get caught up in assuming, and then expecting, that your interests match up perfectly to those of your licensees. While they may align well enough to make a saleable product (they better) many artists are dismayed to discover that ultimately the client’s focus is always on the outcome, which is to build, ship, and sell at a profit.

The “licensing out” business model can have many variations but that one constant - that licensees on the “licensing in” side will make decisions based on THEIR endgame – is always at the forefront. Opportunities will not be doled out in equal pieces like cake at a party, there’s nothing fair about how it works so don’t drink THAT Kool-Aid. No one has the “right” to be successful licensing their work, you only have the right to try - and the right to work smarter and harder to get more of that cake.

Mmmm - love me a big slice of angel food…