I arrived at Wow Stuff thinking that the focus of the interview with MD, Richard North would be the company’s international expansion.
On leaving the offices in Wolverhampton Science Park, it was clear that international sales were just one part of a much larger business plan that MD, Richard North and his partners hope will make Wow Stuff into a $250 million company in the US in three years.
The firm has big plans for product innovation, promotion, expansion and more, which, coupled with the determination and ‘will-do’ attitude of the team at Wow Stuff, could just make its ambitions into reality.
The dancing robot, My Keepon and the R/C inflatable clown fish and shark, Air Swimmers, will lead Wow Stuff’s assault on the American market, which has been planned for quite some time and seems to be growing rapidly.
“A year ago, one per cent of our business was international. Last year, we doubled that to two per cent. This year we are at 50 per cent,” explains North.
“We took the decision that we would initially launch internationally in 2008, but because of the recession, we decided to pull back for a while. Then in February we said, right now is the time and we planned it go live in Nuremberg.”
During the visit to Nuremberg, Wow Stuff collected over 1,000 business cards. “So on the one hand, it was vindication again that our products are great, but it was also that they aren’t just great for UK consumers, they’re great for consumers, wherever they may be,” he continues.
Resources are still limited in such a young company, which steered a decision to target just ten people from the list. North explains: “As much as we have always been profitable, we’ve always reinvested profit. So even at this period of growth, we’re at the point where we’re having to be quite selective about who we sell to, just because of financing it.
“We’ve got an infrastructure behind the scenes that is still relatively in its infancy. We do deal with the big UK retailers, but we are now working with the big international retailers too and that will put a lot of stress on resources.”
Despite only targeting one per cent of interested parties, Wow Stuff certainly isn’t aiming small. North predicts: “In 2012, the international business will be at 75 per cent. Our UK business will also have grown next year. The mass growth we’ve got as we look to increase by 50 per cent again, is a really great position to be in. It’s just how we deliver it, it’s how we make sure that the back office can cope with delivery.”
To do this, the company is looking at expanding its Hong Kong office and will source more factories as it gears up for 2012.
My Keepon and Air Swimmers will be exclusive to Toys R Us in the US at launch and the retailer recently said it’s expecting My Keepon to be a best-selling toy this Christmas.
Going forward, Wow Stuff is looking to keep close control of the business in international markets. North tells ToyNews: “I think ultimately we’ll have our own offices. Or if we are part of a larger organisation in a few years’ time, then we can work within their offices to get things into the marketplace, to make it cost effective.
“That will be the challenge at first – how we make it cost effective. At the moment, we’re dealing directly with retailers in the UK, America and Europe, but you’ve got to be on the ground sometimes. If we had offices in those areas, we’d be able to present directly from there.”
In terms of promotion, the company has hired a US-based PR firm to deal with the influx of press enquiries. The toys have been earmarked for some of the main TV shows, and samples are being sent out thick and fast.
The marketing model of in-store demonstrators – The Demonstration Academy – videos and web-cams used in the UK will also be deployed throughout other territories and so far, it’s working.
North says: “If somebody had asked us 12 months ago what kind of business we are, we’d have said we create wow factor toys and we bring them to life in-store and sell them to UK retailers. That would have been it. Now we say we create wow factor toys, we bring them to life in-store and we sell them around the world.”
Consequently, Wow Stuff has big sales forecasts. North outlines: “In less than three years, we’d like to be at a quarter of a billion dollars in sales. At retail, that would be $400 million. We’re fast approaching the $100 million threshold now and eventually maybe $500 million.”
Next is a plan to extend some of the products into ranges. North says: “We’ve had blockbuster hits, so how do you take that and make a brand out of it? How do you take Dave the Monkey, nearly 300,000 pieces, and make that into a range? Consumers like what it stands for, what it represents and they want to buy more. We’ve been working on it for 12 months and that comes out next year – all the extensions to the brands. Keepon, for example, will be a whole range of stuff.”
When packaging Dave, Wow Stuff started to wonder if there was scope for Davinia etc, so an umbrella name was set up and Wow Pets and Cheeky Pets were registered as trademarks.
The next big step for the company, and to help with further international expansion, will be to launch the Wow Stuff brand. North unveils: “We’re launching a Wow Stuff brand. So we are actually going to have our own brand. It’s called Wow Stuff. Trademark has been applied for in most countries along with the internet names.
“That launches next year and that’s when we will hopefully end up with the ‘wow’ reaction and we can say ‘yep, that’s right, that’s Wow Stuff.’ Whereas at the moment, they’ll see a product and a brand, they’ll say ‘wow’, but they don’t necessarily know it’s from us. Now
it will be synonymous.”
The new brand will also help with international sales. North explains: “It will go out first internationally, before it comes out in the UK. So it will go out in America, Italy, Spain, Germany, France, and a few other European countries.
“That will spearhead our move into Europe, because certain brands that we carry on the licensing side don’t resonate in Europe or in America. The products do and quite often people will say, I like your products, but I don’t get the brand.
“Wow as a name is so ubiquitous. Stuff symbolises the broad approach and categories we can go into, but there are common values. It’s a very focused brand. You’ll see when it comes out, it has values and they stay consistent. The product can be quite different, but the common factor is wow and the packaging will bring that together as the family identity with the POS and videos.”
So international expansion, huge increases in turnover and a new brand launch – it’s busy times at Wow towers, but that’s not it. North has yet another development up his sleeve.
“We’re launching a social media platform,” North tells ToyNews. “It’s a consumer platform, not a trade platform. It’s called wowtown.com. I think the closest site and the one everyone kept saying when they saw it is YouTube – it’s like the YouTube of the toy market.”
The new site will launch on October 1st, is aimed at kids and adults in the UK and America and will be promoted with a ‘five million leaflet blast’.
And North’s final revelation: “Something really big will come out of that [wowtown .com], that’s never been done in the industry.
“A new way to market will come out of it that’s really clever and really interesting.”
The plans, had we heard them at inception stage a year ago, may have seemed a little ambitious, but the fact is they’re happening. The genuine passion and enthusiasm of the team is likely to ensure that most, if not all, of their plans will be a success.
And what’s next? “In terms of growth and where we are going, I think we are on the bottom three rungs of the ladder. If the ladder was about 15 rungs, we’re only on three, so there’s loads to come.”
Watch this space.