Dispatches from the retail front line (July)

The past month has seen a debate about having the opportunity to get margins up. As this is dodgy ground I don?t bring it up, but salesmen do when trying to sell high margin, no volume ranges.
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Everyone seems to think this involves putting prices up, but aren’t we retailers too late?

Haven’t manufacturers already had to increase prices? The Pound against both Dollar and Euro made sure of that, and I cant help but feel that the prices have already risen as far as they can this year.

Ideally getting better margins by selling a Deluxe Transformer at £12.99 instead of £9.99 would be great. But, too late – it’s a done deal.

Getting an extra 50p on Pokemon cards would be great…too late.

Playmobil… too late. Daft thing is the one company who could have put prices up at the start of the year didn’t and are now increasing prices in some cases at alarming levels.

We have undersold for years, when I go to Europe my kids will no longer walk near me in a toy shop, and what must the locals think of some foreign bloke, muttering to himself in a funny language while shaking his head. I was so amazed by the price of one item I can confirm that “bloody hell” means the same in several tongues.

As long as manufactures publish retail guide prices then the margin will never increase because retail wants it to. Please don’t give me any bullshit about the retail is only a guide and it is illegal to recommend retail prices. Well, leave retail prices blank then.

The fact remains that some manufacturers have a price in their minds that they can sell it for (some say what they can get away with) and set the trade price accordingly.

The problem is we have sold too cheap too long. But we can’t just blame ourselves. Public perception isn’t just price against other toys but other consumer goods. I wrote last month about the incredible value of iPod apps and games, then you have great little toys that are given away with a £2 meal at McDonalds.

These meals include burger, chips, drink and a toy that quite frankly put some of the toys we sell to shame. I have often wondered about marketing people who get so enthusiastic about tying up a brand with Mcdonalds when their own product is overpriced crap.

So can we get margins up for retailer and suppliers? Well I don’t think we can stand any more price increases this year, but we can start by not having the daft promotions, instead of giving things away we can increase margins by actually selling an item.

At the end of the day, as brave a statement as it is to get prices/margins up, the reality is no one can tell anyone to put prices up. It is illegal and hasn’t a chance of happening as long as the industry supplies supermarkets and non-specialist outlets.

However, there are ways to support retailers who support suppliers across ranges. Those who back suppliers 365 days of the year and who help get a product off the ground. Any sales director worth his salt/salary will know how to do it. I believe positive discrimination was the phrase used.


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