1. Continue To Innovate
In tough times, it’s hard to deliver innovative new products due to all the negative forces, but the continuing innovation from toy companies has been a very large part of the relatively stable global toy market size, despite the most severe financial situation of recent years.
Innovate. An obvious example of this would be Hasbro – after seeing the GI Joe movie postponed to 2013, Hasbro could have battened down the hatches and prepared for a regressive 2012, but instead they announced the relaunch of old favourite Furby, a launch which has gone a long way to addressing the sales gap from GI Joe beiing postponed.
2. It’s all about brands and licences
The reality is that any company without strong own brands, a licensed portfolio or both will struggle in this industry. That is a perpetual factor in success, but it’s even more important in tough times, as retailers will not take risks, and prefer to trust on known quantities and brands with presence. Longer term, building your own strong hero brands is THE only way to ensure long term stability and success in this industry.
3. Prudent inventory management
This is a perennial factor, but this too becomes even more critical in these times. Having cash tied up in slow moving/obsolete stock will kill cashflow, which can and does kill companies. Caution must prevail, and ruthless clearance must be applied to avoid year end stock holding sitting on the books until the following Q4.
4. Hold onto your key staff, especially performing sales staff
Most companies will be operating with lower head count than a few years ago at this point of the economic cycle. The key to success will continue to be holding onto the staff who deliver. Those staff who have strong retail relationships and the continuing ability to influence retail buyers are worth 10 staff in any other department. Sorry to all those hard working folks in Finance, Logistics and whatever else, but unless Sales are coming in through the front door, none of those people have job security. Penny pinching on bonus formulae and Sales pay levels can be self-defeating. For sure, if people aren’t delivering, hold a tight ship, but regardless of the size of your staff, structure or anything else, do what it takes to keep staff who deliver sales!
5. Smarter marketing spends
Outside of known brands/licences, what retail loves are TV advertised products, but for success, we need to focus on marketing that both secures listings, AND returns on investment.
Social media is the buzzword, but in the end success in marketing for 2013 will be at least partly driven on an effective combination of TV and grass roots word of mouth building, driven by great product experience and responsive, aproachable marketing support.
Steve Reece is a brand and product marketing consultant, working in the toy and games industries. Visit Steve Reece's website here.
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