The COVID-19 pandemic has been and continues to be a ground-shaking disruption in all communities and businesses, and it doesn’t seem to be ending anytime soon. License Global’s COVID-19: What Happens Next? analyzes the effects of COVID-19 within the licensing industry and its numerous business verticals, and assesses how brands, licensees, agents and retailers have altered their strategies in preparation for 2021. We’ll take a look into the common reactions of the licensing industry in different regions, growing challenges we’re facing as a community, and the predicted changes of the new retail landscape due to COVID-19.
Positivity During COVID-19
Despite the numerous layoffs and retailer shutdowns that have occurred in 2020, industry professionals are hopeful for the future. License Global conducted a survey with questions surrounding possible changes in business practices in 2021. On average, the licensing community expects businesses to finally stabilize, revenue to rise, and company headcount to increase by the end of 2021.
When separating this analysis by region, North American respondents are more optimistic compared to European respondents in terms of positive revenue growth. With licensing contracts, 62 percent of licensors, licensees and licensing agents reported to already have renegotiated their licensing contracts in response to COVID-19. This includes a discussion of both minimum guarantees and royalty rates. Lastly, the areas that were most affected by the global pandemic are sales, finding new customers and cash flow. This left the licensing industry with a wake-up call in 2020 to better strategize and plan a comeback in 2021.
Growing Challenges In The Licensing Industry
Throughout 2020, companies have been in a position to redirect their operations and sales strategies to adapt to the sudden external changes affecting consumers and their business. In License Global’s study of internal challenges companies are facing, 41 percent of respondents are expecting a lack of key performance indicators to guide them into 2021. The historical data is now irrelevant and consumer behavior is unpredictable. This lack of key performance indicators trickles down to an expected supply chain disruption and higher employee stress and morale. This is understandable as 2020 was a year of survival for many people and companies worldwide. If global events in 2021 continue to depreciate, this might be the breaking point for many businesses.
Developing The New Retail Landscape
The transformation of the retail landscape is unavoidable, and the importance of discovering the possible changes is important for brands to thrive in this new environment. License Global’s survey has shown respondents’ predictions on the possible changes in retail. At the forefront, 85% of respondents predict that online shopping already is and will continue to develop as a normal way to purchase products and services. 69% have also reported seeing an increase in store closures and acquisitions. We have all seen the growth and fall of many companies this year, and it won’t come as a surprise if we see even more in 2021.
Due to COVID-19, respondents predict an increase in hygiene measures as these requirements are heavily mandated to keep brick and mortar retailers open. At the same time, cashless payment is predicted to increase as well to keep up with sanitation procedures in-store. The effects we see today are just the beginning of this changing landscape. Over time, we’ll see the innovation and continued development in all areas of the retail space as well as the growth of the licensing community as a whole.
License Global’s COVID-19: What Happens Next? gives us hope and early predictions of what’s to come in the following year. 2020 has left the licensing community in a state of uncertainty, but it has brought everyone closer together to work hard and use these new opportunities to make their businesses successful. We’re ready for 2021, and we’re excited to see what’s in store for the new year.