If you want to know what has been going on in the toy trade, here’s Friday’s Blog, for anyone who missed it at the end of last week.
As we head into the ‘make or break’ weeks of the year, it is inevitable that people start to get a little nervous. A retailer recently flagged up to me that there have been some quite hefty week-on-week sales drops across October compared to last year, although I do think it is important to put them in context.
Last October saw unprecedented demand, with many consumers correctly anticipating an impending lockdown, thus making sure they were stocked up nice and early for Christmas. Amazon Prime Day also took place in October last year: as well as sales driven directly by Amazon and its third-party sellers, many other retailers activated promotions in an attempt to compete. In addition, early Black Friday deals started to arrive at the end of October last year – by comparison, they have only just started to appear this time round. Grocers’ half-term promotions were also apparently far more aggressive last year, while Argos ran a half-price toy sale in ’20, which has been replaced by a 33% sale this year.
When you take all of that into consideration, there are at least mitigating factors behind the subdued October data. Historically, UK toy retailers have tended to see an upswing after Halloween and Bonfire Night. The weather has turned this week too, and festive TV ads are now flooding the airwaves. So, let’s see what the next couple of weeks bring and hope that the October performance was just a blip, possibly exacerbated by supply chain issues. On the positive side, one good week of sales in December can be the equivalent of a month’s sales throughout the year, and at least it doesn’t look like we are going back into lockdown in the UK, as I hear some European territories may yet be facing in the run up to Christmas.
Although the big boys have been more measured with their promotional activity this year, any hope they would cut it out altogether has been dashed in recent weeks. Midco’s Dave Middleton posted a picture on LinkedIn of empty fixtures at Tesco, below posters advertising ‘20% off with Clubcard’ deals. I guess, as with Black Friday, those retailers reached the conclusion that consumers have become conditioned to expect deals at this time of year, so they had no choice but to give them something. While disappointing on many levels, when your Q4 business has been driven by – even predicated around – aggressive promotions, perhaps it is just too big a swing to do nothing at all. Maybe they need to gently wean consumers off the habit rather than forcing them to go cold turkey?
However, there is no doubt that promotions have had to be carefully constructed this year to avoid them turning into loss-making initiatives – and I doubt that is going to change drastically as we head into next year. Talking to suppliers about ’22, the extent to which prices will have to rise next year is occupying much of their brain space right now. One supplier likened it to iconic TV gameshow Play Your Cards Right – you reveal your latest price list to retailers and then play a game of ‘higher or lower’. Obviously, the supplier says higher every time, the retailer says lower. Hopefully, eventually both sides reach the point where ‘The Price is Right’ (to squeeze every last drop out of the gameshow analogy).
And then, naturally, there is the eternal question of the level (ish) playing field: I was present when a retailer and supplier were talking in general terms about the thorny question of price rises recently, and the retailer was adamant that he would be prepared to accept them (within reason, natch) providing every other toy retailer did the same – with no exceptions. Understandably, he wasn’t prepared to hand a competitive advantage to anyone. So, what happens if and when a particular retailer – and I think most of you know who I am referring to at this point – refuses to accept price increases. I have seen emails that show just how difficult it is to negotiate (in the traditional way) with said retailer. That’s going to make for some interesting discussions next year…
In early editions of last week’s Blog, we included a link to a web page for prospective employees to register their interest in being part of the new Toys R Us UK operation. Unfortunately, there was a glitch in the form (nothing to do with us), which meant people couldn’t submit it. Because of time differences with Australia, we deleted the section until the problem had been rectified – so one more time, here is the link for retail professionals to apply. (Also more info here.)
Applications for the 2021 Toy Retailer of the Year awards are also now open – click here to find out about the categories (including a new one this year, Omnichannel retailer) and how to enter. You only have until 6th December to get your entries in, so best get onto it now before hordes of consumers descend on your store when the festive frenzy finally kicks in.
Next week sees another important step on the road back to normality, with BLE taking place at Excel from Wednesday to Friday. I am looking forward to seeing as many licensors, licensees and retailers as possible over the three days – drop me a line if you would like to catch up at the show, I still have a couple of gaps in my schedule. So far this year, I have only attended UK-focused trade shows – BLE traditionally attracts visitors from across the globe, especially Europe. So, I very much hope we will see a healthy attendance from the international market next week.
To help get everyone in the licensing mood, I just wanted to share the latest Lightyear trailer. It is no secret that we, along with many other media operations, have our own ‘challenges’ when it comes to working with those marvellous people at Disney. However, you can’t fault their creative genius. This looks amazing, and not just because it prominently features one of the unmistakeable songs of my musical youth. Altogether now, “there’s a Star-MAN waiting in the sky…”
