The UK High Street has changed massively in the space of a few months.
In December, electrical retailer Comet closed its last store, and January brought about the demise of Jessops, HMV and Blockbuster, with all three entering administration, followed by various store closures and assets being sold off. Clothing chain Republic entered administration in February.
So what lessons can toy retail learn from this? We put the question to our Retail Advisory Board.
“What retailers and everyone needs to learn is you can’t rest on your lau- rels, you have to keep reinventing yourself,” says The Entertainer’s buying director Stuart Grant.
“If HMV had owned the download market early on, iTunes would’ve struggled to take off in the UK. The Entertainer wouldn’t be as successful as it is now if we didn’t offer something different to other retailers or the internet. We worked hard on our customer service, product knowledge, ranges, events, competitions and more.”
Argos believes reacting to challenges, like the increase in internet sales, will put toy retail in good stead for the future.
“The impact of the internet is a deep and long- term issue for retailers, which has fundamentally changed the way we interact and transact with brands,” comments Argos trading director for toys, jewellery and freetime, Marc Spence.
“An ongoing challenge for retailers is going to be keeping pace with the changes in technology and consumer demand and ensuring they remain relevant in an increasingly commoditised marketplace.”
ONLINE TOY STORY
While having some kind of online strategy is imperative for retailers, it’s obviously important for bricks and mortar chains to keep physical sales strong. But where do we draw the line? If you focus on internet sales, what’s to stop High Street sales from dropping? How do you get the balance right? Grant believes two-hour home internet deliveries could become the norm in years to come, but says some consumers will always want to pick up a toy before buying it, and seek advice from in-store experts.
Ian Edmunds, Toymaster’s operations director, agrees.
“One of the big things you want as a parent is advice, which you can get from toy shops,” he says. “It’s all about offering a point of difference and adding value, rather than just ordering it off Amazon. That’s what killed Jessops and HMV – if you want a Spider-Man DVD you go on Amazon. If you want a toy, the internet is not the first place you want to use, with the greatest respect.
“You need flexibility. Indie retailers shouldn’t sign up into 25-year leases. But there is still an opportunity for independents, especially in market towns.”
So, toy retail is safer than other sectors, right? As Modelzone’s chief executive Martin Carr states in our interview on page 41, you can download a film, book, song or game, but you can’t download a toy. However, he says that in today’s volatile market, “nobody can relax”.
“The fact that HMV’s underlying proposition has eroded through downloading has obviously caused them particular problems,” he comments. “But that doesn’t mean to say any retailer can relax in today’s market. It’s a very tough and fast changing market.”
Grant adds: “I think certain parts of toy retail will be reasonably cushioned from
technology, but I don’t think we’re going to find that colouring pads or LEGO are going to be replaced by apps.”
THE FUTURE OF RETAIL
If we had a crystal ball here at ToyNews, we’d happily gaze into it to help you prepare for the future. Alas, we don’t, so we’ll have to make do with what we’ve learned – internet sales are rising, kids’ virtual worlds are becoming more popular, as are app games and properties. There’s strong demand for low-end pocket money lines and high-end tablet toys.
Grant wonders how many High Streets will survive.
“Do you really need thousands of stores in the world we live in today? I don’t think we do,” he adds.
“But if you’re retailing smart, it’s perfectly possible to thrive.”
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