Bruno Maglione, president, IMG Licensing, details the evolution of digital innovations in licensing.
Writing about trends for a licensing-focused publication is tricky because the licensing industry is the business of all businesses. That is, any product, service or experience can benefit from the strength of a brand license and often does. The common thread of our business discipline is not a specific sector but rather brands per se – or intellectual property that can function as a brand, be it a fashion label, a trademark or a personality.
In recent years, fashion brands, in particular, have confronted market landscape changes that potentially diminish a brand’s most precious asset: brand loyalty. Most of these changes have been driven by technology, specifically digital technology, and these are set to intensify further in 2025 with, amongst other factors, generative AI.
2025 marks the 30th anniversary of the emergence of e-commerce with platforms such as Amazon and eBay and enabling payment transfer tools like PayPal. This is a watershed moment for marketeers because this established the foundation that has raised the competitive bar for legacy brands ever since: the limitless online shelf that eliminates the space constraints that still define physical retail today. Constraints that provide established brands an advantage over new ones. In the physical world, for one brand to secure shelf space, another has to drop off - a tougher assignment than getting listed on an online marketplace.
This year also welcomes “Generation Beta,” the fourth generation since that 1995 milestone. Each generation is more receptive to commerce conditions that chip away at the historical advantages of contemporary dominant brands. In 2025, new or enhanced trends include increased receptiveness to “Creator Economy” products, social commerce on platforms such as TikTok or Instagram, streamed “live” social commerce and AI-assisted personalized shopping. The latter, still in its infancy, can result in brands losing editorial distinctiveness in a universe of “AI-speak” standardization.
The appeal of new and “discovery” is seductive in most fields of human endeavor where safety and security are not central factors. My Instagram feed can present me five new shirt brands each week, and across that medium, they all appear as attractive as my heretofore “go to” brand - maybe more so given their fresh appeal. Multiply this over hundreds of brands targeting millions of consumers with equal facility and Mr. Established Brand starts to lose meaningful sales to the collective newcomers. Loyalty is challenged by the constant solicitation and choice offered by the cell phone in your hands.
These factors have given rise to those ubiquitous licensed “brand collaborations” we’ve seen steadily increasing over the last 15 years. These days, they are an essential initiative on many brands’ marketing calendars as they are an effective marketing strategy to counter the proliferation of brands enabled by social commerce platforms. While innovation and design are tools to distinguish competitive brands, there are limits to the amount of useful innovation one can inject annually into basic products and only so much design variety before a brand becomes stylistically incoherent. Collaborations provide a solution, offering news, merchandising excitement and proprietary design interest that can break through rote algorithm-driven brand solicitation (or claims so universally embraced as ineffective differentiators - e.g. sustainability). Collaborations with leading IP can favor more established brands for a simple reason: while often self-liquidating through sales, they cost upfront money - sums that smaller, upstart brands can less easily afford.
Similarly, brand extensions are another strategy for legacy brands to compete in an environment of decreased brand loyalty. While novelty can be advantageous for the new kid in town in their original core product offering, this same debutante appeal is likely too recent and narrow to be embraced further afield. By contrast, the sheer longevity of sustained success, organically builds a wider arc of brand trust and “permission to play” in multiple product categories. While not new, brand extensions are a strategy of increased relevance in the 21st century to generate income and deliver more engagement opportunities to the perennially distracted digital-native consumer.
In summary, the digital commerce revolution of the last 30 years has profoundly altered the competitive marketplace for brands at a foundational level. How and where they are developed, distributed, marketed and purchased. The magnitude of these changes has affected consumers’ relationships with brands, requiring marketers to re-visit conventional playbooks on how to build awareness, trust and loyalty. In this new paradigm, brand licensing can play a greater role.
For more information on licensing opportunities please visit IMG Licensing.com