Live events are back and with them an opportunity for merchandise sales.As most nations put the pandemic behind them, live events are rebounding - with pent up demand set to drive attendance back to pre-pandemic levels.Millennials and Gen Z are eager to participate in festivals again - to listen to the music, join in the excitement of the event - and to shop for unique, limited edition merchandise.They’re Back!The 2022 season kicked off with Coachella (April 13-15 and 22-24) in Desert Springs, California. Attendance did not disappoint.With an average of 125,000 daily attendees at the sold-out event, the event could be seen as an indicator of the success festivals in Europe and Asia can expect to enjoy this summer.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 drews 175,000 attendees in pre-pandemic days. Austria’s Donauinselfes, the world’s biggest festival, drew 3 million attendees in 2019. In the US, Summerfest drew 830,000 attendees in 2019.The success of these events led to more events entering the market. In 2019 there were 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.A High Traffic LocationPart of retail success is being where there’s lots of traffic. Festivals have heavy traffic - and that traffic is younger consumers who are already big purchasers of ‘fanwear’.What started out as an opportunity for independent sellers to set up temporary stalls, has now attracted major brands who see this as another channel.The revenues can be impressive. In Coachella (USA) generated over $704 million in overall spending activity (including ticket sales) in 2016.Festivals have become an important platform for selling for both brands and independent sellers. 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.Sounds Like a SaleAccording to Barclaycard, Brits spent around £1.2 billion at festival pop-up stalls in 2019, 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. 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 WorldwideThe 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 generate more than $20 billion in revenues by the mid 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. Re-inventing the Classic Concert T-shirtToday, 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."It’s All About On Demand InventoryManaging 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.Delivery infrastructure that has developed as ecommerce surged during the past two years is helping get that inventory to the right place at the right time.