Toon time - character watches - Special Supplement: Apparel Merchandising

Discount Store News, April 1, 1996

Mass merchants are clocking in big business from men's and women's character watches. Not long ago, it was a common belief among the watch industry players that character-licensed goods were just child's play. Sure, Disneyland managed to sell tons of Mickey Mouse watches, but would the concept take off on a large scale in the mass market? The recent development of the men's and women's character-watch business at mass market stores proves it can.

Adult character watches at Hills make up 60 percent of the timepiece mix. At ShopKo, the business is enjoying its greatest growth to date. This year, merchants plan to increase the category's selection (now 20 percent of the mix) and space. Wal-Mart devotes substantial space to Looney Tunes and Disney, while Caldor and Bradlees showcase character watches in front-of-the-store glass cases.

Leather- and metal-band character watches retail for up to $50, while speciality models that incorporate illuminated dials or melodies sell for as much as $65.

Retailers say that margins on some products are not as high as they would like, but the incremental growth of the character classification, especially over the last two years, has made up for it.

"Being in the character-watch business has been a learning curve for us," says Sean Gildea, a merchandise manager at Timex. "When we first got into it, we thought it would only sell to kids. But the adult business has turned out to be huge." Since Timex introduced its first Disney theatrical watch - a Snow White model in mid-1993 - its adult character business has grown 900 percent. Today, its No. 1-selling Lion King watch is a unisex style, with a braided leather band. Gildea expects the business to sprout by another 35 percent this year, receiving a boost from two Disney theatrical releases: "The Hunchback of Notre Dame" and "101 Dalmatians," which will be supported by a live-action film in the fall.

Adults are also wild for Winnie the Pooh, which is usually aimed at the pre-school set. Timex's Winnie line is "a hit" at Hills, according to Donna Kessler, an accessories and watch buyer. Kohl's has expanded its adult Pooh assortment "tremendously," reports Gildea.

"The media is making adults feel comfortable with character-licensed accessories says Kathy Steirly, vice president, dmm of ladies' accessories at ShopKo. "Mickey and Looney Tunes reach out to a broad audience. For the adult customer, they are images of nostalgia, signs from their childhood."

Watchmakers benefit from the studios' broad-based campaigns. "When Disney backs `The Hunchback of Notre Dame' with $150 million worth of advertising and marketing support, how can we go wrong?" asks Gildea, adding that retail reaction to the line has been "incredible."

Armitron, which holds Looney Tunes and Garfield licenses expects to see double-digit growth in the adult character business. "The entertainment companies get more dynamic each year," says Jerry Dikowitz, vice president of marketing and advertising, noting that his firm hopes to catch "Space Jam" fever with a license to produce watches based on the Warner Bros. film starring Michael Jordan and the Looney Tunes crew.

Character watches are most often purchased by adults as gifts or for themselves on impulse. Watchmakers are helping retailers amplify impulse buys by lacing products with value-added features like glowing faces and melodies.

These specialty-character watches are helping retailers push price points. "The customer will pay whatever she feels the watch is worth," says Kessler, "and if there are enough features for the price, the watch will sell." Hills' prices stretch as far as $59.97. With this price elasticity, Kessler notes that Hills' competition has been able to extend beyond the Kmarts, Wal-Marts and Targets of the world to some department stores."

Steirly of ShopKo says that specialty watches "are a way for us to communicate added value to the customer." She says that incremental sales growth of high-ticket character watches - on average $39.99 retail - gives the category "definite room to grow."

Venture sells watches for as much as $60. "Hot licenses can be great in watches," says Jessica Woodward, dmm of accessories. "Our objective is to be the customers' first-choice destination."

Armitron is counting on its EL line of electro-luminescence watches with glowing dials, as well as collections with see-through dials and mood watches that have faces that change color upon contact.

Timex is offering watches that feature lighted dials and melodies.

The influence of sport/outdoor looks extends the price point further, sometimes as high as $65 for a character watch with a metal band.

In addition to the need for innovative product, retailers have to create compelling presentations. They are channeling the marketing energy from the studios and POP materials from vendors to make their watch exhibits exciting.

This month, Target debuts a counter case designed exclusively for the chain by Timex. The glass-top unit houses 70 to 80 Disney watches. "Target is willing to take a chance on our properties. They'll take all the styles initially and give them a chance to sell, and if they sell well, they'll ask us to create exclusive styles and displays for them," says Gildea.