DIGITAL FORCING LICENSING INNOVATION

WENDY TOTH

NEW YORK - Digital media is raising the bar for licensed products.

As a result, traditional retailers like supermarkets should be aware of an overall higher expectation of what defines a fun experience, even for classic toys and products, said industry experts at the Licensing 2006 International show here last month.

"Kids don't care if a game or toy is digital or not, just if it is a fun experience," said Jim Davey, senior vice president, global marketing and strategic planning, Nickelodeon and Viacom Consumer Products, Los Angeles, during a panel at the show. But because they can go online and download a SpongeBob game, they have this as a point of comparison, he said.

"The digital world increases consumer accessibility to a license by letting them experience it in a number of ways," said Christina Miller, vice president, U.S. consumer products, Cartoon Network Enterprises, Atlanta, during the panel.

Dollar growth in electronic devices went up significantly from 2004 to 2005, according to numbers released by NPD Group, Port Washington, N.Y., at the show. Portable audio devices went up 80%, video game hardware went up 30% and personal computers went up 10%.

Meanwhile, websites and online purchasing have raised personalization and customization through fashion, color and design, said NPD's Anita Frazier, industry analyst, speaking at the show.

Next to this year's major licenses, which include: Sesame Workshop, SpongeBob, Dora the Explorer, Superman, Pirates of the Caribbean, NASCAR and FIFA World Cup, licenses that have the flexibility to offer consumers a customized and deep experience are getting attention as worthwhile investments, observers said.

For example, Uglydolls, from Pretty Ugly, Kenilworth, N.J., winner of this year's specialty Toy of the Year Award from the Toy Industry Association here, feature a cast of unique plush characters, each with its own story. The dolls are currently being offered in some Whole Foods locations, said spokeswoman Alexandra Nunes.

Crayola, Easton, Pa., is using color to customize a range of products from vitamin-enhanced drinking water to bath products. "Crayola colors are relevant to both kid and parent," said Diane Baldovsky, global licensing manager.

For retailers with limited shelf space it is impossible to offer every customized choice of multiple types of product, observers said.

"Supermarkets and other traditional retailers need to run on inventory productivity," Davey told SN. "Retailers can choose a narrow product set and go deep, rather than have a wide selection of similar products," he said.