Opinion | Channel hopping: Netflix becomes latest global brand to adopt direct to consumer

With Netflix becoming the latest global brand to adopt a direct to consumer model for its portfolio of licensed merchandise, consumer products, and original series brand extensions, industry insights and intelligence expert and seasoned market analyst, Utku Tansel takes a look at the ever-strengthening trend of tapping into the consumer directly

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Netflix’s announcement to unveil an online shop for show-themed licensed merchandise has definitely raised some eyebrows. The entertainment giant’s new platform will sell limited-edition show tie-in apparel, merch, and other collectables. Among the items that will make a debut this month are streetwear and action figures inspired by anime series Yasuke and Eden, as well as apparel and decorative items based on Lupin in partnership with the Musée du Louvre.

There are also other exclusive products in the pipeline which will leverage the licensing power of its popular titles such as The Witcher and Stranger Things. Furthermore, there will be a new Netflix logo-wear from Japanese fashion house BEAMS.

As the escalated streaming wars take their toll on the company, Netflix.shop, which was developed and launched with the e-commerce site Shopify, should provide a brand new revenue source, and will witness an expansion of a product line that already offers through partners like Walmart, Amazon, H&M, Sephora, Target, and others.

Now available in the US, Netflix’s new online is set to expand abroad over the coming months.                   

With its recent move, Netflix’s aims to ride on the rising popularity of Direct-to-Consumer (DTC) which has been one of the emerging retailing models in recent years. The ongoing pandemic has accelerated this considerably, prompting many companies to shift their models.

2020 saw a number of brands increase their focus and investment in developing their DTC offerings. Spending more time at home has undoubtedly encouraged more consumers to embrace DTC particularly in grocery and clothing. In the fashion space, VF Corporation (The North Face, Timberland) acquired Supreme. It was reported that over 60 per cent of the company’s revenue comes from its online operations, and VF announced a cornerstone of its strategy will be expanding the brand’s Direct-to-Consumer offering.

Meanwhile, in the toy industry, Hasbro and Mattel expanded their DTC operations in order to meet the growing demand for e-commerce.

As I investigated in my “Retail and E-commerce: The Impact of COVID-19 in the UK” Opinion piece previously, the COVID-19 pandemic has transformed shopping behaviour completely making a profound effect on the retail industry.

While COVID-19 continues to cause significant disruption to bricks and mortar retail, DTC is in a good place to be one of the headline trends for 2021. It is the preferred choice for many businesses and brands already as they increasingly become more agile, more authentic and produce more personalised products en masse.

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Utku Tansel has 17 years of success in driving global thought leadership, project and content management, delivering strategic business intelligence and actionable insight to major international companies, retailers and financial institutions.

With a solid market research background, Utku regularly writes for leading industry publications including ToyNews and Licensing.biz focusing on the most recent trends and developments.

A sought-after speaker, he also presented at world-renowned industry events including Licensing International Mind Mix Executive Conference, Hong Kong Toys & Games Fair, PlayCon, World Congress of Play, and Walmart Global Toy Summit highlighting key findings from the latest global research studies.

Coastal and historic towns thrive amid “strongest sales growth of the pandemic” for UK high streets

Pent up demand for in-store shopping, coupled with the reopening of hospitality and enduring appreciation of the return of non-essential retailers, has helped the UK’s retail scene to the strongest sales growth of the pandemic.

On a total sales basis, sales have increased 10 per cent in the four weeks covering May 2nd to 29th this year, against a decline of 2.7 per cent for the same period in 2019.

Meanwhile, footfall across the UK’s retail destinations has risen by 11.6 per cent week on week. High Streets witnessed increases of 17.4 per cent versus 8.7 per cent in shopping centres and just 2.3 per cent in retail parks.

However, it is UK holiday destinations such as coastal and historic towns that have witnessed the greatest increases, with a 37. 1 per cent rise in coastal areas, and 24.8 per cent rise in historic places.

Helen Dickinson OBE, chief executive, British Retail Consortium, said: “Retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential retail’s own return.

“Pent-up demand for the instore shopping experience, as well as the first signs of summer weather, helped retail to the strongest sales growth of the pandemic.

“There is a growing sense of consumer confidence, boosted not only by the widespread uptake of vaccinations and testing, but also retailers’ own significant investment in safety measures.”

Dickinson has explained that large cities remain the hardest hit by the pandemic, with many consumers continuing to work from home and increasingly choose to shop local. It has prompted new calls for a re-evaluation of the role of the high street.

She said: “Now is the time to consider what our future high streets and town centres will look like a decade from now. We must adapt to these changes, not only to build back better, but also to build forward.

“With vacancy rates still rising in many parts of the country, we must reimagine how we integrate residential and commercial property, allowing us to build stronger local communities that encompass leisure, retail, services, and homes.

“This will require retailers, property developers, and local government to work together and plan city centres that cater to these changing demands and truly innovate the high street model.”

A summer of cautious optimism

Elsewhere, it is the change in weather combined with the late May bank holiday that has seen shoppers take to the high streets and shops of some of the UK’s coastal areas and historic towns, as staycation holidaymakers fuel an ‘increase in footfall that surpassed that in any other type of UK high street.

According to Springboard insights director, Diane Wehrle, “the fact that the bank holiday occurred a week earlier than in the previous two years meant that footfall in both coastal and historic towns was actually higher last week than in the same week in 2019.

“Whilst the attraction of coastal and historic towns to visitors meant they benefitted the most last week, there was still a significant rise in footfall in central London and in other regional cities across the UK, while the most modest increases once again occurred in more local high streets.”

Paul Martin, UK head of retail, KPMG, said: “Retailers now face an interesting few months as they assess how they best entice their customers back to stores and what the right blend of offline and online will be as spending patterns settle in a post Covid world.

“With the prospect of the full lifting of Covid restrictions coming into force this month, there will be increased competition for share of wallet as consumers focus on those leisure and hospitality activities that have been denied to them due to lockdown.

“It is a summer of cautious optimism for many retailers, who will be hoping that the continued success of the vaccine roll-out and an improving economy will offer scope to spark a big surge in consumer spending.”

Up to 70 of the UK’s shopping centres face closure and redevelopment due to shifting consumer habits

Around 70 shopping centres across the UK are facing the threat of closure owing to the longer lasting impact of the coronavirus pandemic and the lean into online shopping over the past year.

Reports suggest that over-expansion of retail space must also be factored in when assessing the current health of the UK’s shopping centre sector, with the future of some ten per cent of the UK’s 700 shopping centres now in the balance. It is believed that a number of the centre built in the 1970s and ’80s will be at least partly redeveloped into homes, offices, or for other uses.

According to a Local Data Company (LDC) analysis of centres in England, Scotland, and Wales, at least 30 shopping centres in the UK are now at a minimum half empty, including five that are now more than 80 per cent vacant. A further 34 have between 40 per cent and 50 per cent of their shops vacant, with at least 10 shops in them.

Shopping centres across the UK have been dealt a blow by the coronavirus pandemic that has not only seen forced lockdowns shut major retail destinations like themselves, but has also driven consumers to online shopping, as well as a new preference for staying local in the midst of social restrictions.

“There’s no doubt that the Covid-19 pandemic has exacerbated many of the challenges we were seeing across the physical retail environment, with shopping centres having been particularly exposed to categories in decline, such as fashion and casual dining,” LDC commercial director Lucy Stainton said.

It’s according to the head of retail research at Knight Frank, Stephen Springham, that 10 per cent of the UK’s shopping centres are no longer viable. Springham also believes that a further 20 to 30 per cent will need a ‘significant overhaul’, with shops retained, but large portions of each given up for homes, offices, and other uses.

A number of the UK’s shopping centres already set for development include the likes of Nottingham’s Broadmarsh, where demolition starts this month, Stockton’s Castlegate, the Riverside Centre in Shrewsbury, the Chilterns Centre in High Wycombe, and Nicholsons in Maidenhead.

The world’s only Harry Potter flagship store opens its doors in New York

The doors to the new flagship Harry Potter store in New York have finally been opened to the public, greeting fans with a 220-pound model of Fawkes the Phoenix, and a host of magical creatures and hand-made props.

Billed as an ‘immersive retail experience’ for the Harry Potter global fan base, the Harry Potter New York store finally opened its doors to the public last week, wowing them with themed retail zones, including an area inspired by the Dark Arts, complete with Voldemort’s horcux, Nagini, bursting through the ceiling.

The world’s only Harry Potter flagship store boasts 15 of these themed areas to explore, playing host to thousands of products. Fans found themselves immersed in areas inspired by Honeydukes to find Bertie Bott’s Every Flavour Beans and Chocolate Frogs, before stopping under the Dirigible Plum tree to find their favourite creature soft toy.

Customers were even invited to step into Hagrid’s boots to see how they measure up and duel other customers at the store’s interactive wand table.

”We’re delighted to be welcoming fans to Harry Potter New York for a completely new shopping experience,” said Sarah Roots, EVP Warner Bros. Worldwide Tours and Retail. “Not only will visitors find the largest range of Harry Potter and Fantastic Beasts products under one roof, they will also get to discover up-close some of the hand-crafted props that were seen in the films, use our unique photo opportunities and experience the incredible theming throughout the store.”

Harry Potter New York has a virtual queueing system in place. When customers visit the store, they will scan a QR code to join a virtual queue and return when notified. Harry Potter New York is open from 10am to 9pm Monday to Saturday and 11am to 7pm on Sundays.

Pop culture retailer The Geek Retreat on track to open 60 of its planned 100 stores this year

Geek Retreat, the geek culture retailer, gaming café and events venue rolled into one, is on track to open 60 of its planned 100 new stores on UK high streets by the end of 2021, creating 360 jobs around the country.

The franchise is on track to meet its previously announced target of a total of 100 new stores in 2022.

The Geek Retreat franchise, which opened its first store in Glasgow in 2013, now has 27 stores, with the newest in Truro, Cornwall, which opened last week. It has stores in town and city-centres such as Glasgow, Newcastle, Leeds, the Wirral, Northampton, Chelmsford and London, which stock geek culture merchandise like comics, posters, clothing, figures and memorabilia as well as games and trading cards.

Fans of everything from Marvel and sci-fi, to Warhammer and Pokémon – and even traditional board games, are welcome at the stores and play their hobbies in the café.

New stores are due to open in a number of locations around the UK, including Blackburn, Hereford, Exeter, Lincoln, Ipswich, Bedford and Exeter, in the next couple of months.

To support the growth of the business, the retailer has also announced a series of new hires, including four franchise development managers who will support the expanding geographical footprint of the brand. A further 25 employees will join the head office team in new roles such as New Store Openings Managers, Event & Gaming Specialist and Head of Digital & Ecommerce.

Following the recent brand relaunch, Geek Retreat has also developed and launched a new menu in consultation with its franchisees. The full menu roll-out in partnership with leading food service firm, Booker, sees the introduction of a high-quality menu with vegetarian, vegan and kid’s options, ensuring there’s something to suit everyone’s taste.

Peter Dobson, chief executive of Geek Retreat, said: “We are pressing ahead with our expansion plans and are on track to meet our target for new stores. Despite the impact the pandemic has had on the high street more generally, the Geek Retreat proposition and unique culture has proved particularly resilient and has shown us how important it is for people to have a safe please to visit and to share their interests with friends as part of a community.”

All stores commit to a COVID-19 secure environment, with strict social distancing and hygiene measures in place, to give customers extra piece of mind that they can visit in confidence.

BLE’s Retail Mentoring Programme sees record-breaking numbers ahead of application closure this week

A record breaking 84 delegates from 21 retailers have already signed up to this year’s Brand Licensing Europe’s Retail Mentoring Programme, with applications still being accepted until the closing bell on Friday, May 28th.

The influx of participants in this year’s programme include eight new comers to the scene, with international retailers GameStop and Bershka among the course’s first ever European brands. The increased uptake from overseas retailers has been credited with the offering of a fully virtual as well as hybrid option for this year’s programme.

New retailers to have signed up for the free-to-attend, CPD-accredited course include not only GameStop and Bershka, by Maqio, Merlin Entertainments, RSPCA, The Hut Group, Vanilla Underground, and ZSL. The programme boasts a vast number of high calibre alumni, including the likes of Marks & Spencer, John Lewis, Halfords, Ann Summers, Toymaster, and The Entertainer.

Arleene Rodríguez, licenses department coordinator and buyer at El Corte Inglés, took part in a trial run with European retailers in 2020.

She said: “I would most definitely recommend the Retail Mentoring Programme to other retailers because it’s a great experience. Not only do you get to learn very insightful and helpful things to better understand the industry and how it works, but if you already have some knowledge, you’ll get to review many concepts, see things in a different or new perspective, and of course get to meet a lot of people from the industry that also love the licensing world and can help you see the potential in your business.”

Retail Mentoring Programme delegate benefits include:

  • May: One-hour introductory meeting (virtual)
  • 17 – 18 June, over two half-days: Licensing Essentials Course delivered by Licensing International (virtual)
  • June: The option to virtually drop into Max Publishing’s Licensing Awards judging day and cast a vote
  • August-October: Spend around 2.5 hours on a personalised brand owner experience day (live and/or virtual)
  • 5 November: Half-day Licensing for Retail seminar (live/virtual)
  • 17-19 November: VIP admission to Brand Licensing Europe, where retailers can spend up to three days at Europe’s leading licensing event (live/virtual)

Anna Knight, VP of licensing, Informa Markets, said: “It is amazing that we’ve broken records and over 80 retailers will be joining us on the Retail Mentoring Programme for 2021. It’s no secret that non-essential retail has struggled throughout the pandemic, and the number of entries we have received is reflective of the difference brand licensing can make at retail and the growing trend among consumers to purchase branded product.

“Applications for this year’s programme will remain open until Friday 28 May – 2021 is going to be a pivotal year for retail, so I strongly recommend you don’t miss out.”

Retailers can apply for a free delegate place on the programme here. Applications will remain open until Friday 28 May.

UFC launches global consumer rewards programme on licensed products with Fabacus

The technology start-up, Fabacus has partnered with the mixed martial arts organisation, UFC, to launch a global consumer rewards programme for fans purchasing UFC licensed products.

In a deal brokered by IMG, the Fabacus platform – which connects global brand owners with their consumers – will supply the technology to enable fans worldwide to redeem an array of exclusive UFC experiences, rewards, and content.

Through Fabacus, UFC will have the potential to engage on a one-to-one bases with its global fanbase of some 625 million followers, by offering them access top the programme. This programme will feature rewards including UFC’s new exclusive outfitting and apparel partner VENUM, along with other brands signing up with the platform later in the year.

Andrew Xeni, CEO and founder of Fabacus, said: “We’re delighted that UFC has chosen Fabacus to further enrich the experience of UFC fans throughout the world. We believe this is the first time a global licensor has been able to curate a campaign in this unique way, simultaneously across multiple partners, categories, and territories, delivering personalised experiences to the fans that are buying their licensed products.

“Our platform has been developed to forge ever closer relationships between brands, their partners, and consumers. We’re pleased to be part of something that will benefit all parties.”

Matthew Primack, SVP licensing, IMG, said: “IMG has assisted the UFC in reaching new levels of consumer engagement through licensed consumer products. By offering UFC fans rewards for purchasing authentic product, the UFC brand is enhanced while fans are appreciated for their support.

“This is achieved through an innovative experiential rewards program designed and delivered in collaboration with Fabacus. The first live UFC redemption campaigns have delivered impressive results and we look forward to exploring more brand- enhancing and value-adding experiences for our clients in the future.”

Consumers will be presented with the opportunity to redeem rewards through Acoustix, the UFC Ultimate Sound music and media app provider, which will play a vital role in the rewards programme.

Xeni formed Fabacus in 2016 to bring innovative ways of working to the retail and licensing landscape. Fabacus has since gone from strength to strength, working with a growing community of partners and establishing a global headquarters in Soho Square, London.

Games Workshop to give all staff £5000 share bonus amid another strong year of sales

A boost in the hobby and hobby gaming sector over the past year and throughout the pandemic has led to another set of record results for the UK’s miniatures and tabletop gaming specialist, Games Workshop, who is set to hand £12 million worth of share bonuses to staff following the success of its current financial year.

The share bonuses will be paid on an equal basis to each member of staff, handing each around £5,000. It’s a significant increase on the bonus received by staff members in the previous year, when the UK firm paid profit share bonuses amounting to £2 million.

Games Workshop has detailed particularly strong sales in its current financial year, one that it expects will end at no less than £350 million in the year to May 30th 2021. This marks a leap of some £80 million on the year prior, fueled in large by increase demand and engagement with the hobby scene over the course of the pandemic, as well as an evolving and growing licensing arm now spanning some of the biggest entertainment franchises globally.

The hobby specialist is also expecting its full year pre-tax profit to come in at not less than £150 million, up from £89 million in the prior 12-month period. This will includes royalties receivable from licensing which are estimated to be around £15 million.

The Retail Bulletin reports that, when announcing the company’s half year results back in January, Games Workshop chief executive Kevin Rountree said the business had put in a “cracking” performance with sales rising to £186.8 million in the six months 29 November compared to £148.4 million in the corresponding period in the previous year.

In addition to its Games Workshop  website, the company operates the Warhammer chain of stores across the UK.

Tonies to open exclusive pop-up in Harrods’ Fourth Floor Toy Department

An exclusive Tonies pop-up is preparing to open at the world-renowned department store, Harrods and its Fourth Floor Toy Department this May 29th, welcoming kids and families to the world of the popular children’s audio player.

The pop-up will feature best-selling Tonies from the company’s collection of over 100 characters, including stories from the beloved author Julia Donaldson, such as The Gruffalo, Room on the Broom, and Stick Man, as well as the young, charming Zog.

Offering content to entertain and educate both infants and children of up to ten years old, the Harrods’ pop-up range will also feature childrens’ favourite, Peppa Pig, as well as a selection of Disney classics including the Lion King, the Jungle Book and Toy Story.

As well as an abundance of Tonies, a range of Tonies accessories will also be available at the pop-up, including the firm’s line of Tonie-Carriers with space to hold 20 of the Tonies figures, each available in six different colours.

Tonies has been active in the licensing space in recent weeks, having announced a new slated of characters to join its audio storytelling platform, including the likes of Diary of a Wimpy Kid, Bob the Builder, and PAW Patrol. This week has seen the company detail a partnership with the BookTrust and the Life-changing Libraries initiative, created by How to Train Your Dragon author, Cressida Cowell to move the government to increase funding for primary school libraries.

Tonies library of licensed audio stories now span some of the biggest entertaiment franchises, from Disney and Universal, to Julia Donaldson and more.

Pop culture retailer Geek Retreat marks Star Wars Day and its eighth anniversary with National Autistic Society donation

The UK’s geek culture retailer, Geek Retreat, combined its Star Wars Day celebrations earlier this week with its eighth anniversary by donating eight per cent of its turnover generated on the day (Tuesday, May the Fourth) to the National Autistic Society.

Geek Retreat , which opened its first store on May 4th 2013 in Glasgow and now boasts 24 shops, is a gaming cafe, retailer, and events hub rolled into one. In a show of commitment to the hallowed day of the geek, the retailer enabled customers to celebrate Star Wars Day with special merchandise such as posters, clothing, figures, and memorabilia.

Visitors throughout the day were also able to enjoy a special Jaffa the Hut milkshake, a blend of Jaffa Cakes and ice cream.

All of the brand’s stores commit to a COVID-19 secure environment, with strict social distancing and hygiene measures in place, to give customers extra piece of mind that they can visit in confidence.

Stephen Walsh, founder of Geek Retreat, commented: “Making sure that Geek Retreat provides an inclusive, welcoming, and social environment for our more vulnerable customers, like those on the autistic spectrum, or with mental health issues has always been extremely important to us.

“With this in mind, we are delighted to donate eight per cent of our turnover to the National Autistic Society to mark our eighth anniversary and the hugely popular Star Wars day.”

Kimberly Scoltock, head of philanthropy and partnerships at the National Autistic Society said: “Thank you so much to Geek Retreat for donating eight per cent of their turnover to our charity on this special day. This means even more at the moment, when we’re trying to weather the financial toll of coronavirus.

“We’re facing a significant funding gap and working hard to adapt how we work so we can continue helping tens of thousands of autistic children, adults and their families each year, and fighting for better support and services. Your brilliant and welcome support is helping us to fill this gap.”

Autism is a lifelong disability which affects how people communicate and interact with the world.

There are around 700,000 autistic people in the UK. Because it’s a spectrum, every autistic person is different and will have their own strengths and face varying challenges. Some autistic children and adults need 24-hour care and support, others may need clearer communication or a little longer to do things at school or work.