(AFP Photos)
One of the fastest growing retail opportunities are live events, especially music festivals.
Millennials are flocking to festivals - to listen to the music, join in the excitement of the event - and to shop for unique, limited edition merchandise.
These festivals can draw anywhere from a few thousand to a few million visitors over a 3-14 day period. Legendary Glastonbury festival in the UK draws 175,000 attendees. Austria’s Donauinselfes, the world’s biggest festival, drew 3 million attendees this year. In the US, Summerfest drew 830,000 attendees this year.
The success of these events has led to more events entering the market, now with 700 large music festivals in Europe and over 110 in the U.S. And this is only music festivals - we’re not even including film festivals, and festivals other categories of entertainment and hobbies.
Increasingly, savvy sellers are seeing festivals as an opportunity to sell everything from fan wear to unique hand crafted items - using a simple pop-up booth as store. For example, Coachella (USA) generated over $704 million in overall spending activity (including ticket sales) in 2016.
From major licensees of popular brands to independent sellers (many of whom started out taking booths at street fairs) festivals have become an important platform for selling. While events charge merchants for stalls (even the bands themselves have to pay for the right to sell merchandise at events), the limited time frame of the event allows sellers to charge higher prices, eliminates the ‘waiting for it to go on sale’, and of course there’s no shipping costs or returns to deal with.
Research by Barclaycard into the spending habits of UK festival-goers, reveals that pop-up commerce presents a growing opportunity for businesses, with those selling at live events benefiting from increased revenue, improved customer engagement and longer lasting loyalty.
According to Barclaycard, Brits are expected to spend £1.2 billion at festival pop-up stalls this summer, buying food, clothes, and other merchandise. Of those that attend festivals, four in ten prefer shopping on-site compared to online or on the high street. Engaged audiences, longer dwell times and a thirst for discovery create the perfect opportunity to connect with festival fans.
Top 20 Music Festivals Worldwide
(by attendence)
20. Primavera Sound, Spain and Portugal
Number of attendees: 175,000
Where: Barcelona and Porto
When: June 4-6, 2020
19. Glastonbury, United Kingdom
Number of attendees: 175,000
Where: Pilton, Somerset, Great Britain
When: June 26-30, 2019
18. Nova Rock, Austria
Number of attendees: 180,000
Where: Nickelsdorf
When: June 11-13, 2020
17. Outside Lands Music and Arts Festival, USA
Number of attendees: 200,000
Where: San Francisco
When: August 9-11, 2019
16. Coachella Valley Music and Arts Festival, USA
Number of attendees: 250,000
Where: Indio, California
When: TBA, but it has previously been held the second and third weekends of April.
15. Festival d’été de Québec
Number of attendees: 325,000
Where: Quebec City
When: 2020 dates TBD (but it usually takes place in July)
14. Exit, Serbia
Number of attendees: 350,000
Where: Novi Sad, Vojvodina
When: July 4-7, 2019
13. Untold Festival, Romania
Number of attendees: 355,000
Where: Cluj Napoca
When: August 1-4, 2019
12. Tomorrowland, Belgium
Number of attendees: 400,000
Where: Boom, Antwerp
When: July 19-21 and 26-28, 2019
11. Lollapalooza, USA
Number of attendees: 400,000
Where: Chicago
When: August 1-5, 2019
10. Electric Daisy Carnival, USA
Number of attendees: 400,000
Where: Las Vegas
When: May 15-17, 2020
9. New Orleans Jazz and Heritage Festival, USA
Number of attendees: 450,000
Where: New Orleans
When: April 23 - May 3, 2020
8. Essence Music Festival, USA
Number of attendees: 470,000
Where: New Orleans
When: July 5-7, 2019
7. Sziget, Hungary
Number of attendees: 565,000
Where: Budapest
When: August 7-13, 2019
6. Rock in Rio, Brazil
Number of attendees: 700,000
Where: Rio de Janeiro
When: September 27-29; October 3-6, 2019
5. Woodstock (Pol'and'Rock), Poland
Number of attendees: 750,000
Where: Kostrzyn and Odra
When: August 1-3, 2019
4. Summerfest, USA
Number of attendees: 830,000
Where: Milwaukee, Wisconsin
When: June 26-30; July 2-7, 2019
3. Montreal International Jazz Festival, Canada
Number of attendees: 2 million
Where: Montréal
When: 2020 dates TBA (2019 event was held July 6-27)
2. Mawazine, Morocco
Number of attendees: 2.5 million
Where: Rabat
When: June 21-29, 2019
1. Donauinselfest, Austria
Number of attendees: 3 million
Where: Vienna
When: June 21-23, 2019
An estimated 23 percent of Americans purchase artist merchandise on-site, according to Nielsen Music. "They bought their tickets, they’re in the door, a lot of them are going to the merch stand and not necessarily buying music,” according to Nielsen’s Matthew Yazge, VP brand partnerships.
U.S. festival goers spend about $344 per festival. Of this, 10 percent (or $34) is on merchandise.
From Woodstock to Worldwide
The festival economy evolved slowly and from a rocky start in 1969. The Watkins Glen Summer Jam in 1973 drew an estimated audience of 600,000, larger even than Woodstock.
Far from the hippie, peace-and-love archetype of Woodstock, today’s music-festival economy is a seriously big business. Globally, it is projected to generated more than $20 billion in revenues by the early 2020s.
At the same time, the link between music culture and merchandise is presenting important opportunities for artists to replace lost revenue from album sales with sales of fan wear. This is driving bands, and other entertainment to put more efforts into developing more extensive, well thought out merchandise.
Making Money from Music
“Music is part of the culture, and people shopping for [music related merchandise] are not limited to the music fans per se,” says LIMA senior VP Marty Brochstein in an interview with Billboard magazine. “Brick and mortar is taking the music [merch] category much more seriously.”
For example, beyond the regular music merch inventory regularly represented in stores, retailers have experimented with in-and-out programs, whereby a certain artist’s merchandise might get a high profile locations and big buy-ins for a certain limited period, according to Mr. Brochstein.
Overall, entertainment/character licensing remains the largest category, accounting for $118.3 billion, while corporate/brand trademarks generated $54.6 billion; fashion, $31.1 billion; and sports at $25.3 billion.
At artist-affiliated online stores, retail outlets, pop-up shops and concerts, fans are now confronted by an increasingly high-end variety of consumer choices: $240 denim sherpa jackets (the Weeknd), $1,050 thigh-high boots (Kanye West) and $1,095 Canada Goose bomber jackets with collars made of coyote fur (Drake’s OVO line), according Rolling Stone magazine.
As album sales tank, and more music is available online through services like Spotify, Apple Music and Amazon Music, artists are banking on merchandise to generate revenue.
Today, everything from screen printed t-shirts to $1,000 artist-branded jackets are creating what Rolling Stone magazine has called “music’s merch gold rush.”
Due to a booming market for vintage T-Shirts, it’s easy to presume fans only want reprints of classic designs, but appetite goes far beyond this. Mark Meharry, the CEO of artist-branded marketplace Music Glue, says: "You might think with a band like Iron Maiden it would be the classic album T-Shirts from the 1980s; but it is the new design for the tour that really races out the door."
Managing inventory is very tricky since most merchandise has a very narrow sales period. However, new technology is helping, with sales data being used to anticipate demand for a tour and printing-on-demand means acts can order extra shirts while touring and have them delivered to the venue within a matter of days.
The backbone of this is digital printing, which has solved the problem of speed and the need for small orders.