COVID-19: how the industry is coping across the globe – today, Madrid-based agency, Consumer Product Connection.
Spain is one of the world’s hardest hit countries by COVID-19 and its people have also experienced some of the strictest regulations. We spoke to Julien Barbier, ceo of Consumer Product Connection, to find out how the licensing industry is faring.
With a solid portfolio of brands, encompassing the luxury, children’s and entertainment sectors, Consumer Product Connection is a key player in the Spanish licensing industry. The agency holds the global representation rights for Chic&Love, which is managed in the UK by Licensing Link Europe; and local (Iberia) rights for Lucky Luke, Dennis & Gnasher, Zou, Gigantosaurus and Narcos.
Ceo Julien Barbier also runs the official e-shop for Spanish TV channel Clan. Combined, these businesses give him a clear picture of how the current COVID-19 crisis has impacted the industry in the country, which is currently the third worst affected in the world, with only the US and Italy experiencing more deaths and cases of coronavirus.
As of April 19, Spain’s death toll stood at 20,639, with the daily death rate peaking at 950 on April 2. April 19 also saw deaths rise by 410, the lowest daily increase since March 22, so it seems that the early signs of recovery are being shown.
Prime Minister, Pedro Sánchez announced a nationwide lockdown on March 14, which was then extended until at least April 26. Last weekend, Sánchez announced he would ask parliament to extend the ‘state of alarm’ until May 9. The state of alarm allows the government to act in a number of areas, including forced confinement and restriction of movement, intervention of business and property and more, for a period of two weeks.
For the past month, Spanish citizens have only been permitted to leave the house for essential work, grocery shopping, helping vulnerable people, medical reasons, or walking a dog. Children have been kept inside for the duration, but in his latest address, the Prime Minister said he would relax this rule allowing children to get some fresh air from April 27.
Non-essential business, is, as in the UK and many other countries worldwide, being carried out from home offices, while all non-essential travel is prohibited.
But in a digital world, Julien reports that the transition has been fairly smooth so far: “We have the capability to get in touch with everyone online, we don’t have to touch the product, because we are selling rights, so the digital way of working is a good solution.
“Obviously not having meetings, trade shows and not visiting retailers is painful, but more or less, the business can go on.”
There have been two main areas of disruption. The first, unsurprisingly is financial, with many invoices and MGs not being paid due to concerns around cash flow. The second is the cancellation of trade shows. Despite a huge shift toward digital commerce over recent years, traditional retailers are still a significant part of the Spanish licensing business.
Julien explains: “Over the last two or three years, we were moving from the traditional retailer to much more digital platforms, so the business model and the distribution was changing. But now not to have the traditional retailer open at all is a mess for everybody. So not to have the contact with them at trade shows, and them being closed is the second main problem for us.”
Despite this difficulty though, the online sales in the region have, like many countries, seen a huge up rise in sales in certain sectors. Through his work with Clan, Julien has seen sales increase on games and puzzles, educational games, books and magazines.
He continues: “It’s been like the Christmas campaign for us on ecommerce. Toys are also doing well. After a month at home, the kids have played too much with the toys they have, so they are buying play-sets and lots of other toys.”
And this accelerated focus on digital retail is the centre of how Consumer Product Connection is planning for the future, whatever that may hold. Julien explains: “We already knew we were part of that digital transformation and that will accelerate. We will push the online business, but that’s not something new, we were already thinking about it last year. All the companies in Spain have to make that transition, but now it’s a reality.
“So I think for the future, it’s just to increase that and take care of the online distribution. I think the main thing is to keep confident. I think regarding the future, it’s a little bit wait and see. We will obviously keep confident and keep positive, but we have too many doubts right now to make any decision regarding the future. So we need to work on the mid-term then long-term will come after that once we know exactly where we are and the timings we are working with.”
As for how business will operate in Spain when the climate returns to normal, Julien sees many of the online practices such as conference calls, working from home and virtual meetings as a positive, but thinks that all important personal contact will be welcomed back with open arms. “The Spanish people need the personal contact, it’s the Latin way. They need to meet people, they need to have contact.
“I think it will be a mix. We will be working online more in the future, it saves a lot of money and time. But to take time to get to know the other person, to see their showroom to understand exactly what they are doing, to see the warehouses they have, and the structure they have is still really important.”
The most positive thing though, to come from the crisis in Spain has not been working practices, as Julien describes: “It’s the positive mood of people. Everyone is very worried, but everyone is helping each other. People are reacting with huge solidarity. We are seeing this in business too. Everyone is saying, ‘sorry I can’t pay you’ etc, so it’s important to have compassion during this crisis.
“The change in mentality has been the best thing. Everybody is scared, and we have a lot of doubts, but everybody is in the same boat and the solidarity is very very important right now. It’s a big mess, but it will be alright.”