How Retailers' Love Affair With Celebrities Will Blossom In 2012

January 4, 2012

By Micahel Stone

Retailers’ relationships with celebrities have blossomed from fling into full-blown love affair in recent years, as major department stores and mas sretailers have secured exclusive celebrity lines as a means of differentiating themselves from competitors and attracting consumers. Most recently the nuptials between Martha Stewart and JC Penney and Vera Wang and Men’s Wearhouse have spawned major headlines. In addition, the holiday buzz around Lady Gaga’s Workshop at Barney’s, the Kardashian Kollection at Sears, Jennifer Lopez’s and Marc Anthony’s lines at Kohl’s (now separate, given their personal separation) and the countless other celebrity collaborations, such as Kathy Ireland’s recently announced fur and accessories line for the Fur Vault and at Macy’s, and Gwen Stefani’s new Harajuku Mini Line at Target, provide proof that retailers’ affection for celebrities is not likely to dwindle any time soon. The Feeling is Mutual

Looking ahead to 2012, retailers will continue to value celebrity appeal and trip over themselves to snare the next celebrity as a means to drive consumer traffic. But with so many A, B, C and even D-list personalities flocking to the potentially high rewards of a licensed product line, getting past the velvet rope and gaining entry into an oversaturated market has become increasingly difficult. That being said, if executed intelligently, a celebrity-branded line provides stars with additional revenue sources and added touch points to maintain relevance and authenticity among consumers. These celebrities are looking not only for another paycheck but also another way to extend their fame (e.g., Madonna’s just-announced lifestyle line, Truth or Dare at Macy’s) and further build their personal “brand.”

But just how many celebrities can honestly say they have reached the highly sought-after “brand” status? The answer: very few. The fact is only a small number of celebrities are able to successfully manage the transformation from star to established brand. Paul Newman, Martha Stewart, Jaclyn Smith and Jay-Z are all enjoying their hard-earned brand badges. While some consumers buy a celebrity product line because they aspire to emulate a particular celebrity, others make their buying decisions based on trust and the quality and design of the product. Consumers who buy Jaclyn Smith apparel at Kmart do not aspire to be more like Jaclyn Smith as much as they value the design, quality and price of the goods. But those who buy Jennifer Lopez apparel at Kohl’s aspire to be more like People’s Most Beautiful Woman of 2011.

Plenty of Fish in the Sea

With a finite amount of shelf space and increasing desire by celebrities to extend their names, the celebrity licensing industry is ripe for innovative expansion to new retail channels. While celebrity product lines have graduated from Kmart and Kohl’s to Nordstrom and Barney’s,they have yet to stake their claim for shelf space at non-traditional retail outlets. Just how many morecelebrity lines it will take to reach that tipping point is anybody’s guess.

 I suspect that 2011’s oversaturation of celebrity product lines at department stores and mass retailers will encourage, and even compel, celebrities to venture into new retail frontiers. In fact, the trend may already be underway, as we have seen with Salma Hayek’s skincare and beauty line exclusively at CVS launched last August and Project Runway’s Christian Siriano’s footwear line at the discount shoe retailer Payless. Consumers and retailers who have displayed a strong affection for celebrity lines should expect to see more familiar faces (and some not so familiar) in unexpected places such as the aisles of their favorite grocery stores, family discount and value outlets, specialty stores like Bed Bath & Beyond, direct responsetelevision networks such as QVC and HSN (perhaps someone will supplant Snooki on HSN), and, of course, online retailers. I guess the real billion-dollar question is: Who will be Amazon’s first celebrity retail exclusive?

 As channels for distribution expand out of necessity, the elements of success will remain the same. A celebrity with passion for product and a strong, relevant connection between his or her name and the product category, regardless of the retail channel, will have a higher probability of success. With retailers continuing to hold the cards in 2012, the emphasis on innovation and quality, regardless of the category, will not only dictate sales but separate true celebrity brands from those that are merely a several year (at most) flash in the pan.

This article is by Michael Stone, CEO of Beanstalk featured on Forbes.com's CMO Network