Is everything OK…it’s the Friday Blog!

Some of you may remember that we attempted to arrange a shipping webinar back in the summer, which unfortunately had to be cancelled. I learnt a couple of valuable lessons: first, giving advanced technology to a freight forwarding salesperson working from home with dodgy broadband is like putting a learner driver in a Formula One car – it isn’t going to end well. Secondly, if you want to have a frank and honest conversation about supply chain issues, it is probably best not to involve very senior people directly involved in the shipping business. To be fair, I can understand why they wouldn’t want to be ‘black balled’ by shipping owners, and perhaps I shouldn’t have been surprised to find out just how vindictive some of those shipping magnates can be.

However, if at first you don’t succeed, there are always other avenues to pursue. So, I am delighted that we have teamed up with two hugely respected toy industry bodies – the British Toy & Hobby Association and Toy Industries of Europe – to bring the toy community a webinar we’ve entitled ‘Supply Chains, transportation and toys – thoughts into the future.’ The BTHA has managed to secure a couple of excellent speakers: Dr John Mangan, who holds the chair in Logistics at the School of Engineering, Newcastle University, and is also visiting professor at the School of Business, Trinity College Dublin, and Iain Prince, associate partner of KPMG’s Operational Transformation practice and head of KPMG’s Supply Chain team. Together they have great understanding of the key issues and what may lie ahead in this fractious and chaotic arena in 2022.

The webinar will take place on Friday 10th December at 2.00pm GMT – if you haven’t already signed up, you can register here. I will be moderating the event, so if you have any questions you would like me to put to our esteemed panellists on the day, by all means let me know. I hope it will be a lively, informative and above all honest look at the whole thorny logistics issue – and hopefully this time, no-one will endeavour to pass off obscene record-breaking profits as ‘just one of those things, a simple supply and demand issue.’ When someone says, ‘nothing to see here’, the journalist in me tends to think the complete opposite.

I covered the evolving Nuremberg situation in last week’s Blog. For those who missed it, events this week have largely reinforced what I was told, at least in the short term. The new coalition government has allegedly blocked outgoing chancellor Angela Merkel’s suggestion for a two week country-wide lockdown – for now. Although, in some respects, maybe it would have been better had it gone ahead, as it could potentially have helped to break the cycle of rising infection rates while there are still over two months to go before the show. However, despite declining an immediate lockdown, the German health minister admitted ‘nothing could be ruled out for the future’. With Bavaria described as a ‘hotspot’ where the situation is ‘very, very dramatic’ and talk of ‘regional measures’ where necessary, I am sure everyone in the toy community will continue to watch the situation extremely closely. I gather that some German companies have returned to working from home, so perhaps preventative action now will help calm the situation down over the winter. We all want the show to go ahead, but equally we all know that the clock is ticking. The Spielwarenmesse organiser has reaffirmed safety measures for the event, which it says it will regularly update in light of prevailing developments.

As we head into the final straight as far as the year’s trading is concerned, it’s good to see retailers not afraid to expand their operations – this week saw the announcement that Menkind has completed the acquisition of Hawkin’s Bazaar and Stocking Fillers, which were both previously owned by H Grossman Ltd – this strikes me as the perfect fit for Menkind and a smart move all round. And in local news, congratulations to Toy Galaxy on the opening of its new Watford branch, which becomes the fifth store in the retailer’s portfolio. It’s very close to a branch of The Entertainer, but I’m pleased to see that didn’t deter them – there is plenty of room on the High Street for good quality toy specialists. I’d also like to congratulate Character Options duo Mark Hunt and John Elliot, who have been promoted to marketing director and R&D commercial director respectively.

Elsewhere, Pre-Show Noël has been taking place in Deauville this week, while preview season is very much in full swing here in the UK. It has been great to visit showrooms again: zoom previews were all very well and good when we couldn’t meet in person, but they were never a substitute for the real thing – and I am sure the vast majority of retail buyers would agree with me.

Finally, I couldn’t finish the Blog without a passing reference to the most talked-about individual in the kid’s market this week…Peppa Pig. Given it takes a donation of around £3m to secure a peerage these days (allegedly), I can’t imagine what incentives were forthcoming to make Peppa Pig World the centre of our Prime Minister’s keynote speech to the CBI. Mind you, a free family entry ticket, a couple of fast passes to avoid the queues and an all-you-can-eat lunch buffet and I reckon he was putty in their hands. Although it was a completely bizarre speech (and slightly worrying – it’s not like we’re trusting this buffoon to get us through a crisis or anything), on one level he was absolutely right – Peppa Pig is indeed a fantastic success story that started in Britain, and we should rightfully be proud of what the team behind the brand has achieved. And in fairness, if anyone has needed a lift this week, looking at Boris / Peppa memes on social media is guaranteed to put a smile on your face. De Pfeffel Pig is my personal favourite – well worth googling.

(Made it to the end and didn’t mention Black Friday once…if there is any fallout or anything worth mentioning, I’ll come back to it next week).

It’s all kicking off…it’s the Friday Blog!

I’ve spent most of this week at Excel for the BLE event – another successful step on the road to trade show recovery. The licensing community has always been a sociable bunch, favouring a face-to-face approach to doing business. So, it was no surprise that people enthusiastically embraced the opportunity to meet up in person once more, leading to a buoyant and convivial atmosphere. Just as we saw at other events in September, people were just delighted to be back together again.

There were a handful of big names missing – hopefully for one year only – which at least one licensor called out right at the start of its presentation. However, this meant the aisles were wider and there were plenty of places to sit and talk – this wasn’t the year for the show to feel ‘crammed in.’ UK attendance was strong, especially amongst licensees – and if international attendance was below traditional levels, that was only to be expected. That said, I had meetings with visitors from Germany, Italy, the USA and Israel amongst others, so there was still a highly respectable overseas presence.

Credit to Anna Knight and the Informa team for putting on such a successful BLE show; they did a sterling job in challenging times.

If you are one of those hyper-organised people (or someone with a 30th wedding anniversary trip to plan, whose wife would not be impressed with her surprise trip being three days in the Novotel at Excel), it’s worth noting that the dates for next year’s event move yet again – not back to the show’s traditional October timeslot, but 20th-22nd September.

Traditionally at this time of year, most conversations open with a question about how festive sales are faring – however, this time round there were two other hot topics everyone wanted to talk about at BLE: the supply chain and what might be happening with the Nuremberg Toy Fair. I’ll leave the supply chain for next week when we’ll have something to announce. So, let’s look at the Nuremberg situation. Most people will have seen the headline news coming out of Germany this week: Covid cases increasing rapidly (65,000 yesterday, and rising each day), low vaccination rates (only 63% of Germans are double jabbed) and Bavaria – home to Nuremberg – being the second worst-affected state. All of the evidence was pointing one way, and lots of people started to put two and two together. Fortuitously, one of the directors of the show was at BLE, so I was able to get some direct feedback on the situation.

Thankfully, it appears that things may not be as bad as they first look. The German government has proposed some measures which have yet to be approved, but at this stage, lockdown doesn’t appear to be on the cards. Nor are trade shows thought to be in danger; some mass events such as concerts and football matches could be temporarily banned, but trade events are being treated separately. There is talk of unvaccinated people not being allowed on public transport, and even a possibility that bars and nightclubs could have a curfew imposed (note to Bavarian officials: if the Irish bars are closed, we riot). But unless the situation deteriorates rapidly and the government is forced to consider even more draconian measures, the feeling is that the show will go on. There will be fewer visitors from some regions (chiefly Asia and the US, I would imagine), but the core German domestic, mainland European and UK audience will hopefully be fine to attend – as long as they have been double jabbed.

The other big story of the week was the news that the trial for The Entertainer to run Asda toy departments will soon be wound up, with Asda taking back control of the toy aisles across its whole estate. Some people will surmise that the trial didn’t work in practice, but I understand the reverse is true. I have it on good authority that the results exceeded all expectations, both in terms of sales performance and customer satisfaction. The news seems to have come as a surprise to store staff (and presumably the team at The Entertainer), as the general perception was that it was all going according to plan.

So why bring the arrangement to a close? This is a very good question, and the answer is likely to be quite complex, with our old friend ‘internal politics’ probably involved. It is, of course, entirely plausible that not everyone at Asda was fully on board with the idea in the first place; you could see why some people would have been uncomfortable. It is also plausible that by smashing every target, the trial has given Asda the confidence in its ability to shift toys in large volumes. But therein lies the conundrum: if it was that easy to deliver the numbers, why weren’t they doing it in the first place? (At least, presumably they weren’t, or the trial would never have happened. Someone, somewhere needed to be convinced of the scale of the opportunity).

Sure, Asda now has all the data from the past year, so maybe they think it will be straightforward to just take everything back in house and carry on hitting the numbers? Maybe it will. But if you tell your board you can do that, I guess you have nowhere to hide – you need to deliver on that promise. Let’s see what happens.

Finally, it has been fascinating watching the Amazon Visa confrontation this week. There have been all sorts of maverick theories about impending wars between large retailers and credit card companies, or how Amazon was attempting to disenfranchise Visa due to its relationship with Mastercard, but apparently our old friend Brexit is very much at the heart of the disagreement. It turns out that Amazon’s decision to run everything from Luxembourg gave Visa the opportunity to increase the interchange fee from 0.3% to 1.5%. The fact that Amazon has announced that it will not stop accepting Visa until 19th January presumably leaves the door open for last-minute negotiation to avert the partnership being severed, but on the basis that one of my contacts received an email this week from Amazon relating to a dispute originally opened in 2019 which is still unresolved, I wouldn’t hold your breath.

ICYMI: A Festive Frenzy… it’s the Friday Blog!

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…”

Didn’t I blow your mind (this time) … it’s the Friday Blog!

We’re not even past Bonfire Night and retailers’ Christmas TV ads have already started appearing on screens – it is not just toy retailers that are trying to push the ‘shop early’ message. With the ongoing supply chain challenges (I heard this week that one of the largest 3PL providers to the toy market is facing major issues) and the prospect of consumers going all out to make this a special Christmas after a tough couple of years, it makes sense to drive sales as early as possible and to emphasize that waiting for Black Friday would be a high-risk strategy.

Indeed, talking to retailers this week, it seems there is an expectation that Black Friday could be a strange event this year – and possibly even something of a damp squib. Given the prevailing conditions, I wondered if retailers would even bother, but the general consensus is that the public wants it and has come to expect it, so they will grudgingly have to do something, even though many would love to ditch it completely.

But what exactly is it that consumers have come to expect? Next day delivery? I can’t see many – if indeed any – retailers promising that this time round. And as for massive price drops, there doesn’t seem to be a surplus of stock around to make that necessary or desirable, and I can’t see many suppliers funding big Black Friday discounts, given the extra costs many have had to swallow this year. In the end, I suspect that many Black Friday deals will turn out to be more smoke and mirrors than genuine offers.

At this point, it seems pertinent to point out that Maersk has tripled its quarterly profit, despite shipping lower container volumes. For those who say ‘but it’s just market forces’, I would argue these results suggest there is more to it than that. Several suppliers have been in touch to ask if any bodies are coordinating any form of official response, but realistically, what could that achieve? No working group or trade body has any power or sway over the shipping companies, while I am not sure our government would even think about intervening in the free market – so, right now, it seems to me that it is a case of ‘every man (or woman) for himself.’ Even Sainsbury’s had the edge taken off its latest six-monthly figures by a 12% decline in Argos’ revenue, with supply chain challenges cited as a key contributory factor – and it has delayed a major Christmas toy promotion due to shortages. So, even our largest retailers with the greatest clout are not immune to the problem and seemingly can’t do anything to rectify it.

All we can do is to keep hammering home the message to consumers about not hanging on until the last minute if they have specific toys to purchase. DreamToys spearheaded the latest push on that particular front this week. It was certainly a different event this time round: scaled back and with a little less razzamatazz than in the past. If there was arguably less coverage of the event as a whole, it was nevertheless encouraging that the event led to a couple of high profile TV slots – a crack of dawn appearance for Gary Grant on BBC Breakfast and a strong item on This Morning. There was also a respectable level of coverage in the national press, with most of the main newspapers highlighting this year’s Top 12.

The usual caveats apply to the list – it wasn’t a definitive guide to the toys that will make up the top 12 best-sellers come Christmas, but it gave a nice snapshot of what’s on offer from a range of leading toy suppliers. The inclusion of Gassy Gus is the perfect example – it got a lot of coverage because it allows for a bit of humour to be brought into proceedings, both in the written word and even more so with filmed segments – Philip Schofield making Gus fart in the background as Holly was trying to keep a straight face while learning how Magic Mixies works showed the importance of having media & broadcast friendly lines in the mix.

On the subject of media friendly though, I couldn’t let something pass without comment: I know we turned the clocks back this week, but DreamToys PR Bastion went a step further – turning the clock back 40 years by giving press attendees a paper press release. Paper. This is about as useful as giving us an em ruler or a transparency (publishing in-joke). It’s going to blow their minds when someone tells them about USB sticks.

I assume non-attendees received a visit from the Bastion carrier pigeon with details of the winners. Mind you, it would still have got here quicker than the email with the official release. Given the vary large sums that companies featured in the top 12 are charged for the privilege, I am genuinely amazed that there aren’t better resources made available for the media.

I fully appreciate that this was an unusual and challenging year, and it could be that some media outlets felt they have covered toys extensively already, between the myriad individual retailers’ lists and supply chain issues. But in my humble opinion, all the more reason to give it a bit more welly and ramp up the excitement – and at least give media the basic tools they need to do their job.

We’ve certainly been doing our job: we just hit record online traffic numbers over the past 30 days thanks to a succession of major news stories, topped off by the Toys R Us news last week – I gather that well over 300 vendors have registered their interest in becoming a partner via the link we ran online.

Meanwhile our largest-ever November issue hit desks this week – and the digital version of the issue is also available to read online. We’re now well into work on our preview issues for the London and Nuremberg Toy Fairs, so get in touch now to find out how you can be involved.

Finally, as all the Christmas TV ads start to work their magic, we were delighted to be able to bring you an exclusive sneak peek at the Smyths festive campaign yesterday. If you missed it, you can view it here – it’s yet another mind-blowingly good festive ad from Smyths. Let’s keep ramping up that excitement!

I did not see that coming…it’s the Friday Blog!

The week started in the way most weeks do at this time of the year. We’re very busy, but certainly not complaining about that – 2022 is coming up rapidly in the rear-view mirror. Mattel and Hasbro released their Q3 results, with both companies posting strong numbers, despite the obvious global supply chain challenges – Hasbro even admitted that it had missed out on $100m of orders during the quarter due to an inability to fulfill them, and yet still announced solid growth.

It was great to see another important step on the road back to normality, as registration opened for the London Toy Fair next January, while ticket sales have also commenced for the Nuremberg Toy Fair. Meanwhile, on the other side of the world, a Chinese official apparently told the FT that the removal of quarantine restrictions in Hong Kong could be delayed until November ’22, after the communist party conference. The FT isn’t given to printing rumours without having a credible source, so assuming this is plausible, it would not only rule out any trips in the early part of next year, but even call into question the prospect of international visitors heading there next autumn and even – whisper it quietly – in January ’23. It’s all speculation at this stage of course, but I would imagine that the Hong Kong exhibition sector, as well as companies with showrooms there, must be tearing their hair out in frustration.

So far, so typical. Then came an almighty curveball. I woke up on Wednesday morning to an email announcing that Toys R Us would be returning to the UK market, courtesy of a deal with Toys R Us ANZ, the company running the brand in the Australian market.

When HMV owner Doug Putnam acquired Toys R Us Canada a few months ago, he made a cryptic comment about the possibility of bringing the TRU brand back to the UK market – a sort of ‘never say never’ remark. Jo Hall, who heads up Toys R Us Asia, knows the UK toy retail market better than just about any international retail figure. Both would have been favourites to spearhead such a move, yet the company tasked with moving forward with the project has had no previous involvement in the UK retail sector, albeit they have enjoyed tremendous success in the domestic market.

Inevitably, as soon as the story broke, I was inundated with questions from UK suppliers about the new UK operation. The press release contained a relatively decent level of detail for an announcement of this sort, but there were still many unanswered questions. So, this morning, I headed into the office early, where I spent the first hour of my day talking to Dr Louis (pronounced Lewis) Mittoni, the man behind the return of TRU to the UK. As a result, I have done something I rarely do – I have hastily rewritten today’s Blog to incorporate just a small part of that hour-long conversation. It turns out that Louis is an engaging personality and hugely passionate about toys – and, of course, the Toys R Us brand. He describes the plan as “not so much a relaunch – it feels more like the brand is coming home.”

So, here is what we know so far. The agreement covers both physical stores and a digital presence. Louis refers to the company’s strategy as a ‘digital first’ model, which makes perfect sense: the Australian outfit has a strong record in the digital space – before TRU, Louis ran his own eCommerce business Hobby Warehouse, the infrastructure of which was used to set TRU up. The company has also invested heavily in its state-of-the-art Australian warehouse facilities, which feature cutting edge robotics. All of this technology is very much transferable, and will give the retailer a strong base to build from.

However, I suspect that the ‘physical store’ aspect of the plan is going to come as something of a surprise to many in the toy community. Sensibly, the thinking is not about how TRU has approached its store estate in the past, but how consumers shop now and how they will shop 5-10 years into the future.

So, forget warehouse-style 40,000 square foot stores on retail parks across the country. Louis’ plan involves a far more experiential physical store environment – a concept he describes as ‘the endless aisle.’ A quick way of describing it would be to imagine a massive, state of the art DC (200-300,000 square feet) – and bolted on to the front of it, a 20-30,000 square foot retail space. The idea is that consumers would spend time getting hands-on with the toys and nursery goods, then be able to order any one of 30-40,000 products, which would be delivered to you within a minute via the cutting-edge robotics integrated into the facility.

It’s certainly an ambitious vision – but I’m sure that consumers will be fascinated by a place where they can touch, feel and try out product, and then order from a vast range.

Unsurprisingly, Louis has received a deluge of request to connect, with people wanting to find out more about the plans and timescales. So, I can exclusively reveal that to in order to record and respond to the immense number of supplier enquires (toy, baby, 3PL, services etc) that have been flooding in, a dedicated ‘expression of interest’ page has been set up for potential partners to register their interest, which is http://eepurl.com/hL38FL

Louis is keen to hear from former suppliers to TRU, new and upcoming companies, service providers and anyone else who want to be part of what sounds like a fascinating journey. The previous TRU philosophy of supporting new vendors and new ranges is very much still in place – one of the key elements which many suppliers told me they missed when TRU disappeared.

I gather the next phase will be to set up a similar page for prospective staff, which we’ll let you know about when it goes live. In fairness, the new operation isn’t hanging about – in addition to creating a way for interested vendors and staff to get in touch, they have also been exploring ways to start supplying the UK market with product. It sounds like they are very much hitting the ground running, and we’ll bring you more details as and when they are available.

Hang on to your hats folks…

Cash from chaos…it’s the Friday Blog!

It was great to see so many of the great and good of the toy community come together for this week’s BTHA Industry Day. Continuing the theme from every post-pandemic industry gathering I have attended thus far, everyone seemed delighted to be out and about, mingling with their peers and colleagues once more.

It was good that so many managed to carve time out of their busy schedules, during not just a busy part of the year, but also a period when curveballs are being tossed left, right and centre with alarming frequency. Being away from the desk right now means risking something big blowing up and you not being there to address it. Not that anyone was discussing confidential or commercially sensitive information with competitors, but with the whole toy community facing similar challenges, it can sometimes be reassuring to be amongst people who are exactly in the same boat as you.

As ever, the BTHA had gathered a line-up of fascinating speakers for the attendees’ listening pleasure: broadcasting legend Sir Trevor McDonald was as compelling as you might have expected. I was particularly intrigued by his admission that he ‘drew the line’ at interviewing former President Trump, having been happy to previously sit down with the likes of Colonel Gadhafi and Saddam Hussein. I also appreciated his tales of the complexities of setting up meetings with the aforementioned ‘leaders’: I feel his pain, having experienced similar labyrinthine process to secure interviews with some senior licensing executives in the past. I’ve also become accustomed to PR people hovering in the corner, but at least they haven’t taken to toting Kalashnikovs (yet…).

The first presenter, KPMG’s Don Williams, had a bit more to say that is relevant to the Blog’s audience. It is important to caveat some of his observations – the Big 4 accounting firms have a vested interest in promoting the theory that the business environment is in a state of perpetual turmoil and upheaval. They literally make cash from chaos – no-one tends to engage their services if business is just ticking along nicely.

However, I felt he made some very valid observations that are worth sharing for those who weren’t present. First up, Don predicted rising inflation and a subsequent increase in interest rates next year – and I suspect few would disagree with that prognosis. Along with the impending increases in taxes and national insurance, plus rising fuel, gas and electricity prices, this all points to the likelihood of a fall in disposable income for many consumers. All consumer goods markets have benefited from many customers having more disposable income over the past 18 months, but unfortunately the pendulum looks poised to swing the other way next year.

Don also pointed out that general retail spending would not return to pre-Covid levels until ’23, which shows just how remarkable the performance of the toy market has been over the past two years – we are way ahead of the general retail curve. However, the reduction in disposable income will herald some changes: according to Don, that is likely to include an increase in insolvencies (which in traditional Big 4 fashion he lauds as a positive thing for business as a whole, presenting opportunities for other companies to capitalize on), along with some big decisions for suppliers and retailers to take when it comes to pricing. Good can come of it – I loved his description of large retailers weaning themselves off the ‘drug’ of using discounts to drive volume. I was also intrigued by the conundrum of whether ‘just in time’ should be replaced by ‘just in case’, focusing less on how cheaply something can be manufactured and more on the optimal cost of putting a product in the hands of the consumer.

I appreciate that retail pricing is a highly complex and nuanced conversation, especially when you factor in the rise in online sales, with the inevitable challenges faced by brick-and-mortar retailers in competing on a far-from-level playing field. Every supplier and retailer is currently grappling with the thorny question of how far to increase prices and at what level a price increase starts to negatively impact rate of sale. But with supply chain issues likely to continue well into next year – both from a pricing and capacity perspective – it’s clearly going to be a source of lively debate over Toy Fair Season.

On the subject of supply chain issues, the shipping industry – another group of people gleefully making cash from chaos right now – appears to have turned on itself this week. Shipping owner Maersk is apparently considering cutting out freight forwarders and dealing directly with larger shippers. Allegedly, Maersk is unhappy that some forwarders have been taking contract rates – around $4,000/feu from Asia to Europe – and reselling the slots to customers for $20,000/feu. One industry source was quoted as saying: “That’s $16,000 Maersk is losing, so the line is looking to punish the forwarders.” Essentially, it seems that suppliers and retailers are now in the middle of a fierce ‘who is the greediest’ competition – I just hope it doesn’t get too ugly. I read a story a few weeks ago about the existence of scalpers in the shipping market – but it didn’t occur to me that legitimate freight forwarders were the ones being accused of doing the scalping.

I am sad to report that industry stalwart Tony Strodder passed away this week. A hugely popular toy community figure of the 80s and 90s, Tony worked closely with David Lipman for many years, before he went on to run his own successful toy business. He also used to organise the legendary toy trade cricket matches and was universally known as a thoroughly decent bloke. A lifelong Leeds fan and proud Yorkshireman, Tony had been battling a brain tumour for some while, but stayed in touch with many from the toy trade via social media. I am sure I can speak for his many industry friends and colleagues when I say his was a life well-lived, and he will be sorely missed.

Finally, a heads-up for those planning their ’22 diaries – after much discussion, Distoy has settled on its dates for next year, which will be 17th-20th May. Identifying clear dates proved to be tricky, with the Queen’s platinum jubilee celebrations and the Las Vegas Licensing Expo both falling on weeks which had potentially been earmarked by organizer David Potter. The chosen dates do clash with the Toymaster Show in Harrogate, although there is relatively minimal crossover between the two visitor profiles. It’s going to be a heck of a busy week (and month) for us though! Mind you, what’s new…

Christmas Magic…it’s the Friday Blog!

The questions I have been asked most frequently in recent weeks (apart from whether Watford were right to sack our manager – we were) largely revolve around what’s happening with Toy Fair Season ’22. I am gradually piecing together the overall picture, so for anyone who is looking for clues, I am happy to share what I have uncovered thus far.

There is, naturally, a huge caveat – we still aren’t out of the Covid woods, and with winter coming, there may yet be twists and turns. However, clarity is beginning to emerge on several fronts. We now know that the Hong Kong Toys and Games Fair won’t be taking place in January. With the 21-day quarantine restrictions extended to March, this also effectively rules out the traditional FOB buying trip for the vast majority of international visitors for the second year running.

Although that’s a huge shame, thankfully, there will be plenty of other opportunities to see customers in the early part of next year. London Toy Fair is very much in ‘full steam ahead’ mode – and with it being the first show of next year’s Toy Fair Season (along with the fact that many of us won’t be exhausted from 7-14 days in Hong Kong), no wonder the BTHA’s mantra is “we’re more ready than we’ve ever been.”

The Nuremberg Toy Fair team is equally bullish about next year’s event. A few people had been in touch in recent weeks to say that they have been concerned at a lack of response from the organisers, but I had lunch with the Spielwarenmesse team this week and they are optimistic about prospects for the ’22 event. There will be some changes (Hall 11.1 won’t be used next year) and some challenges, notably for exhibitors and visitors from the Far East – the travel regulations apply both ways, so anyone travelling from Hong Kong will have to quarantine for 21 days when they return. That is going to put a lot of Asian visitors off. However, for the European toy community, Nuremberg has put stringent safety measures in place to reassure visitors, and there are plenty of new initiatives to keep the show fresh and enticing. So, will there be fewer exhibitors and visitors next year? Almost certainly. Will it still be the world’s largest and most extensive Toy Fair? I very much suspect it will.

New York Toy Fair will be the next stop on the tour – other events have taken place at Javits recently, so confidence is high for the return of Toy Fair in mid-February. The opening of the US borders to international travellers has been delayed, but apparently only until the end of November. Although those who like me had the Astro Zeneca vaccine will be hoping that it will be approved by the FDA in time – this is one area where international co-ordination and co-operation would be enormously helpful, as there is still so much variation when it comes to what is accepted where.

Before the main Toy Fair Season kicks into gear, there is another intriguing option for UK & European buyers: Preshow Noël, which takes place in Deauville, France from 22nd-26th November. Traditionally focused on the French market, the show is opening up to an international audience this year – and there is a very attractive package of incentives on offer to buyers from ‘top 10’ accounts to attend, including free hotel rooms and complimentary lunches. Find out more about that opportunity here.

Meanwhile, back in the here and now, chaos at UK ports has hit the headlines this week, as Felixstowe went public to acknowledge severe delays and congestion, which it attributed largely to the shortage of HGV drivers (although, like all the supply chain issues which have blighted the UK this year, there is never one single cause behind the problems, but rather a complex web of inter-twining factors). This sparked another wave of national media stories talking about potential Christmas toy shortages. Some reporters chose to speak to people who know what they’re talking about – such as The Entertainer’s Gary Grant and Toytown’s Alan Simpson – who gave a sanguine, balanced overview of the situation, and explained the challenges and potential ramifications.

Other media outlets were forced to interview government ministers, who clearly have little idea of what goes on in the business community nor of the specific logistics challenges facing UK importers. These poor souls had to attempt to bluff their way through after a five minute briefing from a spad. It was highly entertaining – if a little frustrating – to watch them attempt to pretend that everything is getting better (it isn’t…yet) and that Father Christmas will be along shortly to save the day. Thankfully they stopped one step short of inventing a Brexit fairy to wave a magic wand and make all the problems disappear. Had I been asking the questions, I might have been tempted to push back on the suggestion that the situation was improving, only a day after the problems at Felixstowe had first been revealed. According to Oliver Dowden, someone managed to sort out total chaos overnight. Maybe he or she should be the government’s new supply chain adviser, rather than former Tesco boss ‘Drastic’ Dave Lewis – who was clearly chosen for his edgy nickname rather than for his specific supply chain experience, which apparently sits somewhere between negligeable and non-existent. Note to Johnson: just because he worked for Tesco, it doesn’t automatically make him a logistics expert. He had people to do that for him.

Finally, tributes have poured in across the world to Hasbro CEO Brian Goldner, who sadly passed away this week, only two days after it was announced that he would be stepping down from his role on medical grounds. I personally never met Brian, but I get a real sense of the man from reading so many warm and heartfelt comments from former colleagues, customers and competitors. They all spoke of his passion, his charisma and most of all what a great, down-to-earth person he was – so many people contrasted him with other high profile business figures, talking of how approachable and fundamentally decent he was. He will clearly be sadly missed by the whole toy community. It was sobering when I found out that Brian was younger than me – as Andy Laughton (another of a similar vintage) said on LinkedIn, “It makes you realise that life is for living.” It certainly does.

Sign of the times…it’s the Friday Blog!

The BTHA’s latest safety campaign went public this week. Still Toying with Children’s Safety (with emphasis on the word still) highlighted yet again that the online platforms have done little to address the problem of unsafe toys being listed by third-party vendors, while proving themselves to be incredibly slow to remove unsafe toys from sale. Putting a human face to the campaign, the report focuses on a 2-year-old child who swallowed tiny magnetic balls and had to have major surgery to repair the damage caused.

This is by no means an isolated incident – the identical thing happened to the daughter of a good friend of mine from the European toy community in the summer. He was absolutely distraught. Thankfully, both his daughter and Rebecca, the girl in the BTHA’s report, were successfully operated on and are now ok – but it could easily have been a very different story.

What the BTHA is asking is simply common sense – that the online platforms are subject to the same safety standards as bricks and mortar stores. I don’t think that is at all unreasonable. Realistically, for that to happen, it looks like the government will need to introduce legislation, as the online platforms have talked the talk, but not got close to backing that up with tangible action.

So, please, help the BTHA to put pressure on the government – no-one is asking you to glue yourself to the road outside Olympia, but signing the BTHA’s petition would help enormously. I appreciate that Amazon and other online platforms have become scarily powerful, and some people might not want ‘to get involved’ – I heard this week about an online seller who has been told by one of her regular toy suppliers that she isn’t allowed to sell an item on Amazon because Amazon’s own stock of the item has been delayed. I have my own thoughts on that, but we’ll leave that for another day.

Today, let’s focus on the fact that we may finally have found one tangible benefit to Brexit (it’s only taken four years…) – the fact that it is now within the UK’s government’s power to change this without needing the approval of other European governing bodies. We just have to make them sit up and take notice.

This isn’t a personal thing: there are many good people working for the online platforms – regular Toy World columnist David Ripley recently joined eBay as Horizontal Trading Senior Manager (there is a joke in there, but I digress…), while someone from Amazon was at my daughter’s wedding recently, and she seemed very pleasant. The issues are more systematic – platforms are obviating responsibility by claiming it’s ‘nothing to do with me guv’nor’. But it IS to do with them. It is a big ask, but it would be great to see this being debated in Parliament – and we can all help to bring about a change. It only takes a minute to add your voice – just click here.

In other news, the Toymaster regionals have been taking place over the past few weeks, and I have heard good things from both suppliers and retailers about the events. There’s also a new board in place at SMF Toytown, as Alan Simpson officially announces his plans to step back into what he describes as ‘semi-retirement.’ This week, we revealed Tesco’s top 10 festive toy predictions, the winners of the Play for Change Awards and the winners of the Blog On Awards (where everyone was a winner…. literally everyone).

There have also been plenty of new appointments to report – Kate Watson has joined Casdon as UK national accounts manager; Caroline Webb has been appointed as EMEA sales manager at Funrise and Kerri Atherton has returned to the BTHA as head of Public Affairs. I also gather that Steve Cox will be leaving Keel Toys (and the toy industry) in the coming weeks.

And, of course, the October issue of Toy World landed on desks this week – you can read the digital version of the issue here. It’s another humdinger, with a big section devoted to licensing – and there will be another special licensing-focused issue coming up in November, when we’ll be previewing the forthcoming BLE show. The show now has over 150 exhibitors confirmed, so I’m sure it will be a great event.

Elsewhere, Smyths released its financial results for the past year – its UK & NI turnover was £666m…sometimes the jokes just write themselves. Oh, and Amazon has opened its first physical non-food store in Bluewater, featuring a host of consumer products which includes toys (although from what I have read, not that many). Reports so far suggest the store provides something of an underwhelming experience, although I guess it depends what Amazon’s end game is here. The dual pricing strategy highlighted in store – one price if you have an Amazon account open, another much higher price if you don’t – may just be a way of persuading more people to set up an Amazon account ‘just in case’, hooking them into their eco-system.

A quick word about the latest on the logistics front, as TNT temporarily suspends its domestic UK service (presumably all of its drivers have left to drive petrol tankers…?), while there have been reports of significant price drops on the China to US shipping routes amid rumours of scalpers selling off spots before the start of the seven-day Chinese National Day holiday, which started this week. It will be interesting to see whether this is a short-term blip, or whether these clearance prices are maintained once the holiday finishes. As we report today, shipping industry title The Loadstar has suggested it will be Q4 ’22 before prices come down, which tallies with what I heard from shipping industry insiders several months ago.

Finally, thanks to all those people who suggested the obvious omission from the list of ‘shortage-related toys’ at the end of last week’s Blog – Frustration! Yep, that sums it up nicely. I just hope lots of those dodgy third party sellers on online platforms realise the list was meant as a joke, and not an actual list of popular toys – if anyone offers you a knock-off version of ‘Eff all on the shelf’, we know where they got the idea from.

 

He’s lost control (again)…it’s the Friday Blog!

2021 – the year that just keeps on giving. This week has seen parts of the UK resemble a scene from the Mad Max movies, as brave souls wander a dystopian landscape in search of fuel, fighting with anyone who got in their way. It certainly puts the challenges faced by toy companies this year into perspective – right now, there are far bigger things to worry about than whether little Johnny will get exactly the right Among Us figure this Christmas.

Of course, this latest fiasco isn’t helping matters – by all accounts, last Saturday’s retail trading was something of a washout, as people who would have been out shopping were either sat in endless queues for petrol or sat at home conserving fuel for more essential journeys. Equally, online deliveries are going to be disrupted if this ludicrous situation persists – the Times ran with a headline saying it may take up to a month for a full return to normality, and to be fair, it is not traditionally one of the national papers given to wild bouts of exaggeration.

Some indie retailers were out queueing at petrol stations at 4.00 in the morning, to ensure their vans had the necessary fuel to keep their stores topped up with stock – that is, of course, those who have been successful (or lucky enough) to obtain deliveries. Those who built up stock levels early will be very pleased they had the confidence to get ahead of the pack.

The shortage of workers isn’t limited to lorry drivers – I saw an email sent to suppliers this week from a major logistics company, announcing peak period surcharges of 30% due to the need to pay higher wages and retention bonuses in order to secure the number of staff they need to keep the supply chain running smoothly. I am going to say something here that may be considered controversial in certain quarters; I wonder whether this may be yet another knock-on effect of the hastily devised furlough scheme. While it has undoubtedly helped some sectors and individual workers, I fear it has also inadvertently distorted the labour market, at least in the short term.

As for the lorry driver situation, what a trucking mess. Giving out 5,000 temporary visas to overseas drivers isn’t going to scratch the surface, and as for the visas expiring on Christmas Eve – that seems an odd mixture of vindictiveness and stupidity. I am sure those lorry drivers who spent last Christmas stuck in a makeshift lorry park in Kent are just dying to do that all over again this year. As one Polish HGV driver was quoted as saying this week: “Why go to Britain, jump all these hoops, face all this hostile environment, if you could go to Ireland or Holland, earn more, be respected, drive on nicer motorways…and be a free European?” Quite.

However, despite the backdrop of infinite chaos and a government that hasn’t so much spiralled out of control rather than one that never had control in the first place (and there was me thinking the point of Brexit was to ‘take back control’…silly me), it’s important not to get too hung up on things that we as a community can’t control. On that note, I was pleased to receive a call from Gary Grant this week – he had just come out of a meeting where he had told his teams to focus more on all the great toys on shelves rather than what isn’t there. Then he read me saying the exact same thing in last week’s Blog and wanted to echo my sentiment – great minds clearly think alike.

The truth is that there are loads of great new toys on shelves, and we should be making consumers feel positive and excited about their impending festive purchases, not giving them yet another thing to be worried about. So, if you are approached by the media looking for another story of logistics nightmares and a ruined Christmas, maybe think about turning that story around and focusing on all the good things we have to shout about?

To that end, retailers have started to release their festive top 10s – the past week has seen both Bargain Max and Midco Toys unveiling their predictions for festive best-sellers, and no doubt there will be plenty more individual retailers’ selections to come before the official Dream Toys list is announced.

This year’s choices will, naturally, be a little different: rather than being literal predictions of what is perceived to be hot, they will need to take into consideration what’s in stock (I managed to secure a container – and it has actually been delivered to store…quick get it on the list!) and pricing (I only had to add 20% to the price of that line – so add it on before the price goes up).

I also received a suggestion for an ‘alternative’ top 10 from Paul Clarke at Canal Toys, reflecting the joys we are all currently experiencing. If you have any other suggestions, feel free to drop me a line.

1. Eff All on the Shelf

2. Baby Born Overdue (January) Doll

3. Asmodee Stocks at the Docks Game

4. Hot Wheels No Delivery Driver Track Set

5. L.O.L. You Want it for Christmas!

6. Lego Nonstocko Action Figures

7. Monopoly Shipping Company Edition

8. Exploding Parents Card Game

9. Harry Potter I Can’t Magic Up Stock Wand

10. Hornby Going in Circles Express

Christmas is NOT cancelled…it’s the Friday Blog!

“Soaring bills, empty shelves and NO toys for Christmas” screamed the Daily Mail headline last weekend. Clearly, I am familiar with the idea of journalistic licence and the concept of hooking readers in with a hyperbolic headline. But this example reinforces something I have been feeling for a few weeks now – that perhaps it is time to subtly alter the industry messaging around potential toy shortages. We know that what we have been saying is accurate, but once you put the message out into the big ugly world of the national media, the nuance can easily get lost. Yes, some items will be in short supply this year – but we never said there would be empty sacks under the tree. That just makes us sound a bit incompetent.

Thankfully, toy shortages have been knocked off the front pages by the energy crisis (Crisis, watt crisis?) – which may be no bad thing at this stage. Anecdotally, the message about shopping early for Christmas appears to have heeded by a healthy number of consumers. Maybe now is the time to pivot (can I still say that without sounding corny?) and focus on all the great toys that are in stock, rather than being overly negative about the potential for empty shelves (and remember, no toy company or retail store ever went bust selling every piece of stock it had).

John Lewis is one of several retailers that has taken the step of chartering its own boat in a bid to address stock shortages and sky-high shipping rates. One wag got in touch to say he wondered if that means Steve Redgrave and Matthew Pinsent are coming out of retirement. But joking apart, there have also been low-level mutterings about ‘reprisals’ from shipping companies against those who are chartering their own ships. Shipping industry insiders have been dismissive of this suggestion on LinkedIn, but for what it’s worth, I heard similar hints about retribution months ago, although then it was aimed at anyone in the shipping community speaking out about the exorbitant rate hikes. The word ‘vindictive’ was used on more than one occasion. I have no idea whether the threats were real, implied or just paranoia, but people better placed than me to comment certainly inferred it was a genuine concern.

John Lewis managers have also faced an internal backlash after it emerged five-figure bonuses had been paid to some senior staff at a time when the company has been making widespread redundancies – echoes of the last days of Toys R Us, for anyone with long memories. Some might say it’s another example of a business decision being blown out of proportion by the media, although the staff seem genuinely aggrieved by it. Either way I doubt John Lewis will be picking up awards for tact and diplomacy or reading the room any time soon.

In more positive news, Toymaster released its Christmas catalogue this week – along with Smyths, The Entertainer and other specialist toy retailers, I really believe that Argos has handed a great opportunity to its toy retail competitors when it ceased publication of its catalogue. I am not saying it was the wrong decision for Sainsbury’s or Argos per se – that is very much up for debate. But I remain convinced that kids love a physical catalogue, so they can go through and circle what they want – even in the digital era, that’s still a big part of the build-up to Christmas for them (this Blog was written before we received the Smyths press release, which makes precisely this point – great minds think alike). And if the launch of those catalogues comes at a time when parents have the ‘buy early’ mantra at the back of their mind, so much the better.

Looking ahead to January, it’s marvellous news that the London Toy Fair has finally given exhibitors the green light to start working on their stands, while the ’22 show is already close to selling out. Having visited two shows in the past few weeks, it really does feel as though trade shows are very much back in business. We still have winter to navigate, but it does seem that there is every reason to believe that a successful event can take place in London in January. It is also good that the BTHA has put to bed the rumours about the redevelopment work going on at Olympia disrupting or even forcing the cancellation of the Toy Fair. Thankfully, those murmurs turned out to be more ‘some bloke says’ nonsense (using the polite word there, so the Blog doesn’t get blocked by over-sensitive spam filters).

International travel restrictions also appear to be easing – there has been potentially encouraging news this week around US travel, while UK inbound restrictions have also been relaxed significantly. Unfortunately, I am told that some European media outlets appear reluctant to make a big song and dance about that (I wonder what we might have done to upset our friends in the EU…?), so for people in the European toy and licensing communities mulling over whether to visit BLE this November, it is probably worth looking at the new rules.

Sadly, the same doesn’t appear to be true for Hong Kong – word has just reached me that the organisers of the Hong Kong Toys & Games Fair have announced a new online /offline event in December, which will incorporate toys. In their own words, “with various health control measures and global travel restrictions still in place, we foresee overseas exhibitors and buyers may have difficulty coming to join our Toys & Games Fair in January.” Unfortunately, I think we can all see where this leaves us.

Post-pandemic, it can sometimes be difficult to look beyond one’s own bubble and experiences. Here at Toy World Towers, we have been back in our office for almost six months now. Since the summer holidays came to an end, the roads are certainly getting far busier again: the natural assumption is that many more people are now returning to offices. I am more inclined to trust the evidence of my own eyes than a few very vocal people on LinkedIn about how things may play out. But either way, if larger companies and retailers return to their offices, it will make their participation in trade shows and face-to-face meetings more likely. On that note, and knowing how popular last week’s video was, here is another amusing vignette that I hope will raise a smile: