With the economic downturn still affecting the High Street, ToyNews’ Inside Trader Steve Reece looks at when the UK toy market can expect a bigger upward curve…
It seems like aeons ago when Woolworths so dramatically disappeared from our High Streets.
This whole global downturn is really getting monotonous now. How much longer will things keep spiralling downwards before we can begin to ride the roller coaster of the world economy upwards again? Well, the somewhat depressing reality is that all indicators suggest we are still well and truly in the downward curve of the economic cycle.
Aside from Woolworths, we’ve lost many others from the High Street, and nearly many more. On top of that, we almost seem poised to somehow lose one or more of our Southern European brethren countries, as Spain and Greece experience the bloodiest of all economic bloody noses. At the time of writing, the Euro is still in place but heavily embattled. And as if that wasn’t all bad enough, there appears to be a softening in the economies of previously vibrant BRICS countries.
So before we all give up, let’s take stock of the situation. The reality is that things are tough, and tougher in some places than others, but our industry has far from imploded. In fact, some of the most innovative and risky product launches of the past decade or more have come during these difficult times.
Business goes on, and for those who can balance prudence and a defensive mind-set with calculated risk taking and market share pursuit, this dismal period of time may be the making of them.
The proven keys to longevity in our industry are efficient product selection and development, especially taking account of technological advancements, impactful but return-on-investment focused marketing, strong retail relationships and ongoing brand building. If we were to look at those companies doing best in these tough times, they all exhibit a firm grasp of these key pillars of success.
While there is a backdrop of doom and gloom, economically speaking, throughout this period we have been astride a consumer revolution in terms of how media is consumed, how products are marketed, how they are bought and factors that influence sales.
Retail had begun to change towards true mass market multi-channel before the economic crisis began, but that change has accelerated in the past few years. Those willing to embrace change and the opportunity it brings are winning. Those seemingly stuck in the mud and looking backwards will continue to do so.
For those who position themselves to come out of the clouds (whenever they break) in a healthy and lean state, the next up cycle promises to be one hell of a ride, with growth more easy to find. There are fewer established competitors left standing, and any increase in consumer demand from such a low level we currently have will act as a growth driver. Moreover, retailers themselves will be leaner (but hopefully not meaner), e-commerce offers will be significantly easier and there will be more cost-effective ways to drive traffic where marketing investment is available.
JFK was quoted as follows: “When written in Chinese, the word “crisis” is composed of two characters.
“One represents danger, and the other opportunity.”
It’s surely important not to lose sight of the opportunities that abound due to broader economic doom and gloom. Each and every toy company still standing today has advantages and opportunities ahead that previous generations wouldn’t have even dreamed of.
So while we focus on riding out the storm, let’s also prepare our sails for future adventures.