Viewpoint
run by Sainsbury’s is said to have had its own issues, the fact that people are prepared to queue for up to two hours to let their kids experience a brand for as little as 10-15 minutes speaks volumes. Where cost is a factor, associating your brand with an existing event such as Hasbro’s Nerf with Team Extreme, can deliver the value as well as making the numbers work. But it is essential that you exploit your activity in order to take ownership, and deliver the brand experience and values to your consumers. This may well be through additional support activity using more trusted media platforms such as TV or social media, but when you get it right it can pay off
many times over. Good PR is also a requirement, and LEGO has
shown what can be achieved if it’s done well. From the huge Christmas tree at St Pancras, where consumers could only take a picture of the product, to their recent World Lego Map on the South Bank during the Olympics where kids were involved in producing the fi nal model, consumers love to try before they buy. In taking the argument to the fi nance director, it should not just be about allowing consumers to get their hands on the brand and experience it, it’s also about creating content for future use. We’ve all seen Hasbro’s US-based Hot Wheels Extreme event, because we heard about it
through PR, or we read about it and watched it on You tube; failing that, we have seen part of it in the recent ads for the Hot Wheels brand. This is the perfect example of Hasbro’s desire to see themselves as an entertainment company, rather than a toy company. If playing is not entertainment then it’s not real
play, so it makes sense to look at how you deliver your brand to your consumers before they buy. TV, digital and good PR should always play a part in your plans, but when you start to plan for Summer 2013 (when the sun will shine!), think about how you can get your brand into their little hands before they ask their parents to buy your products.
Brian Parrish
Why are we all committing suicide?
For years now we have all been worried about Argos, Tesco, Asda, etc, but today’s threat is even greater. A good percentage of toy retailers will remember when the Argos Catalogue fi rst came out; we all felt doom and gloom, and most of us were put off from shopping there. But now the independents and Toymaster members are fi ghting each other by selling on Amazon. The biggest threat of all is Amazon itself; we independents are paying them 15% of all our sales, which funds Amazon’s expansion, thereby leading to more
and more toy retailers going out of business. We have only been selling on Amazon for approximately four months now, and the more business we do with them, the worse our cash fl ow and overall profi t margin gets. For any chance to be on the front page of Amazon, after taking into account their 15% commission, postage and VAT (which I think most retailers and manufacturers still think is 15%), most items are actually being sold at a loss. Other than the items we would like to clear, we compare the costs of selling on our own site and on Amazon, and mark the product up accordingly. We are better off giving our own customers a 10% discount than funding Amazon’s growth by giving them 15%. One example involves an item being sold at
£52. Working it back to cost price, this retailer was losing £1.75 and giving free delivery, which had to have cost him a minimum of £4.
Add staff time and packaging into that, and he was losing at least £6.50 on every one sold. This was not a clearance item; it was a regular everyday purchase. Amazon only release funds to you every 14
days, then it always takes fi ve days to actually get to your bank account. Not only do we pay them 15%, but they have our money on deposit for up to 19 days; you can get money to China in 12 hours! Needless to say that after Christmas we will only use Amazon to clear merchandise that we want to get rid of. Every other retailer should look closer at what, if any, profi t they actually do make. Yes, it does increase turnover, but at the expense of profi t. Would you walk into a major retailer and say, “Here’s £1,000, put it in the till.”? This is effectively what some online retailers are doing with Amazon.
“As the Customs Advisor to Equitoy, I have been able to save members many thousands of pounds by identifying the correct rates of duty for their imported product”
Mike Hodge Customs Advisor Mike Hodge Associates
Contact Alan Milne for further information. Tel: 01580 240819 Fax: 01580 241109 email:
info@equitoy.co.uk web:
www.equitoy.com 52 Toyworld
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