 |  News27.09.2017 // How to find new distribution channels for toysWe in the toy business can tend to get very focused on our existing (traditional) retailers. In markets like the USA, France and the UK, just a few retail chains per market have a very significant market share i.e. Walmart & Target in the US, the hypermarché and toy specialist chains in France and Argos in the UK and tend to demand a large degree of focus and care from our sales teams. But there are more distribution channels in which toys fit perfectly. The German toy market is unusual when compared to these other major toy markets. It has a very fragmented retail base, with its preponderance of independent toy retailers and not one retailer accounting for a very large share of the market, it is somewhat unusual. This difference shifts the challenge from managing one or two highly demanding super-sized retailers to ensure you can leverage as many listings/shipments as you need, to a challenge of managing a fragmented sales network and the need for more substantial sales infrastructure. There is a place for toys in almost every store One distribution factor that is present in mostly equal measure in all these markets though is the concept of ‘alternative distribution’. Away from much cherished toy specialists like Toys R Us, and highly valued but very demanding multi product retailers, is a different world where toys can be present but aren’t necessarily integral/essential to the retailer in question. While Toys R Us obviously must stock toys, and the mass market generalist retailers use the toy category to drive in store traffic and to ensure they capture as much family spending as they can, why would a book store, a furniture store or a multi-media retailer stock toys? Especially when toys are sold on a ‘firm sale’ basis i.e. the retailer buys them and keeps them, not like sale or return to supplier which is typical for books or multi-media for instance? Moreover, do these retailers merit focus and attention when they tend to take a narrow range of products from a limited number of suppliers? Alternative distribution for smaller toy companies The value to toy companies of such customers probably comes down to business strategy and place in the market. The 80/20 rule would probably suggest that such retailers are not worthy of the time of the sales departments in larger companies like Mattel, Hasbro or Lego for instance. Such non-core customers are more likely to be passed onto wholesalers by these big players. However, for smaller companies there may well be value in targeting such alternative distribution, because the value of the potential opportunity may well be more significant to a company that doesn’t have full distribution into all traditional channels. My own experience would suggest that sometimes it is easier to be one of a few suppliers in a particular category than it is to be one of many. For smaller companies, a broader base may mitigate the risk that gigantic customers pose in terms of ongoing sales/listings stability and inventory. These alternative retailers may sometimes appear to be uncommitted to the toy category – some years they are in, some years they are not, but the reality is that they do offer incremental opportunity. Sometimes they may increase their toy line around events i.e. a major book launch, or a particular season of the year. Toys can help them broaden their offer to the consumer and draw in more families to their outlets. Toy and toy themes for particular retailers While consumers may not be looking in such types of stores for toys specifically, the research I have conducted suggests that the average consumer does not think “I’m in a book shop, I am only here to buy books”, rather they look at and eventually purchase items which they want or even need, regardless of where they are when they buy them. Certain types of toys can fit very well with a particular retailer, i.e. the Lord of the Rings and The Hobbit film toys (& other merchandise) appear to have achieved significantly more in store space than the general line of toy products offered usually due to the clear link between the movies and the books they are derivative works of. Toys may not seem such an obvious fit with some of these alternative distribution channels, but they still offer revenue opportunity for those willing to step outside the usual and place a sales call. | 26.09.2017 // The power of digitalThe power a brand ambassador can bring to a new product can undoubtedly transform a toy into a one hit wonder or a long-standing hit with fans. Tony Norton form Norton PR reveals all. We have been ‘doing’ digital PR for years and in the toy industry this means using online influencers who could be brand ambassadors for a client’s product or service. However, the challenge has become how PR agencies utilise this trusted, user-generated content and reach those consumers across a more diverse comms platform than ever before. Today, there is a risk that PR agencies can only offer clients a finite digital PR programme; one which ticks the boxes for sending out product, getting reviews and coverage, but that’s where their role ends. But for the consumer, this is just the beginning. It is now a question of how that review/post/blog can be amplified, re-edited, re-issued and aligned with a much bigger client brief, and translate into tangible sales. User generated content is on the rise, predicted to surpass brand generated content by 2020. According to YouTube, video consumption grows by 100 per cent per year, with more child-directed viewing across an increasingly diverse range of comms channels. Print media will continue to be relevant, however, the digital age has made these titles better, more relevant and more connected to their audience. Planning PR campaigns that have an element of user generated content can be utilised across a host of social and online channels, as well as provide trusted news stories that reflect real people and real brands. User-generated content will surpass brand content by 2020. Tony Norton, Norton and Company Having one million views for a YouTube unboxing via a high profile influencer sounds like a major PR win. In reality, that comes at a cost as, unless you can track a sales spike to that one moment in time where they raved about a product, it’s all fluff with no substance. The challenge is to source those influencers on the up, not those who have already peaked. They charge the earth and there is no longevity around their review. As more PR companies recognise the value in digital content and the social web it's not farfetched to suggest that purely PR or digital agencies will disappear or morph into something new as skill sets merge. Digital tools, skills and knowledge have become standard practice in PR rather than the specialist skill it was. Working with digital PR practitioners guarantees campaigns reach and longevity. PR agencies must continue to battle for the share of a client’s media spend in which there is often a chunk for digital and influencer partnerships without real understanding of how the two can be aligned. As consumption of information becomes more focused on content and digital, PR and all its facets may be the best way to communicate your brand and product offering as they have a more in depth knowledge of your consumer and how to reach them. Tony Norton is the chairman of Norton and Company Marketing Communications. With 23 years PR experience, Norton has seen success with major children's brands including Thunderbirds, Bratz, JCB, LEGO and Crayola. | 08.09.2017 // September 2017: interesting toy events at a glanceThese dates in the toy industry you should remember in September 2017! 06.09.2017 Webinar: Insights into LIMA´s Annual Global Licensing Survey worldwide
09.09.2017 Children's Day Costa Rica
10.09.2017 Children's Day Honduras
19.09.2017 Moscow Licensing Summit Moscow, Russia
20.09.2017 Children's Day Germany
20.09.2017 Webinar: Anatomy of a Licensing Agreement worldwide
25.09.2017 Children's Day Netherlands
26.09.2017 - 27.09.2017 ICTI CARE Training Course – Introduction Ningbo, China
27.09.2017 - 28.09.2017 Expo Licencias y Marcas Mexico Mexico City, Mexico
28.09.2017 ICTI CARE Open Day Event Ningbo, China | 01.09.2017 // The 1st of September is the day of knowledge!This day is not only the first day of autumn but also it is the beginning of a new school year! The Company "Ranok-Creative" congratulates schoolchildren and their parents with this holiday and wishes much success and new achievements in a new school year!!! | 31.08.2017 // Why adults represent a relevant target group for traditional toysWhy adults represent a relevant target group for traditional toys We are all familiar with the joy on children’s faces as they leave a toy store the proud owner of a new toy. But our enjoyment of playthings does not end on entering adulthood. In some markets, the purchasing power of “kidults” is growing. Most toys are made for children but bought for them by adults. So there is nothing unusual about adults, whether parents or relatives, buying toys. Adults buying toys for themselves is not a new phenomenon either. However, there is still lots of potential here for the toy sector to produce and market traditional toys aimed specifically at adults. To illustrate the sales opportunities: an NPD Group study showed there has been a two-thirds increase in purchases of toys by adults for personal use in the last five years. The market research analysts at the NPD Group observed a 21% rise in 2016 alone. Getting down to the level of individual markets, kidults in South Korea are particularly enthusiastic consumers. This market already has so much potential that it is home to a dedicated annual trade fair – the Kidult & Hobby Expo. Kidults range across many age categories. Taking a look at the purchasing power of various age groups, however, the Millennials (18–34 year olds) account for around half of the spend among adults buying toys for themselves, followed by Generation X (35–54 year olds) at around a third. 18 percent of the Baby Boomer generation (55 years+) buy toys for themselves. Adults without children spend more money on toys for themselves than adults with children, and are also more likely to buy on impulse, for instance when browsing in a toy department. Still young at heart Scientists have long known that play is not a childish pursuit, but a creative one, encompassing board games, outdoor play, challenging building block projects, meticulously detailed model trains and much more. Some adults see playing with toys as the antithesis to growing old. Keeping active takes on increasing importance as we age, and so does having fun. Playing with toys is simply a welcome diversion from working life for some, but a passionate long-term leisure pursuit for others. People are also happy to spend a bit more money on this kind of recreational activity. The term kidults is more commonly applied to men. This is hard to justify, considering women are just as interested as men in finding enjoyable diversions. However, the impression remains that the more costly toys in particular with lots of technical bells and whistles are mainly purchased by men and also specifically marketed to them. Model construction and hobby toys as well as model trains are considered male domains, but tech toys also tend to fascinate men more than women. Meanwhile, traditional creative pastimes such as painting, handicrafts and crocheting are seen more as female pursuits. However, there is so much variety when it comes to toys that typical gender-based preferences are actually only apparent in individual areas. The increasing enthusiasm among adults for toys is surely also attributable in part to the DIY trend, which can be seen in the hardware and other sectors. There is an inexorable boom in this area – thanks to the Internet as well. Doing things for ourselves and following assembly instructions are just part of the appeal. Even more so, DIY has become a means of personal and creative development, allowing us to actively reshape parts of our life and giving us the freedom to frame our own rules. Products for kidults A few toy manufacturers have recognised the potential of this “big kid” target group. And it certainly matters that adults have bigger budgets than kids when it comes to buying toys. However, the companies must also satisfy the higher standards of grown-up consumers and try out new approaches to product design and marketing in order to offer this target group attractive toys. Adults as target groups of their own Given their purchasing power and desire to actively organise their leisure time, kidults are a relevant target group for the toy sector. Play has little to do with age, and a lot to do with fun. Babies and pensioners alike enjoy playing. To tap into this potential, manufacturers and retailers should consider how traditional toys might be developed and marketed specifically for adults. After all, a product for an eight-year-old won’t necessarily cut the mustard with a thirty-year-old. If kidults are recognised as their own target group, there are millions of new toy purchasers who are still young at heart and enjoy playing to be reached. | 23.08.2017 // Toy market India: demand for quality brands & STEM toysIn 2016, traditional toys and games in India grew by 6% and further growth is expected. The organized players are facing stiff competition from the unbranded Chinese imports which are being sold at cheaper price and thereby affecting growth. However, with more awareness of quality branded products, more promotions and new launches, the demand is slowly increasing for these brands. In terms of buying behavior for traditional toys, there is a gradual shift towards educational toys and arts and crafts as educated parents are focusing on education through entertainment. This has resulted in the increase in the demand for STEM toys. Pre-school and construction continued to be the fastest growing categories with value growth of 20% in 2016. Due to extensive promotional campaigns and increasing awareness in urban areas, Lego remained the top-selling brand in construction. In terms of seasonality of traditional toys, sales remain high during the months of May and June when most of the schools are closed. It is during this period that parents take their children out and buy new toys for them to play with during the summer vacation. In India, expensive tech toys such as drones and robots remain very niche due to the high pricing and laws and regulations on their use. In India, flying a drone comes with legal proceedings as it is compulsory for the user to obtain prior permission from the authorities to fly it. In addition, the import of drones is banned in India, limiting international manufacturers from carrying out operations in India. Competitive landscape Due to the increasing awareness of branded products and the growing popularity of action figures and cartoon characters, the demand for international brands is on the rise. International licensing of toys is an important factor in the toys industry. This has led to the increasing number of international licensed products in the country. As of 2016, 6% of traditional toys and games sales were through licensed products, although the figure can reach as high as 50% in some categories, such as action figures and accessories. All leading toys and games specialist retailers, such as Funskool India Ltd, Reliance Retail Ltd and Simba Toys India Ltd, were expanding their presence by opening more physical stores and also by listing their products in leading e-commerce websites like amazon.in and flipkart.com. Many manufacturers are also tying up with different movies to increase the sales. For instance, Simba has taken the license for Bahubali 2 whereby they launched weapons such as swords prior to the release of the movie. The traditional toys category is expected to grow further but it continues to be impacted by the rising number of imports from China. Many of these imports are illegal and are sold through unorganized retail at cheaper prices, thereby affecting the growth. Small and medium toy manufacturers are struggling to survive in the industry due to the high import duty levied on the raw materials used in the manufacturing of toys. The import duty on raw materials is as high as 20%-30% compared with 5% for the import of a finished toy. As a result, finished toy imports are increasing from countries such as China, the US, and the UK, which negatively affects the growth of the local players. Licensing The influence of the media has been playing a key role in the licensing of toys. Toy manufacturers have been benefitting from the success of shows, such as Motu Patlu, Chota Bheem and Shivay, which have been extremely popular amongst children. In addition, with the digitalization in place, children have been using different media devices such as tablets and mobile devices to watch their favorite shows and movies which has been some of the leading licensing brands. Licensing of toys increased and this trend is expected to continue. Categories such as action figures and accessories, dolls and accessories and games and puzzles have been the major categories which generate sales in the licensing segment. Also, categories such as plush and model vehicles are expected to increase their share in the licensing space with manufacturers licensing the characters of Hollywood movies and characters. Licensing remains a challenge for toys and games in India as counterfeit versions were widely available. Many counterfeit products from China are being imported and sold in India through e-commerce websites at a discounted rate. Despite trying to create awareness through social media and other media platforms, a lack of stringent laws is creating a hindrance to restricting the flow of counterfeit toys. | 18.08.2017 // The future of play: getting products in time to marketThe e-commerce retail market is competing over who will be the quickest in getting their products into their customer’s hands. This may spread from retail to wholesale, as suppliers will face demands for faster delivery times. Speed to market will challenge price as a major driver. Bricks and mortar retailing is very much about immediate gratification. When it works correctly, a consumer walks into a store, quickly finds what he or she wants, purchases it, takes it home and uses it. That process can take minutes to hours. One of the challenges that e-commerce providers initially faced was delayed gratification as they asking consumers to wait until they could touch what they had purchased. That, of course, has changed. Amazon now offers 24-hour delivery. Not to be outdone, Walmart has responded by planning to have eight new warehouses open by 2017. That plus new systems are expected to speed up direct to consumer delivery times. 24-hour service is going to eventually seem slow as Amazon proposes “…a future delivery system … designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, also called drones.” And if you think that’s fast, Jimmy John’s, a fast food franchise, was promising to get your food to you in 15 minutes. They called it “Freaky Fast” but it got a little too freaky and there were a few accidents. That hasn’t stopped Uber, which in some cities, is promising to get you your food in 10 minutes. Whether its 10 or 15 minutes are a reality or simply an aspiration, it sure beats waiting 45 minutes to an hour…particularly when you’re hungry. Fast delivery over cheap prizes The power of speed is so great that some commentators are beginning to express the thought that getting it there the quickest is replacing getting it there the cheapest as a major value to consumers.
This is not the first time in history we have experienced a rise in speed to market expectations. In the age of steamships, passengers were prepared to take a week or two to cross the Atlantic. You may have noticed that air travel, promising hours to Europe, has supplanted passenger ship travel. I believe quickest time to will challenge lowest price as a major motivator in determining from which companies retailers will choose to purchase their products. If you think about it, doesn’t it seem odd that in an age in which the “New York Minute” (getting everything done instantly) has become globalized that retailers are willing to wait up to 60 days to get an order from the other side of the world? Delivery time might change whole infrastructures Wouldn’t retailers and suppliers be better off if they could control their inventory by being able to restock in days rather than have to wait months? How many dollars are wasted by retailers closing out successful products because the inventory level turned out to be far more than needed? Why not carry less inventory and get an additional turn if you can shrink time from purchase order to delivery by weeks or months. It is this stress on speed that will change some dynamics. For example, why wouldn’t a Chinese company like Li & Fung have forward staging areas in Europe or North America? China’s wage rates are moving inevitably higher so why not move at least some production to the U.S. and do final assembly here. The Japanese did that with cars. Why can’t the same happen with consumer products? In 2013 I began watching the San Diego / Tijuana region as a rising assembly manufacturing center. They offer a shorter supply chain and just in time manufacturing, when you add the need for speed, I think we will see this area continue to boom. Finally, due to the current Presidential campaign, we have all seen the disaffection felt by workers who have lost their jobs to offshoring. No matter who wins, this issue will need to be addressed. This could very well mean that we will see incentives for keeping jobs in the US and disincentives for moving them abroad. This could also have an impact on where manufacturing takes place. | 10.08.2017 // August 2017: interesting toy events at a glanceThese dates in the toy industry you should remember in August 2017! 06.08.2017 Children's Day Uruguay
09.08.2017 Los Angeles YPN Summer Gathering Los Angeles, USA
09.08.2017 India Licensing Expo Mumbai, India
16.08.2017 Children's Day Paraguay
20.08.2017 Children's Day Argentina, Peru
23.08.2017 - 24.08.2017 ICTI Training Course - Introduction Shenzhen, China
25.08.2017 ICTI Care Open Day Event Shenzhen, China
29.08.2017 - 30.08.2017 Expo Licensing Brasil Sao Paulo, Brazil
| 04.08.2017 // Toy Shop UK 2017's Independent Toy Awards open for entriesVoted for by the nation’s independent toy retailers, winners will be revealed on August 30th. Nominations are now open for Toy Shop UK’s independent Toy Awards. Suppliers have until August 16th to submit their hero products to any of the 25 categories, including collectables, construction, electronic, licensed, outdoor, special needs and more. Voted for by the nation’s independent toy retailers, winners will be revealed on August 30th, where a number of suppliers will be rewarded with a gold, silver or bronze medal logo. Plus, the £100 entry price ensures start-up toy firms can compete with the global manufacturers in the toy space. | 31.07.2017 // Independent Toy and Gift Show moves to May to accommodate 2018 product launchesHosted by AIS, the show has been shifted from its April slot to take place on Tuesday, May 1st and Wednesday May 2nd 2018 at its usual haunt at Cranmore Park Exhibition Venue. The Independent Toy and Gift Show has moved to an early May slot next year to better accommodate the product launches of major UK suppliers. Hosted by AIS, the show has been shifted from its April slot to take place on Tuesday, May 1st and Wednesday May 2nd 2018 at its usual haunt at Cranmore Park Exhibition Venue. The 2018 show will offer up ranges from both major toy companies and suppliers popular with independent toy buyers, moving to the later date to offer ‘a show full of diverse, innovative and exciting products from across the toy anf gift sectors.’ Hosted by Play-Room, the toy division of the buying group Associated Independent Stores, the show is open to all independent toy buyers. Play_room will be celebrating ten years since its launch in 2008. “We felt that the show was too early last year and we were looking for a later date,” Miles Penhallow, head of toys and childrens’ gifts, AIS, tells ToyNews. “The only date available transpired to be in May due to other shows. We have spoken to all our top 20 suppliers about this and they felt that logistically, it would be easier to plan for both May shows and that more new samples would be available.” Exhibitor bookings for next year’s Independent Toy and Gift Show will open in October. |
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