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IOC develops global e-commerce platform to build licensing programme between Games

Havaianas flip-flops were the biggest selling licensed product at the Rio 2016 Olympic Games with 2.5m pairs sold. (Photo by Harry How/Getty Images)

• Ambition to create licensing programme set out in Agenda 2020
• Organisation creates three categories to trade on heritage, iconography and values of the Olympics
• Local organising committees will continue to license products for duration of each edition of Games

It might come as a surprise to learn that the Olympic Games has never previously operated a centralised licensing programme. After all, the five interlocking rings of the Olympic symbol exist in an exalted category of iconography that is freighted with cultural significance and recognisable regardless of age, gender, or nationality. Exactly how much this is the case was reinforced by a global brand study commissioned in 1999, which revealed that 78 per cent of the world’s population recalled the symbol, ranking the Olympics ahead of organisations like the Red Cross in the popular consciousness at the time.

“We have a great selling event, the Olympic Games, and we never really realised that we also had a great asset and a great brand,” concedes Elisabeth Allaman, vice-president of commercial integration at IOC Television & Marketing Services. “We never really had a strategy on how we wanted to position our brand outside of the Games.”

Until now the official licensing programme for each edition of the Olympics has fallen to the Local Organising Committee (Locog) in the host nation, while National Olympic Committees (NOCs) have been allowed to license companies to create team-specific souvenirs for their own country. The IOC has operated a worldwide licensing programme in just a handful of categories, such as films and video games, with the result that merchandising activity tends to spike locally in the period immediately before, during and after the Games and then fall away altogether in the interregnum.

Olympic Agenda 2020,  International Olympic Committee (IOC) president Thomas Bach’s 2014 roadmap for the future of the Olympic movement, made a commitment to address this shortcoming when it was published in December 2014 without really elaborating on the strategy. “The IOC [is] to develop a global licensing programme, placing the emphasis on promotion rather than on revenue generation,” was the sparse wording of the 34th proposal out of 40 in the 25-page document.

Official merchandising store at the London 2012 Olympic Park. (Photo by Alexander Hassenstein/Getty Images)

Four years later and the organisation has begun to add more detail to the plan. Allaman explains how it is now looking to create licensing partnerships with brands that “share the same values and objectives, helping the IOC to engage and connect with our target audiences and communicate the essence of the Olympic brand”. Consistent with the wording of the original Agenda 2020 proposal, she argues that the focus is on brand building and maintaining a regular presence in the marketplace between Games, rather than on pure revenue generation.

“We haven’t set specific financial benchmarks and it is really about the number of people we can touch. That is really the yardstick we are using to measure our programmes,” says Allaman. “If we are successful, there will be a financial payoff, but we aren’t looking at it as a third pillar of our revenue after broadcast and sponsorship. That frees us of the short-term pressure that might lead us into areas that we don’t need to go.”

To control the branding and messaging, and provide a framework for licensees to work with, the IOC has created three new core licensing categories designed for specific target groups: the Olympic Collection, the Olympic Heritage Collection and the Olympic Games Programme.

The Olympic Collection

The first of these, the Olympic Collection, will principally solicit licensing partnerships with third-parties to develop toys targeted at children and sports equipment targeted at active sports people and sports enthusiasts.

“It’s about sport, it’s about our values, it’s about our colours,” Allaman says. “It is about what we are as a movement and it’s really something which is also intended to be fun, to be more developed in the area of sport equipment but also educational for kids.”

Merchandise on sale in a shop at the Sochi 2014 Winter Olympic Park in January 2014. (Photo by Richard Heathcote/Getty Images)

She says that the IOC has found it relatively easy to enter the textile and apparel licensing business but that it lacks the knowledge to develop games and collectibles for children. This, she explains, is one reason why she attended and spoke at the recent Brand Licensing Europe conference in London.

“We want brands to know that we want to be a player in this field of licensing, of merchandising,” she says. “We want to start prospecting in the market.”

But she adds that the IOC has examined the most successful licensing programmes from around the world to guide its strategy. She points to the example of Ferrari’s licensing partnership with Lego as one the organisation would like to emulate.

“They did a specific line of products that you could win if you went to a petrol station,” she says. “You would never think that kids would be interested in going to a petrol station, but they were, and it was a great programme from a licensing perspective but also from a marketing engagement perspective.”

Another example that caught the IOC’s attention was Fifa and Uefa’s partnership with collectible sticker manufacturer Panini. “How could we have something like this where we make sure that we connect with this audience of kids on a regular basis, where they want to collect something and they engage with you?” says Allaman.

The Olympic Heritage Collection

The second category, the Olympic Heritage Collection, will be a series of lifestyle and commemorative products that trade on the history of art, architecture and design at the Games. Made up of premium and limited-edition products, it is targeted at Olympic collectors and enthusiasts.

“It’s not just the assets we registered, such as our intellectual property like the emblem [for each Games] or the [Olympic] posters, but also all the look, all the design and the work around the Games,” Allaman says.

The IOC will allow licensees to repurpose artistic collaborations, designs and colour pallets from previous editions of the Games to create new assets that can be exploited.

The collection has already found a licensee in the shape of Lacoste, which signed a deal to produce an Olympic Heritage lifestyle apparel collection in June this year. The limited-edition collection reflected the designs of the 1968 Winter Olympics and the graphic legacy of Lance Wyman’s classic identity for the 1968 Summer Games in Mexico.

The United States Olympic team file into the University City Olympic Stadium during the opening ceremony for the 1968 Summer Olympics in Mexico City. (Photo by Robert Riger/Getty Images)

The collaboration will continue until 2020, with a collection developed each season. Starting this summer, it has initially been sold in 10 countries: Canada, China, France, Germany, Italy, Japan, Mexico, South Korea, Spain and the UK.

In a joint press conference at the time the deal was announced, Lacoste chief executive Thierry Guibert talked up the synergies between the two brands. “[The] Lacoste brand carries the values of fair play, elegance and tenacity that are dear to the Olympic Movement. Those common values have inspired this collection that radiates the iconographic heritage of past Olympic Games,” he said.

The Olympic Games Programme

The Heritage Collection is designed to increase the shelf life of the iconography and licensing programmes created by the different Locogs for each edition of the Games, but Allaman says it won’t compete with or replace these programmes. The IOC will continue to allow each Locog to manage the third of its three licensing tiers, the Olympic Games Programme, until the end of the year in which it hosts the Games. She says it has been the case for some time that the rights to the marks and iconography from each Games pass over to the IOC at this stage, meaning host city contracts will not have to be rewritten under the new regime.

“In December 2020 all of Tokyo’s brand assets will transfer to the IOC,” she says. “Sometimes you face opposition on your trademark, so we have a model in which the IOC is more involved with the trademark strategy and registration of all the Olympic properties, whether that’s the Games [Programme], whether it’s the Heritage [Collection] or others.”

As before, the Olympic Programme product line will consist mainly of souvenirs such as mascots, keyrings and t-shirts targeted at fans visiting the host country. But under the new strategy, the IOC will also endeavour to market these to a global audience as well and take a more active role in brand development and licensing guidelines.

Source: License Global

Alibaba

The IOC’s Worldwide TOP partnership with Alibaba has proved complementary to the new licensing strategy and the IOC’s attempts to take it worldwide. Prior to the partnership with the Chinese ecommerce giant, Allaman says the IOC had only planned to sell the three collections through licensee distribution channels in authorised territories and Locog retail programmes, but the firm persuaded the organisation to develop its own global online store to complement these sales channels. “We would have never had this idea to go into e-commerce by ourselves,” says Allaman.

The IOC will launch an Olympic store on Alibaba’s Tmall platform in China some time in Q4 this year, to take advantage of demand for products ahead of the Tokyo 2020 Summer Olympics and the 2022 Beijing Winter Games. The company will then launch the Olympic online store in the rest of the world, starting with Europe, Japan and the USA in 2020.

“We will have a store that is not exclusive in terms of distribution,” says Allaman. “It is exclusive in the sense that it is the Olympic Store but it’s not exclusive in the sense that of course we would give our licensees the right to sell on their own platforms.”

The Olympic online store will be branded as being ‘powered by Alibaba’ while fellow TOP partner Visa is expected to provide the payment provisions on the site.

Terrence Burns, a former senior vice-president, marketing services for the IOC and its former marketing agency Meridian Management, says new technology has been the driver in the IOC’s ability to deliver a global licensing programme now.

“One of the reasons the IOC hasn’t had a global licensing program before is that it was just too difficult,” he says. “We did attempt it when I was there, but the myriad of agreements with each NOC, the differing royalty rates that applied depending on which mark was used in which territory, and the ability to create an online outlet to purchase simply was not feasible.”

Allaman gives a sense of this complexity when she describes how the revenues from specific product lines will be shared.

“If we sold an Olympic Heritage Lacoste Mexico ‘68 polo shirt in Great Britain, then the British Olympic Association would receive its share of royalties,” she says. “And if we sell in Tokyo, Japan, that would be the organising committee [for the Tokyo 2020 Games] and we will apply the same principles across the board for collection and sharing of revenue.”

The creation of the Olympic Channel OTT service, another plank of the Agenda 2020 reforms, will allow the IOC to promote the global store when it is launched. Allaman says the Olympic store will sit on the streaming site during the Games to take advantage of the increased audiences during the event. Similarly, an 18-part series on the channel celebrating the fashion of the Olympics – including an episode about René Lacoste, the late designer and Olympian who founded the clothing line – will help to generate demand.

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