Follow Us Follow on Facebook Follow on Twitter Follow on LinkedIn Subscribe
 

Law and the Business of Furniture

Jerry Cohen Law and the Business of Furniture blog.

E-Commerce and Licensing Among Top Industry Issues in 2016

February 19, 2016

As I speak with furniture industry clients and friends, two issues look to be on the top of their minds as we look ahead in 2016: e-commerce and licensing. Of course, these are not the only two issues people are concerned about, and their importance depends on your company and its market. But they have the industry buzzing, and it’s a good time to recap some of the key legal and business aspects any businessperson in the industry should consider.

E-commerce: an essential part of your in-store experience

2015 showed that while e-commerce was continuing to change our industry, it was not going to displace traditional brick-and mortar stores. In fact, we’re entering 2016 with some of the biggest and best furniture stores ever. As this report by Blueport Commerce shows, Warren Buffet’s Nebraska Furniture Mart opened a 560,000-square foot store in Texas, and HOM Furniture of Minnesota opened its largest store.

So where does e-commerce fit in for companies that have physical locations? It’s an essential part of the browsing and buying experience, particularly for the millennials whose first home purchases are driving industry sales. You need to be ready on both fronts, and understand how your stores and your e-commerce experience complement each other. You invest in making your showrooms and stores a carefully crafted experience for every potential customer—think of your online presence as an extension of that.

E-commerce can help drive sales, but don’t forget that it comes with its own set of legal traps, such as thorny terms of service issues and rules governing “I agree” buttons, as I wrote about in May.

Licensing: celebrities and beyond

Celebrity licensing deals are exciting. When you match the star power of the right person with the right furniture or home furnishings product, consumers flock to make that element a part of their homes. For furniture companies looking to break into new markets or reinvigorate a product line, adding a celebrity persona into its marketing mix can be just the ticket to driving sales.

But as I discussed in November and also noted in this excellent article by David Gill, celebrity licensing deals come with risks and traps. Celebrities are people. They require research, have flaws, and things can happen. Any celebrity licensing deal needs protections against these risks.

Of course, licensing is by no means limited to celebrities. Even more routine deals can open doors to new markets. Still, protections against risks are critical to get right. You have to define carefully what you are licensing and the obligations in the deal. Some typical issues include:

  • Who owns the designs?
  • In what territory will the products be sold? This affects the way you would handle various registration and infringement protection and defense obligations.
  • Is there a right of termination if a certain amount of sales is not met?
  • When the license ends, what rights does the licensee have to sell existing inventory?

These are just some of the important questions in a licensing agreement. As a general rule, think of best-case and worst-case scenarios, and you will able to manage these opportunities better.

What are the issues at the top of your mind in 2016? Comment below, or email me at jcohen@ctswlaw.com.

This blog is intended to provide basic and useful information but not legal advice.  As legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing provided in this blog should be used as a substitute for the advice of competent counsel.  We recommend you consult a lawyer to ensure that the information provided, and your interpretation of it, is applicable to your particular situation.