“Risk, the game of conquest. Plan for victory and use tactical thinking to conquer territories and continents in your campaign to take over the world.”
Does this all sound familiar? Perhaps not just because it is taken from Hasbro’s classic game, Risk, but because it reflects the daily challenge of our toy business. Why would any of us want to play in this arena? Why would any sensible, entrepreneur or investor want to play in this field of battle?
Someone once said to me: “The toy business really doesn’t have much going for it ... it’s highly seasonal, involves long lead times, is dependant on a volatile currency, addresses a highly fickle target audience and involves a completely fresh start every January.”
But most of us in this industry love the challenge, love the unpredictability, and the fact that however long you have been in this industry, whatever you have achieved, you can never be sure if you are backing a winner or a loser.
I thought Risk would be an appropriate place to start as over the next six months I seek to highlight some possible winning ways for survival within our industry.
This is the first of a series of monthly articles designed to guide and provoke. The heart of what we do is all about taking risks – using our best endeavours to plan for victory, using our tactical skills to conquer geographies, retail shelves and the purchasing power of our consumers.
For many years the assumption in our industry has been that the biggest risk we face is ‘kids getting older younger’ (KGOY).
Perhaps it is time to get off this broken record as our industry has been remarkably resilient to this so called show-stopper.
I would suggest the biggest risks we face are as follows.
We fail as an industry to innovate enough and tap into genuine consumer insights that fuel break-through product.
We so squeeze the value chain and our proposition (thus all losing profitability and margin that could be invested back to generate a virtuous circle for the development and expansion of the toy industry) through the excessive discounting of our products, knocking one another off to undermine the premium brands, or failing to bring vitality to the point of sale, and therefore not exciting or engaging our browsing consumer.
We fail to adapt our business model and ways of working – assuming for too long that the old rules still apply.
Clearly this short article can’t address in detail these fundamental industry risks.
However, each month I will take a lead from Stephen Covey’s bestselling book – Seven Habits of Highly Effective People – and provide ToyNews readers with Seven Winning Ways to Up Your Game in the Toy Business.
I put these out there as some thought provoking principles, not because they are break-through, but because I am a firm believer that doing ‘the basics brilliantly’ is the way to win.
Here are seven winning ways to up your game in the toy business.
Form stronger, more fundamental partnerships between manufacturers, media partners and retailers earlier on in the product development and selling process.
Rather than simply selling finished product, we need to get to the point where we are partnering to activate a shared understanding of what consumers are looking for, and what distinguishes their mindset from one store to another.
We need to be able to ‘walk and chew gum’. By that I mean on the one hand we need to make things happen, be bold and go for it. But we also need to be prudent and circumspect.
We have to be as good at managing the downside as managing the upside. It is a fact that more people go bust in our industry by being over-committed with excess rather than under-committed with shortage.
Recognise that today’s retail landscape has many more angles and dimensions. To win we must be able to offer different strokes for different folks and have a better understanding of the specific peculiarities, shopper habits and demands of specific channels, rather than simply offering ‘one-size fits all’ – that road only leads to price competition.
Manufacturers, media partners and retailers need to partner together to create new looks, new categories, new formats and new leaps of innovation to capture today’s kids.
If we are honest, it is hard to remember enough genuine leaps forward that the industry has taken (together), rather than simply offering last year’s product line dressed up with a new incremental twist. No wonder our consumers are not stepping up, we are simply boring them to death.
Ask yourself these questions: Have I taken every step possible to understand the financial implications of success and failure, and have I got a plan for both? Have I maximised what I have got, or am I simply chasing after the ‘new’ for new’s sake?
And/or am I flogging a dead horse and do I, therefore, need to move on, get rid of the inventory I have and re-group?
Toys are not like wine, they do not become more valuable by leaving them in the warehouse for longer.
Ask yourself the question: Have I understood what consumer insight or benefit this new offering is really addressing? And if you can’t answer this question, you don’t have a proposition.
In next month’s Seven Winning Ways column, Gardner will be looking at Monopoly, making the right deals and owning the right properties.