Amid a constantly evolving retail landscape, how should toy manufacturers position themselves for success?
According to new research conducted by an American university in cooperation with the Toy Industry Association (TIA), toymakers need to significantly refine their retail strategies and customer focus in order to thrive in the global marketplace.
The toy retail landscape has evolved considerably in recent decades with the rise and fall of big box stores and the increase in e-commerce. To help toy companies grapple with these tectonic shifts and maintain competitive footing, the new body of research from Vanderbilt University’s Owen Graduate School of Management examines key trends in distribution and consumer behavior and their impact on toy sales.
Based on secondary research and interviews with industry stakeholders, the 18-page report found that most toy brands are best served by honing in on two to three distribution channels.
Typically only the largest toymakers can support a full breadth of channels, and while distribution strategies that are focused on a single channel are easier to execute, they carry significantly more risk.
When considering strategies to boost brand awareness, before getting bogged down by the dizzying array of digital marketing opportunities, companies should first consider how to appeal to the two primary types of online shoppers: the searcher and the browser. Any digital strategy should be both search- and browse-friendly to maximize a product’s potential audience.
The report includes a matrix of four major pathways to retail success, based on a company’s volume potential and product innovation style. Depending on where a firm falls within the matrix, the research contends that company operations will need to be upgraded and tightened in order to achieve the favorable cost and/or development structures necessary to their strategy.
Regardless of the type of company, the research team found that toymakers need to tailor their strategy not only to the needs and behaviors of customers served by each channel, but also to longer-term trends in technology.
Early planning will help companies respond quickly to emerging trends and find creative ways to leverage innovations to drive sales.
The full report, “Shifting Channels: Strategies for Growth in the Toy Industry,” is free for TIA members and US $125 for non-members; contact TIA’s Anne McConnell to purchase a copy.