INDUSTRY ROUND TABLE: The fourth quarter - ToyNews

INDUSTRY ROUND TABLE: The fourth quarter

As we enter the all-important fourth quarter, we chatted to execs from key UK toy suppliers to find out how 2011 has been so far, hopes for the future, the retail landscape, emerging trends, marketing campaigns and lots more
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Those offering opinions were Mary Price, Mega Brands UK and international commercial and marketing director; Erica Zubriski, senior marketing director, Mattel UK; Emma Weber, marketing and licensing director, Vivid; Joanne Gray, head of European marketing, Tomy; Graham Canning, sales director, VTech UK and Anthony Temple, MD, Rainbow Designs.

How has 2011 been for your company and the industry so far?

Joanne Gray: There is no denying it is tough out there, but we were fortunate to benefit from strong Harry Potter sales this summer, to coincide with the final movie back in July and the good news is that the key lines are continuing to sell well.

Emma Weber: 2011 has been a fantastic year for Vivid Imaginations, we have seen continued growth and July NPD shows Vivid climbing the chart and ranked as the number four toy firm.

Erica Zubriski: We have seen 2011 get off to a good start. We have a strong portfolio of brands as well as some great licences. The industry as a whole is having some challenges in this economic environment. The increase of VAT and inflation has added pressure. During these times, the consumer continues to look for tried and tested brands.

Anthony Temple
: This has been a tough year for everyone in the toy industry, but we do appear to be ahead of the trend.

In the lead up to Christmas, how confident are you about sales? What are your expectations for Q4?

Temple: We expect trading conditions to continue to be difficult, however we are confident that we will meet our Q4 targets.

Graham Canning
: VTech has a big TV campaign in Q4, the most we have ever run in the UK. InnoTab, the new learning app tablet for children, is just hitting the shelves and first sale reads are excellent. So we are confident of another good Christmas.

Gray: We’re hopeful of a strong Q4, we just hope we don’t get that early snow again this year, as that really did cause chaos, impacting both footfall in stores and retailer’s ability to get product from distribution centres onto shelves.

Assuming the weather is good to us, we believe we have the potential for some great sales.

Early reads already indicate that GX Buggy is going to be a hot toy for boys this year and for girls, Pinypon and Teacup Piggies have the potential to be at the top of the Christmas list.

How has the retail landscape changed over the past few years?

Zubriski: It’s always an evolving landscape. As technology comes more common place the way the consumer shops changes. We continue to use our consumer insights and all the research that we do around consumer behaviour, to help us develop our retail strategies. Working with all our retail partners, we make sure we leverage this knowledge to have the right mix of product for their consumer.

Mary Price: I hold Woolworths in a special place in my heart as I was the buying manager for toys for a number of years. Putting nostalgia to one side, the toy industry as a whole has continued to grow sales year on year. The ex Woolworths business has not gone to one retailer in particular, moreover, everyone has grown, be they toy specialists, mixed retailers, grocers, independents, online, etc.

Gray: The ability of Woolworths to shift large volumes of toys was unquestionable, but as with everything, changes lead to new opportunities and as such the retail landscape has been transformed. The indies are certainly benefitting, with High Street consumers returning to their local toy stores which is great and we are seeing some really strong growth within this sector.

The grocers have picked up a lot of business and are continuing to grow their share of toys, but they are limited SKU operators, so it is about focusing on the big volume drivers and sought after products. The online retailers on the other hand have the ability to stock much vaster ranges which has proved beneficial.


Are you using social media as part of your marketing? Do you think it’s a useful tool or a passing fad?

Zubriski: Social media is becoming an important part of the marketing mix. It can be a powerful tool when used appropriately to engage consumers and help drive awareness.

Temple: It is certainly not a passing fad, but still a niche part of the marketing mix. It is one that we and other innovative companies are in the process of developing.

Price: Social media has proved to be a very useful part of our communications programme. Not only has it provided a platform for us to talk directly to mums and dads, show new products and raise awareness of our brand, but we have also been able to get crucial insight and feedback too.


What are the key trends emerging?

Weber: Moshi Monsters. It is so refreshing to see an online world capture the hearts and minds of such a broad spectrum of children.

Price: Construction toys continue to do very well. Mini figures continue to sell in their droves and new properties such as Moshi Monsters are hot.

Canning: Electronic learning is +14 per cent (July YTD, NPD). Bath toys, where we have brought electronic innovation is +19 per cent (July YTD, NPD) and pre-school electronic learning is +24 per cent (July YTD, NPD).


How has the new toy safety directive affected your business?

Gray: There have been some significant changes that the toy safety directive has put in place, which has and will affect our business going forward; but thankfully at Tomy, our product integrity team are so ahead of the game and have been putting the appropriate measures in place for some time to ensure we comply to all the new regulations, which means it has not been a last minute panic.

Temple: It has significantly increased the cost of product development and introduction. There is also a further layer of an administrative burden.

Where do you see the majority of growth coming from going forward?

Canning: Our strategy is to grow in new categories. We plan to expand into vehicles, arts and crafts and outdoor toys over the coming years.

Price: We are targeting big growth for our European market however the UK is the largest slice of the pie, so we have aggressive growth plans for our domestic business.

Weber: Vivid’s growth will certainly continue in the UK as well as a key strategic focus internationally, having successfully set up our offices in France and Germany and we continue to work on new international ventures.

Gray: We have high growth expectations over the coming years, which we anticipate will be driven by sales growth across the globe.

Temple: We see our growth coming from both international and UK-based markets.

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