Viewpoint Tony


Whyman Director of


Childhood’s Dream, Winchester childhoodsdream.co.uk


Can the high street toy shop survive in today’s web-enabled world?


This really should not be a question. Of course there will be a role for the high street toy shop; it’s just that the role is changing. What will stay the same is that, to survive, the retailer must add value to the products they are selling. The web has changed the calculus by which value is added, and the future belongs to retailers and suppliers that understand how this has changed. The emergence of the web means that retailers, especially independent retailers, can no longer just be stockists, they must also be part of the marketing chain. However, this only works when their suppliers also understand this and have an appropriate online brand management strategy in place. The future belongs to the suppliers and retailers that work in partnership to exploit the potential of the internet whilst avoiding becoming its victim.


Dealing with the web Consider the case where a supplier implements a national advertising campaign for some toy; many different forms of media may be involved. It may, but not necessarily, include the use of licensed characters. The key objective is that by the time the customer enters the shop, they have already made up their mind to buy the product. Failing that, the brand recognition is such that, when they see it on the shelves, they will implicitly prefer it over another. Distribution is an important part of the campaign. After all, there is no point in investing in all that advertising if, when the customer comes to the shop, the product isn’t there. In the past this meant getting it into a shop in just about every town in the country at the same time. For the retailer these were attractive products, as all they had to do was put it on the shelf and take the money. Covering the first 70-80% has always been easy. Get


a product into a few national chains and you have covered the prime retail locations and a large chunk of the shopping population. The bother – and cost – was getting it into the rest. Small shops in out-of-the-way locations, or even just your average market town, are comparatively expensive to service and as you get nearer to 100% coverage the cost of each extra 1% starts to rise exponentially. However, the web has changed all this. Get a


product online at an e-retailer and you have made it available nationally with hardly any distribution cost. A successful marketing campaign makes a product into a commodity. It doesn’t matter to the customer where they get it from, you just want to ensure access wherever they are. The e-retailer operating out of a single distribution


depot on an anonymous industrial estate will always have a much lower cost base than the high street shop; seen as a cash cow by landlords and tax collectors alike. The e-retailer will always be able to undercut the high street shop and ensure that even those that do stock the product will lose enough sales to hardly make it worth the bother. Because of this, the independent high street retailer


really has no future with heavily marketed products. The retailer is needed neither by the supplier to ensure distribution, nor by the customer who can get it cheaper online or from the nearest major retail centre. At this point, some would start writing the obituary for the independent shop/small town chain. However, this ignores the fact that there is still plenty of potential to add value, but not as a mere stockist. To add value in today’s world the independent shop has to be part of the marketing chain. The downside of clever marketing is that the product can easily be forgotten. Unless the economies of scale are large enough, to get to a given price point and cover the marketing cost can mean that the design/ production budget for the toy is too low, the product does not live up to the marketing, and the consumer starts to wonder why they bought it in the first place. Any industry can have its ‘Ratner moment’ or have a CAMRA knocking at its door if it takes its mind off the product. Some would argue that this has already happened to the toy industry, and point to the rapid rise in recent years of many new small suppliers that focus on design and product quality as a justification for this view. In the same way that CAMRA in the 1970s stimulated the growth in small micro-brewers in reaction to the heavily marketed but bland beers of national brewers, in the toy industry we are seeing the bottom up reaction to formulaic marketing campaigns that project an image that the product does not live up to. It is this reaction that provides the independent toy shop with the opportunity to add value and to re- establish their market. Some call these types of toys ‘slow toys’; personally,


I prefer ‘design-led’ as a suitable moniker. But regardless of the name you give them, this is a toy where all the effort (and budget) has gone into designing and making the toy; you can get the packaging in any colour you like...as long as it’s brown. It’s the way a small supplier can get into the market and build a product base without the high cost of marketing and the economies of scale that they don’t yet have. That is by making a product that can be sold in its own right without the support of national marketing or licensed characters. These toys appeal to aspirational parents; those who


are looking for something that gives their children an edge over others, who are looking for toys that do more than give a quick thrill of a toy where more thought went into the packaging than the toy itself. They are also people who have money. The only problem is making them aware of the product’s existence, and this is where the retailer comes to the fore as part of the marketing chain. By that I mean the only way that potential customers can find out about such a product is by seeing it in a shop. The pure online retailer just cannot help here; think how difficult it is to find a product on Amazon that you didn’t know would be there in the first place. It’s not all easy though, as these toys pose a challenge to the retailer who now has to think about how to sell these products. You can’t just pile up the boxes anymore; you have to display and market the product. The toys have to be out of the box, and you have to


think about how the toys work with each other. The reward is that you are not just part of the marketing chain, you are the marketing chain, and you are back again adding value. Customers will come to you to find something more than the mass market products that are constantly being pressed upon them and, once again, you can justify your mark-up. The supplier has also to understand just how important the retailer now is to the marketing of the product, and what must never happen is the retailer being undermined by an online e-retailer. When you are relying on the high street retailer for your marketing, the e-retailer is just taking sales away from the person developing your market, reducing their interest in the product and ultimately undermining your market. The fact that marketing, in the sense of an advertising campaign, is not an important part of your strategy does not mean that you do not need an online brand management strategy. Indeed, it makes it essential.


Personal experience We were recently offered a range of balance bikes for sale. The range was far bigger than we could possibly store in the shop (or want to), and the supplier had (un)helpfully provided a direct marketing website with the full range on it at competitive prices and free delivery. They were shown the door pretty quickly. As an exercise in how not to support the retailer it was a classic. Yes, we could have a few samples in the shop, but if the customer liked the product, checked online and found a design they preferred, we get neither the sale nor commission. Being someone else’s unpaid shop window is not what we are about. On the other hand, another supplier with a wide


range of dressing up clothes provides a retailer-only accessible website for direct ship sales and restricts this to less popular ranges and sizes. Perfect. We still get the sale when the item the customer wants is not in stock, and by restricting popular sizes this limits its use to those retailers who are making a genuine commitment to the product. For a supplier, online brand management must start with a simple question: are our retailers a significant part of our marketing plan? If the answer is “yes” then the focus has to be on retailer support. There should be no price competition online from retailers that are not part of the marketing effort and, as a general statement, no pure e-retailer can ever be a realistic part of the marketing effort. When the retailer is part of the marketing chain, sales by e-retailers are parasitic and serve only to weaken your own marketing effort. This is not to say that the high street retailer should not also have an online presence because customers expect a website. It is an important part of the marketing to give a 24/7 shop window and allowing the customer to enhance a visit to the shop with browsing the website before or after the visit. Our website is an important way of marketing the


products we sell. It does not list all toys under the sun, but those we have selected are our type of toys, and customers that like our type of toys know that it’s worth browsing the site to look for more. The website is often used as a first point for selection, to create a short list before visiting the shop, or to co-ordinate purchases with grandparents and other relatives. Direct sales are only a part of the equation. Online brand management is, however, just as important to a supplier that does rely on the traditional advertising model. In this case, you are looking for online sales as a result of your marketing effort and you will be less bothered by retailers losing


Toyworld 43


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72