Let’s start this week’s Blog with some of the more positive news from the toy market: talking to Toymaster’s Paul Reader, I was delighted to hear that trading ‘out in the field’ has been strong in recent weeks, with retailers situated in coastal and tourist resorts having a particularly fantastic summer so far. Meanwhile, Spin Master was the latest toy company to unveil an excellent set of Q2 results, while skateboard suppliers will be thrilled at the medal-winning performance of 13-year-old Sky Brown at the Olympics – she will surely inspire many kids to take up skateboarding, so retailers can expect a nice sales boost over the summer and beyond.
In more good news, the rather splendid August issue of Toy World landed on desks earlier this week, which saw us maintain our 80%+ commercial market share so far this year, while former Argos buyer Matt Stent and long-time Rubies’ licensing specialist (and fellow Watford fan) Samantha Bourne have joined the Jazwares EMEA senior leadership team. Elsewhere, registration has opened for the Independent Toy & Gift Show, so hopefully the toy community can once again look forward to meeting up at domestic trade events very soon. And the Evergreen has finally docked in the UK – toy suppliers with containers onboard will be relieved that their goods have finally arrived. So that’s all good…
Maersk will also feel they have had a good week, after becoming the latest shipping line to announce record turnover and profits for Q2. But here is where the thin line between what’s good for one company and what’s good for others becomes incredibly blurred: suppliers will look at their massively inflated costs and Maersk’s massively inflated profits and feel that something isn’t quite right – it almost feels like they’re taunting their customers.
But what can suppliers do? One US furnishing company has responded by taking legal action against two ocean carriers for collusion on pricing and failure to honour contractual obligations. It’s a bold move – but realistically, is it viable? Toy companies will be watching the outcome with interest, but I don’t sense any great appetite for protracted legal proceedings within the toy community. This impending legal battle is not the only thing toy suppliers and retailers will be watching closely; fresh Covid outbreaks in China have raised the possibility of even more upheaval in the supply chain. Air freight rates are said to be soaring after Covid cases led to the closure of Nanjing airport. Airlines have arguably suffered even worse than shipping companies over the past 18 months, so you can certainly see why they would want to take a leaf out of the shipping companies’ books and hike prices.
With the current supply chain turbulence, supply chain managers are the new rock stars – previously unsung and very much backroom operators, both the Hasbro and Mattel CEOs credited their supply chain teams with minimizing the effects of the crisis in recent earnings calls, with Mattel’s Ynon Kriez referring to his team as “a competitive advantage.”
After last week’s column, my good American friend Chris Byrne – The Toy Guy – got in touch with news of the measures some US companies are adopting to address the current supply chain challenges. Certain companies are looking at shipping products unbuilt and assembling components in the US – assuming they have products and components that aren’t easily damaged in transit, it is definitely an option worth exploring. Indeed, I gather a few UK companies are already doing something similar. Chris also told me that Walmart and Target are offering space in their own containers for items that they’re making bets on—especially exclusives. Although he did point out that there is no word on what they’re charging for that special concierge service – I’m guessing it won’t be cheap.
I just hope it works better than Amazon’s freight service – I heard from one toy company this week which has been receiving huge chargebacks for late and even early delivery from Amazon – despite the fact that Amazon is handling the whole delivery process itself, through its own Amazon freight service. Brilliant – charge a company to provide a service, don’t do it correctly, then charge the company for your own mistakes. Whoever came up with that ruse is clearly a bona fide genius and probably destined to go on to run a shipping company in the very near future.
I have occasionally been guilty of using Amazon as shorthand reference for online platforms as a whole, and it has been pointed out that I sometimes let other platforms off the hook. Thankfully, a Which? Report this week has given me the opportunity of calling out other online retail miscreants: so step forward AliExpress, eBay and Wish, it is time to share the spotlight of shame with my old friends at Amazon Marketplace. It is a depressingly familiar tale: you won’t be surprised to hear that the four platforms have all been found guilty of featuring sellers offering unsafe, dangerous toys. 40% of the toys tested failed standard safety tests, with 10 toys presenting a choking risk and two posing a strangulation risk. To be fair, as a consumer, if by now you haven’t realised that buying from the Wish ‘carousel of crap’ (as it is often referred to online) is a really bad idea, there is arguably little hope for you. But while I fully understand the principle of caveat emptor (largely because I am one of the people who studied Latin at school but sensibly doesn’t think it should be reintroduced to the curriculum), I don’t believe online platforms should be able to obviate responsibility and put all the onus on the consumer to decide whether something is safe or not.
Apart from anything else, this is such a slap in the face to all those legitimate toy suppliers and retailers who do take their responsibility seriously, spending an absolute fortune on testing each year in the process. As an industry, we have made so much progress over recent decades: there has been a dedicated global effort to address the issue of unsafe toys, and we don’t want a few cowboys to bring the toy industry’s good name into disrepute. I can’t imagine the genuine sellers on these platforms being all that thrilled either – there is always a danger that they’ll be unfairly tarred with the same brush. I just wish the platforms would take proper steps to address the problem – not just issue the kind of mealy-mouthed statements they gave to Which? in their embarrassingly laughable ‘defence’. Come on chaps and chapesses, sort it out.