Brands & Merch Business News Labels & Publishers The Great Escape 2016

CMU@TGE: Who the hell is buying all these t-shirts?

By | Published on Wednesday 29 June 2016

Kanye merch

Look out for insights, advice and viewpoints dished out at this year’s CMU Insights @ The Great Escape conference here in the CMU Daily throughout June and into July. This week, some of the takeaways from the physical products strand.

Having looked at the CD market and how it remains more buoyant than we might have expected in 2016, talk at the CMU@TGE physical strand moved on to merchandise. There is a perception that this is now an area where artists make their money, but is that the case? And who is buying all these t-shirts anyway?

Many would have you believe that it’s The Kids who are stocking up on merch with all the money that they’re not spending on recorded music – though we found out earlier in the day that more young people are actually buying CDs than you probably think. And, said Media Insights Consulting CEO Chris Carey, who kickstarted CMU@TGE’s merch discussion, there are many merch selling opportunities to be had with older music fans too.

“Merch is not only a young person’s activity”, said Carey, citing his company’s own consumer research. “We assume that old people buy CDs, young people buy t-shirts. It’s not necessarily the case. Looking at 16-24s, about 23% have engaged with merchandise over the last three months, but what’s interesting is that there are still opportunities in the 35-44 and 45-54 year old groups. Those groups have some cash to spend and they’re interested in buying merch”.

While for younger consumers merch purchases might be hoodies, older buyers are actually more likely to buy something like a book. Therefore it’s important for artists and their business partners to consider who their audience is and what sort of products they might be interested in buying.

Carey also noted that while 25% of the UK population have bought some merch in the last year, more than 55% have bought a CD. This doesn’t tally with the common narrative of how the music industry is evolving, and could lead to opportunities being missed, he said.

“The risk is that merch is seen as the only way of making money, and therefore you go after a quarter of the population, rather than also respecting the other revenue streams that can be valuable”, he added. “Different types of people need different products”.

“I think that there is a misconception about what’s gone on with merch”, cautioned BSI Merch’s Andy Allen in the subsequent discussion. “Just because people have started spending less on recorded music, doesn’t necessarily mean that they’ve transferred that available disposable income to purchasing merchandise within the music world”.

Music competes with other entertainment products, he added. “For example, when I grew up, there were maybe one or two cartoons that came out per year, now we’re talking about two or three animated films being made available per week. All I feel is that the money has been distributed elsewhere. I’m not saying that certain artists haven’t benefitted, but what has happened is that those artists have been highlighted, and then we start perceiving that automatically more money is being made through music merchandise. I wouldn’t agree with that particularly”.

However, that’s not necessarily a doom and gloom observation, more it means that the potential of merch hasn’t been fully tapped by many artists. Allen added: “Predominantly within the industry there’s a lack of focus on merchandise. For the artist, it isn’t usually their core business. There are exceptions – a lot of metal acts and a variety of pop acts, and others – who have seen their brand appeal with a specific audience and they have seized on it. But in general, most artists tend to not focus attention on their merch, so the sector is actually still in a very embryonic stage”.

Focusing on some of those opportunities, David Boyne of Universal’s merch company Bravado talked up the potential of working more closely with the fashion industry. “I talk quite often about that fusion of fashion and music and that’s been responsible for a lot of the growth that we’ve seen over the last four or five years”, he said. “Yes, you’ve got the fan that wants to buy into merchandise, but actually it needs to be credible and relevant from a fashion perspective. I think working with key fashion retailers, both in the UK and Europe, has certainly allowed us to drive that”.

“In the music business, historically the official t-shirt was a Fruit Of The Loom shirt with a print on”, he continued. “But how has that expanded in the last few years? Is it v-neck, is it cap sleeve, what sort of embellishment is it? I think as fashion becomes so much more relevant, the t-shirt today is not the basic Fruit Of The Loom shirt that perhaps people bought ten years ago”.

On that front, Rob Brown from management business Disturbing London praised Kanye West’s approach to merch and fashion, saying: “If you look at Kanye West, who is very much immersed in the fashion world, he separates his fashion brand from his merchandise brand”.

And that means artists having more than one brand. Brown continued: “If you look at the Yeezus brand, which was the name of his album and has the merchandise line attached to it, that is readily available in ASOS, Urban Outfitters, Topshop, all places like that. Then you have the Yeezy brand, which is a partnership with Adidas, with sells out almost immediately”.

“That is a separate brand associated to one artist”, he went on. “It is marketed differently, priced completely differently as well, but is a way to tap into the fashion side of things and still have the merchandise running separately and capitalising on all aspects of it”.

Brown also raised Chance The Rapper as an example, discussing how he engages his younger audience: “He’s very forward thinking in the way he approaches merchandise. His project that came out last week sees the merchandise very much being driven by the aesthetic. All the merchandise is customisable, so you go on his website and it’s very engaging. And because his target market is probably 16-25, he understands the way that they consume and the way that they engage with things digitally. They feel like they’re creating and designing, it further cements that relationship between the artist and the fan, just by adding a bit of engagement and interactivity”.

For newer artists of differing genres, however, is putting time and money into merch something worth considering? “It doesn’t matter what stage you’re at, if you’re conscious about what you’re trying to establish in your brand, that will see you through if you’re laying the correct foundations”, said Allen.

Thinking beyond just the t-shirt is a big part of that. “It isn’t just about doing a t-shirt” Allen confirmed. “You can go into other areas where there’s a lower amount of risk, in terms of badges, stickers. You can source stuff now at low volumes, at an affordable level”.

The value of that wider product range is upsell. “Certainly when you’re going out and playing live, and the fact that if you are selling the t-shirt for 20 quid or whatever, and you’ve got other things there that are a fiver or a couple of quid, you are going to encourage upsales and you are going to develop further sales out of it”.

Again, it comes down to knowing your fanbase. “Music is very much attached to wider culture, and culturally you could be influencing a lot of skateboarders, for example”, said Brown. “So if you’re an artist who has a lot of skateboarding fans, why not release a line of skateboards with your logo on, as people like Odd Future have done. I’ve got a friend who runs a club night in Brighton called Donuts, and they very much attract the skate crowd, so they do competitions where they give away Donuts skateboards. It’s engagement, and it’s a real passionate engagement”.

“What about Snoop Dogg?” he continued. “Everyone knows what Snoop Dogg does – he smokes. So therefore he sells you vapour pens, he sells you rolling papers, he sells you lighters, he sells you ashtrays. We’ve got an artist at Disturbing London called A2, who’s very much that ambient, smoking vibe. We’re looking at doing some lighters and ashtrays with him, because we know very much what his audience do. They like to smoke – sell them a lighter at £1.50. It doesn’t have to be a t-shirt at £20. You’re part of something, you engage with it”.

Although positive about the wide variety of opportunities out there for creating new merch products around artists to engage fans and drive sales, the panel were more cautious of the other approach – licensing an artist’s brand out to other companies who then make the new products.

“We have a fairly unique position that we don’t license much”, said Boyne. “It concerns me sometimes that if you’re licensing out to a third party, they don’t have the integrity that we have dealing directly with management. It kind of becomes Chinese whispers, because you’re at a distance. If there’s a product where we have no expertise, then we would do a licensing deal, just because we don’t have that core competency. But we always like to do things ourselves”.

“I would never do a licensing deal unless I was at a stage where my brand was very difficult to destroy and it’s at a very established point”, added Brown.

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