Every time I write about attending a trade show here in the UK, I receive comments from toy people around the world (especially the Far East), envious about the fact that we are able to meet up at physical events. All I can say is that hopefully, other countries will soon be able to follow our lead and return to being able to get together in person.
This week saw the newly rebranded INDX show (the ‘AIS show’ in old money) take place in Solihull. Following the overwhelming success of the London Toy Fair back in January, this was another important step on the road back to normality – a host of suppliers coupled with a good mix of AIS members and other specialist retailers (bricks and mortar and online). The Toymaster team was out in force on the day the Toy World team visited the show – and the AIS team is planning to reciprocate by vising Toymaster’s Harrogate event next month.
I think this is a good thing. Toymaster and AIS are buying groups with similar aims – to support their members and help them to trade effectively and profitably – and whatever some may believe, they are not really in competition. There is far more that unites them than divides them, and not only do they have common goals, but also common competition – principally, online platforms and perhaps to a lesser extent, grocers and value retailers (although I would question whether the latter two channels should be classified as direct competitors per se). So, it is encouraging to see the pair of buying groups being mutually supportive – and good to see physical shows being supported by the toy community.
As you would expect, there was much talk about trading in the first quarter, and prospects for the months ahead. Companies are being impacted by the current fiscal and retail conditions in different ways – some have beaten their Q1 targets, others fell short. Some are sitting on sizeable quantities of stock, others are watching the situation in China very closely – as the recent shutdown of Shanghai showed, the Chinese government is not averse to making grand gestures in a bid to contain Covid, and further supply chain glitches or price increases can’t be ruled out. Prices are rising elsewhere across the chain too, and there are some delicate balancing acts going on behind the scenes to make the numbers work for all parties.
Toy World saw it ourselves at first hand, when our printer recently told us that its fixed rate energy deal had ended, and it was staring down the barrel of an increase in its energy bill from £675,000 to £1,900,000 this year. And they have to renegotiate terms in July for the rest of the year – guess what, they are not expecting those negotiations to be pleasant. Trust me, you would not want to be a struggling magazine at the moment. We’ve got to work with them to find solutions – it’s not in their interest to have no magazines to print, just as it is not in our interest not to have a printer to print the fantastic issues we have lined up (all I can say is that our amazing April issue, which so many of you have complimented us on, was not a one-off by any means…).
However, we’re all reasonable people and I am confident we can find a way to make this work. I am equally sure that suppliers and retailers are having similar conversations right now – although I was slightly surprised to hear from a couple of suppliers at the INDX show that some retailers’ terms are just too onerous to sign up to. And it’s not even necessarily the ones you might think – interestingly, while it is generally accepted that it’s an ongoing challenge for bricks and mortar retailers to compete in an increasingly digital world, and that the business rates system arguably tilts the playing field in favour of digital players, it was online retailers’ terms being singled out by suppliers as being the toughest to agree to. Irony may have just died…
I get that we all have to fight to make our own businesses viable – but surely not at the expense of our client’s businesses? It was perhaps not a shock that a certain major online platform was one of the accounts singled out for having terms that were just too rich for some people’s blood – the platform’s intransigence was evident last year, when refusing to accept price increases from many suppliers who were trying to balance the books as a result of massive cost hikes across the supply chain. I have seen an email which offers hope that the platform in question may be more open to accepting price increases this year, but as ever, the proof will be in the pudding – what will they deem an acceptable rise? And will they try to give with one hand and take away with the other, a trick ‘perfected’ by the Chancellor in his recent budget. And, as ever, negotiating not with a real person, but a chatbot (or perhaps just an algorithm), brings its own challenges.
But they’re not the only ones – while I was surprised to hear how long it takes to open an account with some of the grocers these days (six to nine months apparently being quite commonplace), I was even more surprised to hear of a returning entrant to the market seemingly basing its terms on its glory days. Bold and brave? Confident? Or…
Ultimately, we all have to balance what’s right for our business with what is going to help us develop long-term partnerships with customers. While there has understandably been a swing towards short-term reactive behaviour over the pandemic, as we emerge into the post-pandemic landscape, I think it will be important to start looking at planning for the longer term again. We are definitely seeing that with the toy fairs – the timing changes to the New York event have been announced eighteen months ahead of schedule, to give everyone the opportunity to prepare. Likewise, other toy and licensing shows have their timelines effectively laid down for the next three or four years.
In our own backyard, we have already sold ads for this time next year, while waiting lists for certain slots have been building up for 2023 for some time. There will be changes in the media landscape over the next year for certain – but it is good to know that whatever happens, you will be able to rely on Toy World as a constant in an ever-changing world. And right now, we all crave a little certainty in our lives.