Domic Sacco talks to Bhav Patel of Toy Galaxy in Barnet, Harrow, Ealing, Witney and Cowley, James Colclough of Melton Toys in Melton Mowbray, Ian Edmunds the marketing and operations director of Toymaster and Nigel Kemp, Halesworth Toy Shop and Beckles Toy Shop, Suffolk.
How’s business been over the past year? Are you happy with your level of sales?
James: Christmas was good, it hit our expectations. The start to this year has been mixed, it’s been unpredictable from one week to the next. We can be vastly up year- on-year one week, then down the next, and there doesn’t seem to be a particular explanation for it.
Bhav: I agree. The year ended okay but it was a very, very late finish. What helped us immensely was the key focus on promotions like those through Toymaster. It became very price sensitive. The beginning of this year was tough but it picked up around Easter when the weather got better.
Nigel: Price points are very relevant at the moment. Anything under £15 or £10 is very up and down.
We’ve heard £20 is becoming the ‘magic’ price point. Would you agree?
James: Yes. We find that [anything less than £20] really is a key price point. For example, we were stuck at the end of 2011 with a lot of high ticket price LEGO sets that were being smashed on the internet to below cost. So in 2012 we took the strategy to sell four £29.99/£39.99 LEGO sets which is a lot easier for us to sell than one £100 LEGO set. My LEGO sales were up.
Nigel: Just after Christmas we knocked 30 per cent off the high-ticket price toys to clear them, then we kept to below around £30. I stocked Furby in limited numbers [last year] but once they went, that was it. I didn’t re-order.
James: I did the same with Furby, I had 24 pieces and sold them all for £59.99 each. They all went no problem at all. With tablets, I didn’t really touch them. I thought I’m not going to get into that battle.
What are the main challenges you face as independent toy retailers?
Bhav: I find the biggest threat is the openness of the market. Discount stores are popping up everywhere and the number of toys these companies are doing is increasing. So there’s not just competition from the usual High Street stores. It seems toys are in every third or fourth store on the High Street. That is potentially taking
Nigel: I’ve been looking at trimming costs as much as possible because we don’t know where footfall is coming from. I’m doing the Toymaster catalogue for the first time this year, so I’m expecting big things from it. And I think what Ian says is usually right, so... (laughter in the room)
Ian: At the end of the day all we do is evaluate. We take what’s working and tell everyone about it, and vice versa. If someone tries something that doesn’t work, the best thing you can do is tell others they might not want to do that, with the greatest respect.
What are the hot brands of the moment for you?
Nigel: The old favourites still do well for us like Peppa Pig and Fireman Sam. There’s a lot of pre- school brands out there but nothing really stands out for me at the moment.
Ian: It’s a minefield trying to choose licences. But in a funny way that helps us. If everybody wants the same thing and know what it is, they don’t come to us, they go on the internet. If you don’t know what you want to buy your child, you come to toy shops for advice. Not having a must-have toy at Christmas is probably one of the better things for us, in a funny way.
What do you think about calls to ban advertising targeting children? How much would that impact your sales if ads for toys were banned?
Ian: I think five years ago it would’ve had a devastating effect. Because it’s so diversified now, if all ads go, then it strengthens our position again, because it comes back to catalogues and other media. The suppliers are the ones who have the problem. What do they do – how do they promote the product? Well we can give them the catalogue and space for the windows. You can’t launch a brand without doing something for it. If TV’s gone, they’ll come up with something else, like sponsorship of TV programmes. With the greatest respect, [banning kids ads everywhere] is not going to happen.
Will you be stocking Disney Infinity this year? Do figures that work with video games sell well for you?
Bhav: At the time we stocked Skylanders, it did very well. But it stopped quickly.
Nigel: That’s interesting because we stocked Skylanders and it’s been very, very good for us. But Suffolk is about two years behind [the rest ofthe industry].
Bhav: ...do you want some stock? (laughter in the room) We have to jump on board [with Disney Infinity], purely because there’s an increase in online worlds/gaming merging with the toy industry.
James: We’ve had success with Skylanders. I felt like it’s a product I’ve had to stock because I’ve been asked for it. But I think through [distributor] The In Thing and being able to get top-ups the next day, reacting quickly has put us in a good position in our town.
Ian: With Disney Infinity, Disney had Club Penguin two years before Moshi, but made an arse of that. With the greatest respect, Disney doesn’t have a great track record on this sort of stuff. And they’ve never been very good at actually selling product to toy retailers. So it’ll be interesting to see what happens.
Do you use eBay/Amazon marketplaces as another sales avenue?
James: We use a combination of all of them out there – Amazon, Shopatron, eBay. The danger with all that is I don’t think you can build a business around it. Amazon only need to change one rule and it’s all gone. They take a cut, too. We use it to clear stuff.
Bhav: Online presence for us on eBay and Amazon has increased this year, and we’ve just launched a Facebook shop. It’s difficult to gauge but it’s there, and if you’re not there, ultimately you’ll get left behind.
What did you think of this year’s Toymaster show, what are the benefits of attending?
Ian: Because I’m paid to. (laughter)
Bhav: It’s fundamental to attend with the offers suppliers give us.You lose money by not coming. And how many opportunities do you get to set down with suppliers and have a drink or three?
James: The social side is great. It’s good to talk to members. I’d like to do more of that, if there was a way for members to communicate more.
Bhav: A members forum would be good. It’s important for us as to help each other.
Ian: There was one three or four years ago and nobody used it (laughter in the room). Perhaps we should try the forum again, but I’m a great believer that you cannot beat face-to-face.
What do you think the future holds for independent toy retail?
Bhav: It’d be wrong of me to say it’s going to be fantastic. It’s getting harder, but we’ve got to be positive, because we can’t close up shop and leave tomorrow. There’s a lot of room for improvement.
James: I wouldn’t want to be an independent toy retailer that wasn’t in Toymaster. They do a fantastic job. All the stuff with the internet, I think it’s starting to mature. Suppliers are learning about whether they sell direct to the consumer or not. I think we’ve been devalued over the past few years.
Ian: I think when our grandchildren die of old age, there will still be independent toy retailers in this country. It will change, the High Street will end up more residential and social with more coffee shops and wine bars.
The attitude toy suppliers have to the internet is also changing. They see the damage it’s done to their brands and there will be some movement on that in the next six months.