Chatting with the Industry - The Toy Book by linxiaoqin


									  Chatting with the Industry
   Specialty Toys & Gifts spoke with specialty manufacturers and retailers to get their
take on marketing, merchandising, and distribution strategies; industry trends; and how
they keep their customers happy.

                         Jonny Girson            Who is your target consumer, and how do           How do you differentiate your store to at-
                                                 Towles: Those who are thoughtful about the        Girson: Our targeted consumer and customer
                                                 you engage them in your store?                    tract and keep customers?

                         The Learning
                                                 things they buy. They put effort into what they   are possibly two different individuals. The
                         Prairie Village, Kan.   pick out, and seek unique and special items.      consumer is anyone, though primarily chil-
                                                 We engage them with knowledge (both about         dren, who plays with toys. The customer is
                                                 product and child development). We want to        anyone who will buy a toy for “the consumer.”
                                                 let them know the provenance of what we           I would say our typical customer falls into two
                                                 carry. The more info we have, the better they     main categories: adults ages 25-49 buying for
                                                 feel.                                             their kids, nieces, nephews, and kids’ friends.
                                                                                                   The second, but growing, market is the grand-
                                                 Holliday: Our target consumers are mothers        parent: adults ages 50-75. We engage both
                                                 and grandparents. We engage them in our store     groups by having an incredible staff who re-
                         Tim Holliday            by following a sales process that is proven to    late well with our customers. They’ve been
                         owner,                  work. This process starts with a greeting; con-   hired to develop a relationship with the cus-
                         Children’s              tinues on with dialogue about them, their fam-    tomers. We educate our customers with
                         World                   ily, and so on to help us get to know them and    friendly staff and many open demos where we
                         Sarasota, Fla.          their needs; and then it goes to product infor-   can explain the features and benefits of what
                                                 mation and demos, which we are big believers      we sell.
                                                 in. We also do specific in-store play days and
                                                 other events to draw people into the store, so
                                                 people do not feel like they have to come in
                                                                                                   What do you see as the major trends affect-

                                                 just to buy something. We also have a U.S.        Kimber: The major trend that we witnessed
                                                                                                   ing your business in the year ahead?

                                                 Post Office inside our store, which we oper-      last year was the shift of business from spe-
                                                 ate. We engage the customers from the post of-    cialty retailers and mass merchants to online
                         Tim Kimber              fice while they are in line, by playing games     shopping. We expect that this will continue into
                                                 with them, demoing product, and providing in-     the coming year, as we have seen just the tip of
                         owner and
                                                 formation about our store. The hope, of course,   the iceberg when it comes to the potential of
                                                 is to convert these postal customers into toy     online platforms. Customers enjoy shopping
                         PlaSmart, Inc.
                                                 customers. And with free gift wrapping and in-    online; it allows them to compare prices easily,
                                                 store shipping, we make it about as convenient    find their desired item quickly, and have their
                                                 as it gets to take care of gift shopping, espe-   purchases shipped right to their door.
                                                 cially for those from out of the area.                 However, the novelty of toy stores re-

SPECIALTY TOYS & GIFTS                                             S6                                                           MAY/JUNE 2012
 mains; they are places where children, parents,      a bit more to get a high-quality, high-perfor-        Nathanson
 and grandparents want to go to discover and          mance yo-yo at a fair price. They realize that a            CEO,
 enjoy toys. Online retailers offer convenience,      $3 yo-yo is not a good deal at any price if you     Bananagrams,
 but visiting a toy store is a fun thing to do, and   are looking for a good play experience or to                 Inc.
 offers a unique experience that is difficult to      increase your skills. If anything, the party
 recreate online. Retailers should not be daunted     favor and low-priced yo-yos out there only
 by the emergence of online shops; rather, they       perpetuate an old stereotype of the category.
 should exploit the trends exposed by the online      When a retailer says “my customers won’t pay
 world, and use them to harness the qualities         $10 for a yo-yo” and then only sells $3 pieces,
 and benefits that make them unique.                  they are limiting that customer, the category,
                                                      and their own sales potential.
 Nathanson: I think a big trend this year will                                                                   David
 be toys and games that offer a variety of ways       Quercia: End consumers are going back to the
 to play, as well as different levels of play, al-    basics of wooden toys to help educate and de-
 lowing children to grow along with products.         velop their children’s minds at an affordable
 This is paramount to us and is reflected in all      price. This is a trend that Hape is definitely
                                                                                                          Hape Int’l, Inc.
 our current and upcoming games. We also ex-          benefitting from because we provide all of it
 pect and hope to see more of the “less is more”      in every aspect.
 philosophy that we practice when it comes to              To stay competitive in the industry, you
 packaging.                                           have to be able to also provide something
                                                      unique that sets your company apart. Hape’s
 Rywolt: Building distribution: we are attract-       product and development team is based in Eu-
 ing new customers in a broad range of retail         rope, America, and Asia. The combination
 categories, mostly stores looking to meet the        gives us an edge by providing quality toys
 impulse needs of new or casual players. Even         with different perspectives.                        Todd Rywolt
 better still, our existing customers are getting                                                            president,
 on board with our new “Yo to Pro” program,           Towles: Stiffer competition from Internet flash     Yomega Corp.
 carrying a deeper selection of Yomega items          sites and big box stores. Devaluing of some core
 to meet the needs of the people coming to their      brands due to price slashing via Amazon.
 stores. They are finding they can sell three or      Growth of importance of “buy local” campaigns.
 four models to the same customer if they have
 yo-yos for increasing skill levels on hand.          Girson: The Internet, the fact that it’s an elec-
       “Hot Pockets”: There are specific com-         tion year, and the economy.
 munities around the U.S. that are jump-starting
 interest in active play and skill toys. Whole        Holliday: I believe that old-fashioned, knowl-
 towns are nurturing fun alternatives to seden-       edgeable service is something that more and
 tary play. Suburbs around Atlanta, New               more people are looking for. The Internet will          Claudia
 York/New Jersey, Michigan, and northern Cal-         never go away, but there is a lot of rumbling
 ifornia seem to have embraced yo-yos and             about shopping local, supporting your neigh-
 skill toys; it’s really been fun to watch.           borhood businesses, shopping small, and so
                                                                                                            aMuse Toys
       Quality, not quantity: It sounds cliché, but   on. Of course, we promote all of those things          Baltimore, Md.
 we’re seeing that even in tougher economic           too, as they are what we are all about. Big
 times, people want good value over just              businesses, whether the big box or the big In-
 “cheap.” They are more than willing to spend         ternet company, may get a lot of the news and

MAY/JUNE 2012                                                                  S7                                             SPECIALTY TOYS & GIFTS
Chatting with the Industry
  such, but at the end of the day, it’s the small      We have in-store events and participate in or       case products to a wide, but targeted, audience of
  businesses that really contribute to the bottom      sponsor many school activities and events. We       toy retailers. Trade shows are used as an oppor-
  line of the communities they serve. Our busi-        have been a sponsor of our local PBS TV station     tunity to present new items, receive instant feed-
  ness has been fortunate enough to have survived      for more than 10 years—advice I received from       back, and be able to present each item hands-on.
  a lot of different economic climates, as we have     a fellow ASTRA retailer many years ago. We do-      It is always invigorating to see positive reactions
  been around since 1964. God willing, we will         nate toys and gift certificates to numerous local   to both new releases and to our classic products.
  continue to change where we have to, but still       organizations whose main purpose is to improve      It has been our experience that email newsletters
  provide the type of service that we are known        the lives and development of children.              are also very effective marketing tools used to up-
  for, and be a part of our community for many                                                             date our entire customer base of new arrivals,
  years to come.                                                                                           specials, and other product-related news.

                                                                                                           Nathanson: We have been very fortunate that
                                                                                                           word of mouth has been, and continues to be, a
  What are you doing to drive consumers to your

                                                                                                           very successful channel for us. One person plays
  store, not only during the holidays, but

  Holliday: In addition to the free play days that                                                         one of our games with four or five others, and
  throughout the year?

  we do every other week, and our in-store post                                                            they all want the game after playing it. Addi-
  office, we are involved in a number of things that                                                       tionally, Twitter, Facebook, Pinterest, and other
  give us visibility in the community. We have em-                                                         social media tools are a great way for us to en-
  ployees who are involved with Boy Scouts,                                                                gage with our customers and for our fans to en-
  which gives us good publicity. We have adopted                                                           gage with one another. We want to hear what
  a local park, which the employees keep clean.                                                            our audience thinks so we can factor that into
  We work with a local Christian radio station,                                                            our new products, as well as to improve upon
  where we answer phones during their pledge                                                               our existing ones. And quite frankly, nothing
  drive. We also work with Goodwill, where we              aMuse Toys
                                                                                                           makes us happier than to see all the photos of
  set up display tables at their events, and I am an                                                       creative and witty Bananagrams crosswords that
  ambassador for them, which is good for them          Towles: In-store events. We host local authors,     people send our way.
  and us. With Easter Seals, we sponsored the De-      such as Puck (123 Baltimore) and Ellen Lupton
  signSense international design competition for       (D.I.Y Kids). We partner with key vendors           Quercia: Hape launched an aggressive market-
  the design of a toy or aid for those with sensory    (Haba, Tegu, Blue Orange Games) to create spe-      ing campaign for 2012 to re-brand and market
  disabilities. This event was new this year, and we   cial events: family game nights (Game Univer-       our products. The market has taken notice, and
  all agreed that it was so good, and has such good    sity), Tegu Mobility Truck (Tegu Block Party).      we have received phenomenal feedback and are
  potential, that it is now going to be an annual      We also work with local non-profits (Casey          benefiting from the increase in sales.
  event. In addition to these things, we publish an    Cares, Baltimore Child Abuse Center, Water-              The trade shows have also been helpful.
  information-based newsletter via email, and we       front Partnerships) in furthering community         They’re a great tool to gauge how the economy
  do a lot of things on our Facebook page. Both of     awareness of their mission by hosting fundrais-     is doing based on the attendees and the orders
  these are used to keep engaged with customers        ing events, which we heavily promote through        we receive. Hape will have attended more than
  when they are not in the store.                      social media outlets (Facebook, Twitter, blog-      50 shows by the end of the year.
                                                       gers, etc.) and to the press.                            It all comes down to the parents who buy
  Girson: We’ve been a member of The Good Toy                                                              the toys, the kids who want to play with them,
  Group since its inception. We send out four cat-                                                         and whether they are all talking highly of the
  alogs a year to an ever-growing mailing list. We                                                         product. That’s why Hape is very involved with
                                                       What marketing channels are most successful

  also try to send out about two emails a month        Kimber: We have found trade shows to be very        mom bloggers and toy testing with kinder-
                                                       to you? How do you use them?

  and use Facebook and Twitter as often as we can.     successful marketing tools, allowing us to show-    gartens. Word of mouth is still very effective.

SPECIALTY TOYS & GIFTS                                                       S8                                                            MAY/JUNE 2012
Chatting with the Industry
 Rywolt: The most effective marketing element          some of our products, our play days, and other      but also serves to put us in front of our key de-
 for us is the in-store experience. Yo-yos and skill   things that are interesting and let our customers   mographic: intelligent, thoughtful, and loyal
 toys are a highly demonstrable category, and          get to know us better. Beyond that, we spend a      consumers.
 stores with a good yo-yo or kendama player on         lot of time making sure that we have all of our
 staff will drive much stronger sales. Demon-          events publicized the best way that we can. This
 stration videos can help capture this, though not     is one of the main reasons we do these events.
                                                                                                           What is your distribution strategy when it

 as well as hands-on experience. We created Yo         We get them listed on several Internet event cal-   Quercia: Hape is committed to the specialty
                                                                                                           comes to specialty?

 to Pro countertop display units that explain the      endars, in a couple of local event publications,    market because it is where the end consumers
 various levels of yo-yo as simply as possible,        and some additional places. This has helped         have one-on-one interactions with the retailers.
 showing where each of our yo-yos fits on that         spread our reputation and bring in new              The stores usually have a strong community
 scale. We also created simple icons for our pack-     prospects.                                          presence and exceptional service, and cater to
 aging to explain the features and benefits. This                                                          their customers.
 should take a lot of guesswork out of yo-yos for                                                               Hape has different product lines to fit a
 retailers and consumers, who in the past found                                                            large variety of markets, from the small bou-
 the category to be over complicated.                                                                      tique stores, to the craft and educational stores,
       Social media is helping us create a relation-                                                       as well as zoos, museums, and aquariums. We
 ship with our fans and new players. We share in-                                                          are behind our product 100 percent, and our cus-
 formation almost daily on Facebook, Twitter,                                                              tomers, the retailers, know that. I personally
 and our new company website. This allows us to                                                            conduct sales training with the Hape sales team,
 get almost instantaneous feedback from our most                                                           as well as with the sales reps, to convey the mes-
 passionate customers. It also gives us a forum to                                                         sage of Hape’s products.
 reach players in emerging markets in Europe,
 Asia, and South America, which have been more                                                             Kimber: We strive to provide product differen-
 challenging to reach in the past.                                                                         tiation by offering items to the specialty market
       Trade publications and subscriber email                                                             initially and exclusively for a limited time. We
 blasts have been good tools for us to communi-                                                            appreciate the unique experience that speciality
 cate our new products, packaging, and sales pro-                                                          retailers offer customers, and we want to en-
 grams directly to specialty retailers. They                                                               courage this by offering them unique product
 provide an opportunity to share new messages                                                              and first-to-market items.
 and reinforce our branding.
                                                                                                           Nathanson: We have always had incredible
                                                                                                           support from the independents and mom and
                                                       Towles: aMuse has a significant social media        pop stores. We wouldn’t be where we are today
 What types of consumer outreach garner the

                                                       presence. Our blog (          without their loyalty and belief in our products.
 strongest response for your store? Are you uti-

                                                       reaches customers from around the world, as         So our strategy, if you could call it that, is to
 lizing online options in addition to traditional

 Holliday: We do not really do traditional news-       well as around the corner. We use that space to     treat everyone like family; assume the best and
 newspaper ads/flyers?

 paper ads or flyers. We focus our attention on        offer our expertise and provide readers—both        you get the best.
 our email list for our informational newsletter.      current and potential customers—an insight to
 This provides parenting tips, fun facts, and other    our mission of deliverying beautiful, purposeful    Rywolt: We manage larger specialty customers
 things that we get good feedback from. We also        play while showcasing many of our retail and        in-house, and work closely with a wide network
 focus our attention on our Facebook page,             community partners. Underwriting on our local       of sales reps for the balance. Good reps offer spe-
 which we use to engage our customers and              public radio station (WYPR) is something we         cific expertise and relationships that our small in-
 prospects in fun ways with information about          not only enjoy doing (supporting public radio),     ternal team can’t replicate. We maintain an active

SPECIALTY TOYS & GIFTS                                                      S10                                                             MAY/JUNE 2012
Chatting with the Industry
  relationship with our reps, taking their advice on   consumers are demanding. We know that people
  what is working and what needs to change. We         are now factoring in the environment when it
                                                                                                           do differently to cater to you and your cus-

  also try to join them for meetings with buyers       comes to their standard of living and even when     Holliday: Toy manufacturers can help us in sev-
                                                                                                           tomers’ needs?

  when possible, because ultimately we have the        it comes to buying toys for their children or       eral ways, some of which we are seeing more ac-
  deepest knowledge and passion for the product. It    loved ones.                                         tivity on recently, which is nice. Specifically,
  makes for the strongest possible presentations.           Consumers, especially first-time parents,      having and enforcing a MAP (minimum adver-
                                                       are now more educated about the quality and the     tised pricing) policy, free demos, low minimum
                                                       safety standards of toys. So Hape wants to make     orders (especially to try new product), shipping
                                                       sure that the toys are safely produced as well as   on time (not being backordered for extended pe-
  Are you utilizing online retailing to grow your

                                                       safe for the environment. All of our products are   riods), and free or reduced cost items to support
  business? Are you selling products direct to

                                                       produced with water-based paint and we have         play days, as this is a great way to get manufac-
  consumers, or through an affiliate, such as

  Towles: We have an e-commerce website. At            several collections that are produced with FSC      turers’ products in front of customers.

  the moment it represents a small percentage of       wood. We are aiming in the very near future to
  yearly sales. We are currently in the middle of      have all of our toys 100-percent environmen-        Towles: Back to basics. Foster a healthy re-
  changing our site to be completely integrated        tally friendly.                                     tailer-manufacturer relationship that empowers
  with the point of sale system                                                                                            stores to further their brands’
  used in our store fronts (Mer-                                                                                           market penetration. Provide re-
  chantOS), allowing us to man-                                                                                            tailers with well-written and
  age site inventory more                                                                                                  professional-looking marketing
  effectively and have an online                                                                                           materials to share with staff and
  presence that better represents                                                                                          consumers. Help retailers be-
  our brand.                                                                                                               come true brand ambassadors.
                                                                                                                           Be more transparent about dis-
  Holliday: We do not actively                                                                                             tribution plans. Are they spe-
  sell any toys on our website.                                                                                            cialty only? Will they be
  Our site is used for informa-                                                                                            dropping inventory on flash
  tional purposes only. The only                                                                                           sites or big box stores at any
  online sales we have are from          Children’s World                                                                  point during the coming year?
  our participation with the                                                                                               Do they have MAP policies?
  Shopatron network, and from customers who Girson: From time to time we see various                       Will they enforce them? With more information,
  may or may not have went to our site, but call us “buzz-words” or “hot topics” coming up in our          we can make more informed choices about what
  to have us pick out a gift and either ship, or have industry. Though our customers are more aware        we choose to carry.
  ready for them to pick up. Just yesterday, we had of environmentally friendly toys, I believe that
  a person call in, and we took care of three birth- for the most part this is only one factor in their
  day gifts that our staff picked, all over the process of choosing which toys to buy. A couple
                                                                                                           Are you seeing an increase in technology-dri-

  phone. The customer came in today, picked up of years ago, “green” was very in. Now it’s just
                                                                                                           ven toys in your store? Do you feel that tablets

  their gifts, and was on their way.                   another available category, as is “Made in
                                                                                                           and app-based products will have a greater im-

                                                       America.” Though many would like to buy             Girson: Yes, I do see an increase in technology-
                                                                                                           portance for holiday 2012?

  Is there a greater demand from your customers green toys, or those made in the U.S., pricing is          driven toys, but have to say, I still think, in the
  for environmentally friendly toys? Are they be- usually more of an overriding factor in the de-          big scheme of things, toys are far more valuable
                                                       cision-making process.                              when kids are using their own imagination and
  Quercia: Hape not only agrees that it’s better to                                                        creativity rather than having the electronics do
  coming a bigger part of your product mix?

  “go green,” but we want to provide what the end What would you like to see toy manufacturers             all the thinking for them. That’s not to say we

SPECIALTY TOYS & GIFTS                                                     S12                                                             MAY/JUNE 2012
 have our heads in the sand and refuse to em-          selling in their stores, or witnessing which        read the immediate reactions of their fans.
 brace technology. I am selective, and will only       trendy toys the kids are playing with these days,
 bring in product that falls within my general se-     it’s all useful knowledge that helps me keep up     Nathanson: It’s a combination of reading trade
 lection criteria of quality, usefulness, longevity,   with the industry.                                  resources, listening at all the toy/game and trade
 and value. We are waiting for some tablet app-              It also helps that Hape is a member of sev-   fairs, and talking with our customers, both re-
 based games to come in. Though I expect to sell       eral toy associations, so I take advantage of the   tail and consumers.
 a fair amount, I do not see technology-driven         benefits that come along with having those
 products being a major percentage of what we          memberships; read all the newsletters and mag-      Kimber: In order to keep tuned into the pulse of
 sell in the foreseeable future.                       azines, attend networking events, and most of       the consumer base and the industry itself, we
                                                       all, keep in touch with other members.              rely on websites and newsletters for informa-
                                                                                                           tion. We are always networking within the in-
                                                       Rywolt: We read publications like The Toy           dustry, with industry events and trade shows
 How do you keep abreast of the latest trends

 Quercia: Being in this competitive industry,          Book and the ASTRA newsletter regularly, and        becoming the cornerstones of many productive
 in the toy industry?

 you have no choice but to stay on top of your         get our up-to-the-minute news fix from online       relationships. These elements are all tied to-
 game. Whether it’s information that I receive         sources. Another great resource are the toy fan     gether by memberships in industry associations.
 from renowned designers and inventors, to the         pages on Facebook, where companies share            We rely on ASTRA, NSSEA, and TIA to keep
 feedback from my customers of what items are          their latest introductions and you get to see and   us in the loop.                               G

MAY/JUNE 2012                                                               S13                                                  SPECIALTY TOYS & GIFTS

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