face-to-face
with Lucy Williams
Tesco’s category director for toys, sports and nursery, Lisa Willams, talks exclusively to Toy World about the challenges facing the retailer and the opportunities for the toy trade.
From Tesco’s perspective how is the toy
category performing at the moment? Toys is a pretty buoyant industry and it’s a growth industry. It’s amazing that in the current environment
How did you get started in the toy
industry? I took a job on Kingfisher’s graduate scheme – Kingfisher owned Woolworths at the time - but I actually worked in John Lewis’ toy department as an undergrad and loved it, so my first experience in toys was from about 1990. I then started working at Woolworths as a confectionery buyer, before moving into stationery and toys and never really left toys. That’s what the toy trade does, it grabs you and keeps you. So I ended up as the head of trad- ing for toys at Woolworths and I left in 2006 and came here [Tesco]. I worked for a year on the international side of
Tesco, helping to set up the American business with Fresh n Easy, then I moved into the UK division and now I run toys, sports and nursery.When I first joined Tesco all the buyers here were saying: “Tell me all the secrets about Woolworths, what were your cost prices ...” and I refused, because I had a lot of good friends at Woolworths and kept in touch with them, so I didn’t divulge any great secrets. Now nearly half of my buying team are ex-
Woolworths. When I left, Woolworths was probably doing about £300m of toys and Tesco was doing £150m or so, but Woolworths was only making £40m a year on £1.4b of turnover. I still say to my team that the best training to be a great buyer is to work in a challenged business, because you care about every penny and you need and respect your suppliers.
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parents are still prepared to invest in their kids and won’t let them down at Christmas. Which means our responsibility as an industry is to give more enjoy- ment for the same amount of money. Toys need to continue to get better and we need to understand the consumer better. Everyone has differing views on Tesco, and I bore suppliers rigid about how big an opportunity Tesco is, but we have a strong vision of what we want toys to be here and a team of toy experts dedi- cated to building a great toy range for the long term. There’s still lots to do: we’ve got online, we’ve got in- store and it’s going to be a long game for us, which means steady growth to build a bigger, broader offer – and our suppliers understand we can do that. When you have 20 million customers a week, you need to work hard on building the broadest possible offer, because customers can choose where they shop. But by using the insight gained from Club Card we can see what mums want and spot the opportunities. Then mums can see the range we have in-store and know we’ve got what they want.
How is the online environment shaping up?
The democracy of online is a huge opportunity. Lots of customers just shop online but at Tesco we have a 20-30 per cent overlap of customers who buy online and buy in-store. It’s a different chan- nel opening up and a great opportunity for smaller suppliers to get themselves in the shop window and drive footfall to their ranges. Plus, they can take small steps and by working with Tesco, they can start small and see which consumers are shopping. Online is a lot easier too: there’s one depot, one stockholding and one product plan. Currently, we have 4-5,000 toy lines online with a
programme of range extensions planned. We need to improve the shopping environment and make the online experience really fun and not just a trans- actional site. Toys should be fun to buy, even for parents, so online has to be easy to navigate as well as informative and educational, which is a good challenge for us.
You’ll see more of that coming through this Christ- mas and next year. We will improve our online envi- ronment and it won’t just be a white site and purely transactional based on product and price. We’ll make the site easier for mums to navigate (because it is principally mums), inform her better about the products and help make her decisions about what toys are great for an eight-year old boy, for example. But we will also make the site a bit more exciting for kids too. Arguably, that’s where toy retailers will show their mettle, whether they are really serious about en- gaging in the toy shopping experience or not.
How far are you along in building this
much broader range? We’re about halfway there in-store, but on the web I think we’re only about 10-20 per cent there. Being a great toy retailer online is challenging because the audience is both kids and mums, so it’s about being a great environment but also great value. The lovely thing is you can change it so quickly, far quicker than changing hundreds of stores. There are still some suppliers who seem ner-
vous about dealing with us, which is frustrating because of this team’s heritage in toys. Yes, we do trade toys hard but we’re in an environment where we’re delivering really good growth and we’ve been able to deliver really good growth for our suppliers too without messing up the market. I want the toy industry to work really well and expand, but I work for Tesco and I need to drive good sales. At the moment we’re getting good results and the market is healthy - tough - but healthy, as you can see from The Entertainer and Toymaster doing well, so everybody’s getting on.
How does Tesco plan to grow its
business going forward? Obviously we’re not going anywhere, we want to build and for some of our suppliers that means building globally, but to build in the UK we’re willing to take risks, which is maybe what will set us apart. At the moment we’re number two or number
three in retail terms. In the first half of 2011 we got to within a few hundred thousand of Toys R Us according to NPD Consumer Panel, and, looking forward, we want to grow sensibly and find new ways of improving that. But first and foremost we’ve
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