A License To Thrill
With the Hello Kitty brand evolving into a cult phenomenon on a global scale, Chloe Gold explores the role that licenses for well-known characters play in the duty-free children’s market
LICENSES of renowned children’s characters constitute a multi- million pound business, and one that is currently making a big noise in the travel-retail sector is cartoon character Hello Kitty, which is one of the most rapidly expanding and hottest brands of the moment.
Created by stylist Ikuko Shimizu in the early to mid ‘70s, Hello Kitty has since become the icon of more than 22,000 different products distributed by various licensees all over the world. Exhibiting the new ‘couture’ line from the Hello Kitty brand at the recent TFWA Asia Pacific Exhibition in Singapore, Travel Retail International SA (TRISA) – a specialist in travel-retail distribution – showcased the women’s and children’s ready-to-wear range, accessories, small leather goods, watches and jewellery. Appointed as the exclusive distributor for travel-retail worldwide for Hello Kitty by Victoria Couture, TRISA has since seen phenomenal growth at domestic level, particularly in Europe, and is eager to get this message across to the travel-retail trade as quickly as possible.
“There is a real phenomenon around the Hello Kitty brand and the reaction to our presence was extremely positive,” says TRISA’s international sales director, David Godfrey. “The Hello Kitty brand is extremely desirable and it is important that we move fast.”
Currently distributing the brand in travel-retail locations in Beijing, Beirut, Mauritius, the Maldives and imminently Taipei airport, TRISA is looking to expand the distribution in all key locations across the globe. Since exhibiting at Cannes, Fort Lauderdale and Singapore, TRISA has received interest from airlines, airport operators, border shops, downtown duty-free stores, cruise lines and seaports, with South America, the Middle East, India, Malaysia, Korea and Russia showing a particular interest in the brand.
Familiarity, newness and emotion are the terms that Godfrey uses to explain the bond that evolves between the brand and the duty-free consumer/trade buyer. Godfrey notes that as the distributor, it was keen to take on the Hello Kitty by Victoria Couture range as it fitted the criteria of an internationally known brand which was as yet unexploited in the travel-retail channel.
“Since August 2007, we have made some good progress in travel-retail, with openings in Beirut Duty Free and Beijing Airport Terminal 3, plus in Mauritius and the Maldives. At the moment we are putting the brand in place and we may be extending the range in the near-future,” says Godfrey. “The business has grown very quickly, with boutiques in Paris, St Tropez, Dubai, Moscow and Miami, among others. The concept is strong and perfectly adaptable t o t r a v el-retail. We’ve found that when the product is available, it is a sell-out. It is bordering on a phenomenon and has a huge cult following. Women of all ages connect with the Hello Kitty character and transmit this to their own daughters.”
Constant feedback from the domestic markets and operators is one of the most important elements in order to optimise retail space, says Godfrey, and it is something that TRISA does by having its own fixturing concept which is flexible and adaptable as the company is able to propose a concept and range plan for all types of location.
Also recently adding the Hello Kitty brand to its impressive portfolio of licensed children’s characters is distributor Global Travel Retail Sales (GTRS), currently housing 25 of the world’s most iconic licensed brands for its confectionery range, which include worldwide famous characters SpongeBob, Spiderman and Barbie. Since taking on the Hello Kitty brand it has become the number one license within its confectionery portfolio.
“Hello Kitty seems to carry a limitless appeal at the moment. It attracts people of all ages and it’s become a real fashion phenomenon, a particularly massive appeal to Asian passengers,” says David Spillane, CEO of GTRS.
According to Spillane, in order to cater for the margins that travel-retail requires, product differentiation is crucial – this is where licensing children’s brands comes into play.
“Recognition is a key advantage,” explains Spillane. “It means that the brand doesn’t have to be sold or its virtues explained when presented to a trade buyer as every buyer recognises the brand.” He adds: “The only discussion that it really comes down to is whether they like the product concept or the confectionery component, whether they think the price is right and whether there is space in the retail outlet to accommodate the range.”
Although recognition within the trade is highly advantageous, recognition for the consumer is just as important. “It is the first emotional bond that children form, apart from with their own families, so it’s very much a guaranteed win situation for consumers when they are buying licensed products,” says Spillane.
The main markets include Europe, the Middle East and Asia, although Spillane explains that due to different licensing agreements in the Americas, GTRS would not necessarily possess the right to distribute into the American marketplace. With the company based in Ireland, which Spillane considers a saturated and mature market, he stresses that it is important for GTRS to “not just wear its European eyes”.
“It’s essential that we offer a broad mix and take into account the people who are travelling from
literally every country in the world through Ireland’s and the UK’s gates,” says Spillane.
Having worked in the travel-retail confectionery sector for 15 years with Nestlé before setting up GTRS, Spillane has seen the confectionery industry re-define and re-develop itself to new levels. It is now considered to be one of the fastest-growing and most innovative categories in travel-retail, responsible for many exclusive product formats, many of which use licensed characters.
“Travel retailers want to maximise their average transaction value to give them more gift appealand raise the retail price point. The requirement from retail partners is that we develop and create products that be sold in Sterling for about £3.99 to £6.00, while the domestic market licenses work with points of about 99p,” says Spillane, who explains that this is done by adding a collectible or gimmick enabling
children to interact with the product – this mix of toys and gifts adds value to the confectionery component and gets an instant reaction.
In comparison to traditional confectionery houses, GTRS has managed to capitalise on its independent stance and flexibility. Spillane warns that the downside presented to the major houses is that despite having a very wide array of products, they generally only have one or two children’s brands within their portfolios, which limits their
“With the traditional houses, they have fabulous brands which have stood the test of time – some of them have been around for 50 years and some a hundred – and that’s testament to how good they are as confectionery brands,” he says. “But they are confined to a certain extent, and in terms of the packaging and design of the product only a limited amount of space is allotted for the licensed character.”
Packaging and design remains the key focus of GTRS, whose sole concentration is on fun, value and the emotional response that the people have to the product where 100% of its packaging refers to the licensed character. Spillane attributes GTRS’ success with its colourful displays, which create a greater impact.
“That’s essentially what licensing and characters are all about – it’s the fun and the big bright splashes of colour that make a display look amazing [and that can be spotted] from the other side of the shop floor,” he says.
The success of GTRS is all about following the trends and working with perennial products, which it
does by following movie trends, reveals Spillane. “Last year Spiderman was hot because of the film premiere. This year High School Musical 3 is coming out so we’ve launched a High School Musical 3 product,” he says. “We look down the track two years and keep close tabs with the studios and see what movies are coming out and what’s likely to appeal to children, and we would endeavour to look at that and see if we can create something that’s very much in time with when the movie comes out.”
However, Spillane’s bone of contention is that licensed characters are not taken seriously or given the credit they deserve within travel-retail.
“Some people would turn their nose down at licensed characters,” says Spillane, “but them have been established for hundreds of years and are multi-billion dollar brands that spend as much money as Gucci and Dior on creating their brands by investing millions of dollars in movies or in television programming, albeit for a different market. It’s not aspirational, but if you’re a six- or seven-year-old boy, that’s as far as your aspirations go – and they do need to be taken seriously.” He adds: “SpongeBob is a multi-billion pound business and deserves as much respect as any other multi-billion dollar brand. But it’s easy to forget that – he’s a square sponge!”
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