DRAWING POWER 1997-07-21

JOEL ELSON

From classic cartoon characters to this month's hot theatrical release, licenses have become a mainstay in supermarkets' greeting card departments.

Social expression companies are investing heavily in licenses because they draw traffic and add merchandising excitement, said nonfood executives contacted by SN.

According to Barb Zugmier, nonfood director at B&R Stores, Lincoln, Neb., licensed properties have broad appeal to a youth-oriented age group. "It's almost a built-in attraction for kids," she said.

"As licensed items enter the market, kids want to get into collecting. There are those at the dinosaur stage and others who are more interested in the 'Space Jam' guys," Zugmier said. Licensed products sell well at B&R, particularly when they are cross merchandised with the movie video, she said.

Under the direction of Frank O'Connell, president and chief executive officer of Gibson Greetings, Cincinnati, licensing has become a strategic part of the company's growth plans.

The goal with licensing is to "create the most dynamic and effective base of powerful licensing alliances in the industry. Through exclusively licensed, high consumer demand product offerings, and high velocity development of new product variations, we plan to build a product line available only from Gibson, which we will use to build an incremental presence with mass distribution, as well as new types of distribution outlets," said O'Connell in Gibson's latest annual report.

With properties such as "Batman & Robin," "Space Jam," "Sesame Street," "Chicken Soup for the Soul" and "The Lost World," Gibson has gone beyond traditional social expression products into toys such as 3-D paper models.

The company also is merchandising a variety of related licensed items on special floor displays. For example, the manufacturer produced a three-panel floor piece for retailers to merchandise the "Space Jam" video along with themed toys and static clings, greeting cards, gift wrapping and stickers.

"Licensed properties are a big plus for retailers. And the marketing muscle behind these licensed products by studios and manufacturers brings brand equity to card racks and pulls people into the card aisles," said Craig Seaver, Gibson's licensing director.

For Raley's Supermarkets, West Sacramento, Calif., licensed properties have been an important ingredient in greeting card merchandising. "The licensed products are what a lot of people look for and relate to," explained Dan Black, the chain's managing buyer for general merchandise.

Some licensed items do better in certain Raley's locations, such as National Association for Stock Car Auto Racing items in college areas. And while many licensed sales fall in the $5 to $10 price range, "a hot toy can be priced higher," Black said.

Licensed items are cross promoted in greeting card sections or near Raley's video departments. The retailer has been successful in blending several licensed items with the same theme on an endcap display for greater effect. "This makes a statement and highlights the products for customers," added Black.

Licensed products are an important addition in satisfying greeting card customers at Dierbergs Markets, Chesterfield, Mo., according to Jim Denny, nonfood buyer.

However, Denny said, licensed products priced between $5 and $10 do the best and anything priced higher is hard to sell.

Dierbergs also prefers to cross merchandise licensed goods with other products, like video, "which is great support," Denny added. The chain works on 10% margins on tie-in videos featured in licensed theme promotions.

The retailer also promotes licensed merchandised in floor shippers or on endcaps. "We basically try to get in and out of licensed merchandise quickly and give the customers what they're looking for," Denny said.

At Harps Food Stores, Springdale, Ark., licensed products are carried in limited supply, according to Art Bundy, director of nonfood.

"We're in rural stores and so are behind the trend. Whenever we try and get out in front of a trend, it costs us money. We've been stuck with licensed goods in the past," he said.

The chain's approach to the licensed category is "trying to bring them in after a trend has established itself. Then we'll buy into it. But we'll no longer be out in front as it's just getting started," Bundy added.

The most successful licensed products for Harps have been toys, especially at Valentine's Day. "Products tied into movie characters, like Batman, and promoted on shippers and endcaps priced under $5 do well," he said.

Clemens Markets, Kulpsville, Pa., merchandises licensed goods with partyware in the greeting card department.

"Licensing is important to our card business and definitely attracts kids," said Larry Schimpf, director of nonfood. "Kids want licensed party products for their birthday parties," he added.

The heavy investment that the major card suppliers are making in their licensed goods and in adding new characters assures retailers of having items that tie in with the latest hit theatrical and video releases, Schimpf said.

Licensed properties actually outsell products with general designs six to one, according to Karen Mitchell, business development manager for licensing at Hallmark Cards, Kansas City, Mo.

"Winnie the Pooh bears, for example, outsell generic bears by 66%," she said.

According to Steve Hawn, Hallmark's marketing vice president for supermarkets, about 82% of mothers ask their children what partyware theme they want for a birthday party. "And 90% of those moms go out and seek those products," he said.

"Women, the core card customers, notice the licensed characters, and their kids talk about them with love and affection," added Hawn.

Betsy Novack, director of licensing at American Greetings, Cleveland, maintains that licensed products drive certain categories like party goods, especially juvenile lines.

While consumers pick up birthday cards at stores they happen to be in,"if their child wants a Rugrats birthday, you better believe they'll shop until they find that Rugrats party goods ensemble," said Novack.

Mixing and Matching

Mixing and Matching Licensed properties have become an integral part of the social expression business as the three major manufacturers vie for the hottest images to draw shoppers into supermarkets' card departments. From the latest movies, television and video properties to classic characters and sports teams and events, here's a sampling of the licenses suppliers will feature this year.

American Greetings:

CreataCard new licenses: Major League Baseball, Elvis Presley, I Love Lucy and Nintendo stickers. January

Berenstain Bears, based on the classic story books: party goods ensemble. March

Nickelodeon's Rugrats: juvenile greeting cards and party goods in gift wraps, plates, cups, napkins, accessories, including stickers, honeycomb birthday centerpiece, streamers, banners, window decorations and invitations. March

G.I. Joe: flat and roll gift wraps at $1.99 to $2.49. May

Tonka: juvenile greeting cards and partyware and gift wraps. A Toys 'R' Us exclusive for six months starting in June. 1998

Bananas in Pajamas, based on PBS children's show: gift wraps and greeting cards.July

Christian Riese Lassen, artist of the sea: greeting cards priced at $2, gift bags and scrolls priced at $3.99. August

Simpsons, Bananas in Pajamas, and Rugrats: children's 30-count packaged classroom Valentine's Day cards, with free sticker sheet, priced at $2.49.Summer

Major League Baseball: stickers and 16-month stadium calendars. July

Christian Riese Lassen: calendars. July

Curious George: juvenile stickers and calendars, priced at $7.99 to $9.99.4th quarter

Gibson Greetings:

Space Jam: three-panel floor display piece for merchandising the video, and video gift box, priced at $1.99. April

The Lost World: greeting cards, stickers, tattoos, new "Cool Cardboard Collectibles" paper dinosaur models, 3-D gift box. May

Chicken Soup for the Soul: inspirational cards based upon the best selling book.May

Batman & Robin: greeting cards, gift bags, gift wraps, stickers, three-piece Batman character magnet and "High-Rise Pop-Up Greeting Card." Also, 3-D gift box with perforated movie characters, 3-D wall art posters with movie characters, 3-D Freezemobile and Batmobile Action Assembly Kits. June

Men In Black: greeting cards and stickers. June

Anastasia, an animated film: greeting cards, themed toys, static clings, gift wraps and stickers. Anastasia shown dancing on 3-D wall art.Fall

The Lost World, Batman & Robin: three-panel floor display piece for merchandising the video, and video gift box. 4th quarter

Hallmark Cards:

Star Wars: greeting cards, gift wraps, stickers and partyware. January

Hercules: greeting cards, gift wraps, stickers, ornaments and partyware. June

Harley Davidson: greeting cards and gift wraps. July/August

Wubbulous World of Dr. Seuss, based on the Nickelodeon TV show: greeting cards, gift wraps, stickers, party goods. July

Winnie the Pooh: updated design greeting cards, gift wraps, partyware, stickers, albums and stationery. July

The Little Mermaid: themed greeting cards, gift wraps, stickers, partyware to support theatrical re-release of movie. October

Super Bowl XXXII: themed products with heavy focus on party goods in napkins, table covers and invitations, designed in a nautical logo for upcoming 1998 Super Bowl in San Diego. November

NFL and NBA: new sports party pattern in gift wraps and partyware. NFL: August; NBA: December

Barbie: updated greeting cards, gift wraps and partyware in new cheerleader design.Later in year